There is a lot of talk and debate nowadays inside the Beltway on whether America is becoming more “red” or “blue.” While that may be an issue for the punditry to argue, it is undeniable that our country is becoming more “gray.” Most Americans have some experience with nursing homes or other long term care settings, and nearly half have had a family member or close friend in a home in the past three years. But even with this close familiarity to long term care, only a small minority of Americans are saving or preparing for this likely, future financial challenge. According to the Kaiser Family Foundation, nearly a third of all Americans have not thought about ways to pay for long term care and fifty percent say that planning to pay for it is too costly.

The disconnect between recognizing the need to plan for long term care and saving for it, is in part due to perceptions of the current system. It is a fact that long term care is expensive. The average cost of an annual stay in a long term care facility is around $70,000. It is nearly impossible for most families to pay this amount of money, and if a loved-one’s stay in a nursing home is in-line with the average three years, nursing home care can become extremely expensive. And because only a small minority of Americans have planned for this expense, the cost of this care usually falls on taxpayers who subsidize long term care through Medicaid to the tune of billions of dollars a year.

In a system where the cost of care is hidden by taxes levied on your income, property, and business activities, it is no wonder why so many Americans rely on Medicaid to pay their long term care. The cost is not immediately discernable to the beneficiary, but it is beginning to take an increasing toll on state Medicaid programs and crowding out other priorities like education as primary financial commitments. This trend is unsustainable over time. By 2040, the number of seniors in this country will have doubled, and a large portion of those individuals will have to rely on some type of long term care.

It is important that incentives are put into place today that will deal with this influx of elderly Americans who will rely on the long term care health system in the future. To address this, I have introduced H.R. 3511, The Medicaid State Long term Care Partnership Act of 2005. H.R. 3511 would extend the very popular Long term Care Partnership Program, currently available to only four states, to all fifty states.

The benefits of partnership policies are two-fold: the program will provide incentives for individuals to purchase long term care insurance and relieve pressure on state Medicaid programs where long term care expenses are growing exponentially. And if the purchasers of these policies spend down their policy and need to rely on Medicaid, they will be able to protect assets on a dollar-for-dollar basis. This arrangement helps protect beneficiaries’ important asset and relieve pressure on publicly financed long term care.

The fact remains that most of us are anesthetized to the true cost and true value of long term care insurance. Those of us who can should consider the purchase of long term care insurance as the socially responsible thing to do. Providing this additional incentive to the purchase of long term care coverage may allow some of the burden to be shifted from the government to the private sector. This, while allowing great flexibility in coverage options, provides a win-win solution to what otherwise is a looming financial catastrophe.