The mess that is long-term care funding
In some ways, my parents did their children a great favor by dying early.
Don't get me wrong. There's not a day that goes by when I don't miss them. But as I watch more friends and relatives struggle to ensure adequate care for aging parents, it's hard not to feel a twinge of a guilty relief.
For unless you happen to be one of those uber rich people Forbes magazine likes to dote on, paying for long-term care is no small consideration. A private skilled bed now costs more than $87,000 a year to rent, on average. It takes a mighty robust checkbook to keep absorbing that kind of punishment, year after year.
As for my naïve chums hoping that public dollars will help, boy are they in for a rude awakening. Like most people, they have a weak-at-best grasp of how public policy wonks and lawmakers have constructed Medicare and Medicaid assistance. Suffice to say, it's a system that would greatly impress the most creative minds of the Byzantine Empire.
As for private insurance? Well, it's a fine product — in concept. The reality is that most insurers have not walked away from selling policies, they've run. Not that you could blame them. Predicting the future care needs of millions of people — and figuring out how to pay for such service — is a bit like trying to draw a sunrise with an Etch-A-Sketch.
When it comes to paying for long-term care, what we really have is a math problem. People need skilled care for themselves or loved ones. Yet they generally can't afford the sticker price. That leaves two basic choices: Either get more assistance from public sources or save more money.
Based on what we know about the spending habits of most people and the future fiscal outlook of Medicare and Medicaid, anyone care to bet on either of those options solving the crisis? Didn't think so.
Actually, there is a third option: lower-cost care. Seems obvious, right?
Yet many skilled operators act as if they never heard of it. In fact, many have done everything humanly possible to thwart the invasion or existence of alternatives.
That strategy has its merits. But it is based on the assumption that skilled care operators can continue to hold more sway with lawmakers and regulators than other stakeholders. Not sure what the shelf life is on that approach, but it probably can't last forever.
So it's not much of a surprise that many of today's skilled care operators find themselves at a fork in the proverbial road. One option going forward is to compete against hospitals. The other is to make a go against non-institutional senior living options.
Neither choice is a slam dunk. But they both make more sense than a third option, which is to do nothing and hope for the best. But the last choice is not really much of an option.
Actually, it's more of a suicide note.
John O'Connor is McKnight's Editorial Director.