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Senior Citizens Reality: 1 in 4 File Bankruptcy

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Motivational Quote Graphic 1705It’s difficult to even fathom, but a report released by the Journal of General Internal Medicine shows that 25 percent of senior citizens file for bankruptcy each year. The reason? Overwhelming out of pocket medical costs. The soaring costs are keeping many away from much needed medical attention, which is the true tragedy.

The study shows that out of pocket expenses in the final five years of life totaled $39,000 for individuals and $51,000 for couples where one spouse dies. A staggering “25 percent of subjects’ expenditures exceeded baseline total household assets, and 43 percent of subjects’ spending surpassed their non-housing assets,” according to the report.

Senior Citizen Expenses

This certainly puts into context the overwhelming expenses associated with cancer, Alzheimer’s and other diseases can create, despite Medicaid and/or Medicare coverage. They can send healthcare costs soaring. In fact, the study used the words “unsustainable rates”. Another interesting dynamic: it’s those diseases with no cures that account for the lion’s share of those unsustainable rates. About 10 percent of the population has a terminal illness and 70 percent of all health care expenses are due to those terminal illnesses.

Meanwhile, in another report, the costs of living in private nursing homes and assisted living facilities have increased 24 percent since 2008. The median annual cost of private nursing home care is now $83,950. To provide contrast, that figure equates to nearly three times the tuition at a not for profit college (the other Achilles heel for the economy).

For those in nursing homes and in semi private rooms, the costs average $75,405 every year. For those in assisted living facilities, they say their costs increase to around $41,000.

Already, half of all Americans report they have either already delayed their retirement or they intend to do so in the coming years. Many are hoping the delay will help them benefit from a social security stand point.

Uncertainties and New Healthcare Laws

To be sure, these numbers provide an overwhelming truth for millions. Further complicating matters, at least in the short term, is the uncertainty surrounding the new healthcare laws. In recent days, Obamacare, as it’s often referred to, has taken one hit after another. From an inability to sign up on the government website to vulnerabilities and potential for identity theft for those who do manage to sign up to the fears that too many physicians are leaving the healthcare field, there are a number of stumbling blocks that only increase worry.

All of this less than pleasant news has prompted many to look into their options of protecting their assets while seeking out the best solutions. They are concerned about the 5 year look back period that comes when they enroll in Medicaid as their coverage can be delayed if it’s found they’ve given away assets. The penalties can affect one’s ability to enter into a nursing home, too, if there exists no way to pay out of pocket. It’s a serious problem for those who find themselves with no other options.

While all of this is worrisome, your elder care attorney can help you plot your next step and prepare for the future. It’s important that your estate plan is current, including your will, any medical directives and trusts you have set up. It can also help you feel a bit more empowered, even when it feels like the entire medical sector falls woefully short.

Stephen Unsworth
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