As Baby Boomers enter retirement a “Silver Tsunami” is expected to impact the Social Security, Medicare and Medicaid systems of our nation.
In this post I want to try to explain some of the preparation that our government has made to ensure the continuation of these popular programs.
Social Security, in many ways, has gotten the most attention of all of the entitlement programs. During the Bush administration, the qualification age was slowly raised.
When I started in insurance I was able to assume that all Americans would be eligible for their full Social Security payments when they were 65. That is no longer an accurate assumption.
According to the Social Security web page, you can still take PARTIAL Social Security at age 62 but in order to get your maximum Social Security retirement benefit you will have to delay enrolling in Social Security according to the chart below.
Historically, Medicare has been a political hot potato. Both political parties have different ideas about how the popular government program should look.
One thing that in which Republicans and Democrats agree is that the Medicare Trust Fund will go bankrupt unless changes are made. The fact is that as the Baby Boom generation becomes eligible for Medicare and congress continues to increase the amount they pay doctors and hospitals, more money is paid out in claims than is taken in by Medicare taxes.
Everyone knows that changes must be made. They are just not in agreement about what to change in D.C. The result is that nothing is happening and as the “Silver Tsunami” approaches Medicare gets strained even more.
There is bi-partisan talk about combining Medicare A with Medicare B, placing a “maximum out-of-pocket” limit on Medicare B and curtailing Medigap. However, those are just rumors and speculation. Nothing will happen to Medicare until after both houses of congress agree to a plan and it is acceptable to the president.
The bottom line is that, although there are talks going on behind closed doors in D.C. about Medicare, I do not expect big changes to the program for a few years.
With the political hole that Mr. Obama has dug for himself with Obamacare, it would surprise me if there were any more major changes to Medicare made until the next president takes office. (I could be wrong but it only makes since that Obamacare is fully implemented before he attempts to over-haul Medicare. With all the delays and other problems he is having with Obamacare, I cannot see any wisdom behind him starting another controversial project, but I have been wrong before.)
Contrary to popular belief, the biggest source of health care bills for seniors is not from doctors or hospitals. It is for the additional expenses incurred while they recover from their medical treatment.
Medicare will help pay the bills for skilled nursing but will not help with any bills for unskilled help. If you want government help with those expenses, you will have to “spend down” your life’s savings until you can qualify for Medicaid in your state.
Below are a couple of examples. I hope they help you understand the difference.
- If you must go into a nursing home, Medicare will pay your doctor’s bills when he comes to see you. However, you will need to qualify for Medicaid to get your room and board charges paid.
- If you “age in place,” the term used for people who are able to stay at home, Medicare will pay for a nurse to periodically come by and check on your health. If you need “medical care,” Medicare will pay toward that as well. However, if you need other help to stay at home, such as help moving from one room to another, using the bathroom, etc, you must rely on friends, family or Medicaid if you do not have the money required to hire a professional aide.