Medicaid: An Important Conversation

I expect that you have an opinion about the health-care debates going on in Washington – even if your opinion is that you don’t care anymore!

But, one aspect of the debate that you may want to pay more attention to, is the fate and funding of Medicaid. Why? Because you or a loved one may – I dare say are likely – to need Medicaid yourself someday.

“Not me,” you say! “I earn a fine living, I’ve set aside for my retirement and I’m in good health,” you say.

“Join the club,” I say, and I add: “You are very likely to turn to Medicaid for a nursing home stay in the future.”

It is a fact that most Americans have not saved enough money to pay for decades of post-retirement living expenses and years of expensive end-of-life care. It’s also true, that one in three people who turn 65 end up in a nursing home at some point and for some period of time. And, among the people living in a nursing home today, according to Kaiser Family Foundation, 62 percent cannot pay their bill on their own. When that happens, they turn to Medicaid.

The reason is, nursing homes are expensive. The average annual cost is $82,128 for a semiprivate room, according to Genworth, which sells insurance that can help pay those bills. So even if you have done everything right, that type of bill is staggering for most. It is even more daunting if you have been retired for 10 – 20 years. And, it’s even more shocking if you or your spouse have already spent some time in a nursing home and depleted some of the money you set aside for medical expenses.

Suddenly, you are more vulnerable.

To get into the weeds for a moment, you must understand how Medicaid works. The federal government disburses funds to each state and then lets each state allocate the funds among those who qualify. Additionally, the federal government mandates that Medicaid pay for nursing home care.

Reductions in Medicaid funding are likely to mean reductions in funding for the skilled nursing/long-term care you may need, as well as less money for children and adults who are poor or have disabilities.

So, while you may not need insurance through the Affordable Care Act, and you may be well-prepared for retirement, I encourage you to keep your eye on the Medicaid conversations. Medicaid may need more funding, it may need less; it may be that federal mandates should be dropped, or they should be more rigid. There may be other ‘solutions’ to our current situation, but don’t tune out the Medicaid conversation thinking it does not affect you because, in reality, it probably will affect you or someone you love.