The Crisis in Long-Term Care Funding: Understanding Private Pay Alternatives

By Chris Orestis

Statistics show that the majority of people do not understand the various forms of long-term care (LTC), the different means to pay for it, and most do not plan for it. Adding to the growing funding crisis are the baby boomers who are now reaching Social Security and Medicare age—and 70 percent of them will need long-term care services. Over ten million Americans now require long-term care annually, and Medicaid is the primary source of coverage. With these numbers increasing every year, the United States has officially crossed the tipping point into the era of the “long-term care funding crisis.”

Diminished financial resources across the board have brought together a perfect storm of factors we must now confront. The simple fact is that more responsibility is going to be placed back on individuals and their families to find the resources necessary to handle the costs of long-term care. Understanding the growing array of alternative private pay solutions is a
critical part of LTC planning for advisors and providers.

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