You've worked hard, saved what you can, and you think you're pretty well set for retirement. However, as recent stock market fluctuations make clear, a lot can happen to derail your good planning.
For example, you might end up needing more long-term care than you expected. If that happens, the good news is that there's already a safety net out there for you and your family.
It's called Medicaid and it's the state and federally funded health insurance program that serves millions of seniors, children, and people with disabilities. In fact, more than one in six Americans older than 65 rely on it.
Unfortunately, there is a big misperception among many people that Medicare pays for nursing homes or home care, but that's simply not the case for most people. Medicare only pays for long-term care in very limited circumstances. In most cases, you'll have to pay yourself unless you have a long-term care insurance policy.
Even if you have that kind of insurance, many policies only cover costs for a limited time or for certain services. With nursing homes averaging over $70,000 a year and home health aides costing $19 an hour, you may soon find that you've used up most of your life savings.
Luckily, the Medicaid safety net can help you get the care you need. More than 60 percent of nursing home residents rely on Medicaid, but Medicaid isn't just about nursing home care. Medicaid also pays for services that help people stay in their homes longer, such as home health aides or transportation to doctors' appointments.
Medicaid pays for some home care in every state, but the coverage of specific services varies.
Medicaid doesn't just help you, it also helps your family. If you're married, Medicaid includes financial protections for your spouse. That means that if you're in a nursing home, your spouse can keep some money without affecting your Medicaid eligibility.
Thanks to health care reform, after 2014 that same financial protection will apply if you need home care, so the cost of your care won't impoverish your spouse.
Furthermore, because Medicaid covers the cost of your long-term care, your family won't have to. Your children can keep saving for your grandchildren's education and for their own retirement.
By providing care at home, Medicaid gives your family members more time for their jobs and families, lessening the stress for everyone.
Millions of seniors and their families rely on Medicaid. Unfortunately, severe program cutbacks are a real possibility, especially in light of the ongoing deficit debate.
The U.S. House of Representatives already passed a proposal to make drastic cuts to the Medicaid safety net. Although this legislation did not pass the senate, the threats continue.
The latest debt compromise includes the formation of a 12-member "super committee," and in order to meet their Thanksgiving Day deadline for a plan to reduce the deficit by $1.5 trillion, Medicaid will likely face the chopping block.
Medicaid cuts would inevitably mean less help for seniors who need long-term care.
There's a better way to tackle our deficit than placing the burden on aging Americans and their families. That's by getting rid of tax cuts for the wealthy and closing tax loopholes for corporations-in short, taking a balanced approach to deficit reduction that makes everyone pay a fair share.
Dismantling Medicaid and leaving seniors on their own to pay for long-term care would be the wrong way to go.
We need to make sure that the Medicaid safety net is there to help you and your family with the high costs of long-term care.
Pollack is executive director of Families USA.