This article originally appeared in the June 2015 issue of the TaxStringer. It is reprinted with permission from the New York State Society of Certified Public Accountants.
Benjamin Franklin is famously quoted for saying, “In this world nothing can be said to be certain, except death and taxes.” Now, baby boomers can add a third certainty to that list: the extraordinary cost of long-term care. Although $10,000 seems like a lot of money, that amount will only buy about one month of Medicaid nursing home care or one month of private home care services in New York today; thus, a taxpayer who needs long-term care but doesn’t have an extremely generous long-term care insurance plan will be hard-pressed to survive in New York.
In general, baby boomers (those born in the United States between 1946 and 1964) will find long-term care services unaffordable. It is projected that between 2010 and 2030, the population over age 80 will increase by 79%, and of these individuals, the majority can expect that long-term care services will absorb up to 84% of their discretionary spending. Only a small fraction of the population has coverage for long-term care services through insurance—and even those who do might find the benefits insufficient.
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