The oldest of the Baby Boomers -- that 78 million person "bump" in our population -- turns 65 in 2011, and for the next 18 years that bump will be grinding through some of our most important systems of survival for the elderly. We're talking about Medicare, Medicaid and Social Security -- the three pillars of senior living support.
The key question on most boomer's minds is can the system handle it, or will this be the generation that breaks the foundation on which so many Americans are depending on?
Demand for benefits
Boomers started burning through Social Security three years ago when the first ones turned 62 and became eligible for benefits. And now they're going to be eligible for Medicare. Some may have even signed up already because you're supposed to sign up for medicare three months before the month you turn 65.
Coverage typically begins on the first day of your birth month. If your birthday is on the first day of the month, your coverage will start the first day of the prior month. Individuals who wait until their birth month or later to turn in the paperwork may experience coverage delays.
Baby boomers turning 65 next year should sign up right away to avoid a 10 percent Part B premium increase for each 12-month period they could have had Part B, but didn't sign up for it. Those who delay Medicare enrollment because they're still working and covered by a group health insurance plan must sign up within eight months after their coverage ends to avoid the penalty.
Many boomers are looking forward to joining Medicare this year, especially if they're paying a lot for their own health insurance. More than 6,000 Medicare beneficiaries with the birth date January 1, 1946, have already pre-enrolled in Medicare, so that their coverage will go into effect on the first day of 2011.
Some are even postponing serious or expensive medical procedures until they qualify for Medicare so that it's covered.
As for Social Security, even though the oldest baby boomers already qualify for partial benefits, they are still a year away from qualifying for the full amount. For 1946-born boomers, that's age 66. Those who have already signed up for Social Security, or plan to this year, will receive reduced payouts for the rest of their lives.
Many baby boomers plan to delay their Social Security as long as possible to lock in higher payments later on in retirement. Some even plan on waiting until they're 70 because they'll receive even more.
According to insurance actuarial tables, most of us will live another 20 years or so. So that means you have plenty of time to enjoy the perks that come with being a senior citizen. Turning 65 means you receive a number of breaks beyond being able to get Medicare.
Some will receive a break on property taxes, and discounted airline and movie tickets. You may not even be aware of it, but when you turn 65 you can get free hunting and fishing licenses along with reduced fees at state parks. You can even ride the bus and subway for less.
Medicare is still by and far the best deal of all and will mean thousands in savings related to medical and healthcare expenses.
And the two perks with the most impact for seniors are government programs relating to property taxes and health insurance.
The Sunshine State
Since 2002, many Florida property owners 65 and older who earn less than $25,480 have gotten property tax breaks with increased homestead exemptions above the standard $25,000. And you thought it was just the weather that attracted the seniors to Florida.
Florida has long been one of the centers for senior citizen discounts. The state has the largest proportion of senior citizens in the nation. An estimated 2.8 million Floridians are older than 65, representing 17.6 percent of the state's population.
If there were a Mecca for seniors, it would be Charlotte County in southern Florida. By percentage, has more people 65 and older than any other county in the country. Four of the top nine metropolitan areas in the country for seniors stretch from Bradenton to Naples. Senior discounts are everywhere.
What has most state and municipal governments concerned is will this huge influx of people break these systems that were designed to make senior living easier.
Trouble in Texas
Texas Governor Rick Perry (R) recently threatened to pull out of Medicaid because the state couldn't afford it anymore. Across the country, state budgets continue to be strapped. Federal stimulus dollars are running out. And the latest federal tax and stimulus package will not provide much relief at the state and local levels. Meanwhile, looming provisions of health reform will add a projected 16 million to the Medicaid rolls. Where are the facilities to take care of these folks? Where is the money?
Most eyes are on the federal government's massive budget deficits. Safety net programs would be affected by deficit reduction proposals that have been introduced to generally favorable receptions. Politicians on both sides of the aisle agree that Social Security, Medicare, and Medicaid have to be reined in for meaningful deficit reduction to occur.
The battle over these programs has already begun and will intensify when the new Republican majority takes office next year in the U.S. House of Representatives.
Even as the lines are drawn for the federal deficit-reduction war, the states have become a battleground for resources to fund Medicaid. States share the funding for Medicaid services with Washington and have been increasingly hard-pressed to come up with their portion of Medicaid funding.
Meanwhile, demand for services continues to rise. That's particularly the case for seniors, who face a second straight year with no cost-of-living increases in Social Security. The poverty level of people aged 65 and older compares favorably with other age groups in the United States. That's almost entirely due to Social Security payments, which are large enough to keep most seniors above the poverty line. However, millions of older Americans live on incomes that are very near the poverty level.
Mandated increases in federal benefits under the health reform law are not the only source of financial pressures on safety nets. Baby boomers begin turning 65 next year at the rate of an estimated 7,500 people a day, taxing a Medicaid program that already is hurtling toward insolvency.
While federal support for Medicare is being reduced in the Medicare Advantage program, health reform will require that many preventive office visits and tests, including an annual physical, must be provided at no charge to Medicare participants. Federal support to pay for prescription drugs is also being increased for seniors with large drug bills.
As the song goes, "Something's Got To Give.â€
The first of what will eventually be 78 million baby boomers begins to move through Medicare, and Medicaid in 2011, can the system handle them?...