Medicare and Medicaid have been in the news for several years as a debate rages in the Federal government about a possible budget shortfall in the programs and how to fund them. Here are nine things you might not know about Medicaid and your chances of needing it in the future.
1. You Have a High Percentage Chance of Winding Up on Medicaid
About 70% of people who turn age 65 will need some type of long-term care in their lifetime, according to the U.S. Department of Health and Human Services.
However, very few of us are ready to pay for that care. In fact, a full 64% of all nursing home residents are covered by Medicaid.
2. Long-Term Care is Even More Expensive than You Think
Genworth found that Americans underestimate the cost of long-term care by a full 50%.
Costs vary dramatically nationwide, but Genworth’s study estimates the medical annual costs of long-term care, as of 2019, to be:
- $102,200 for a nursing home (private room)
- $90,155 for a nursing room (semi-private room)
- $51,480 for homemaker services
- $52,624 for an in home health aide
- $48,612 for assisted living
- $19,500 for adult day care
3. Even Well Prepared Retirees End Up on Medicaid
Long-term care costs are so high that it is common for retirees who have hundreds of thousands in retirement savings to spend everything they have left on healthcare and still need Medicaid in the years before they die.
The total costs incurred by an individual will vary depending on the length of time long-term care is required.
According to the Center on Budget and Policy Priorities, the bulk of entitlement program spending goes to the middle class. These are not programs that are for the poor. Fifty eight percent of all entitlement spending (Social Security, Medicare, and Medicaid) goes to payments to the middle 60% of the U.S. population.