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Research Affirms Fears for the “Forgotten Middle” of the Senior Market

Susan Donley April 25, 2019

Policymakers, private industry and researchers have long overlooked a critical part of the longevity market. Now a group of leaders in the field is calling for a dialogue about how to provide care and housing to middle-income seniors.

The National Investment Center for Seniors & Housing Care (NIC), the SCAN Foundation, the John A. Hartford Foundation, AARP and the AARP Foundation together funded a NORC study that look into an issue that not enough of the field is paying attention to: the “forgotten middle.” Health Affairs presents the findings as part of a series on housing and healthcare published this week.

The premise of this work is that financial status dictates where people live and how they access long-term care. Lower income individuals have access to Medicaid and low-income housing. High-income families can afford private care and housing to fit their needs. But the middle-income cohort is left with few options. They cobble together care with support from family caregivers and often are unlikely to qualify for Medicaid benefits.

This gap in options for middle market seniors is only going to grow as more and more Boomers need care and the caregiver pool dwindles. According to the research by 2029, 81% of middle-income seniors won’t have resources to cover the cost of assisted living rent and out-of-pocket health care costs.

Who Are Middle Income Seniors?

We can expect a massive increase in the number of middle-income seniors over the next decade. According to the research, the cohort will have doubled to 14.4 million by 2029.

The seniors will be more diverse and more female than ever. They will also be more educated, which means they’re likely to have somewhat more financial resources. At the same time, the research anticipates lower rates of marriage, which means less likelihood of having a partner to provide care.

When looking at potential care needs of middle-income seniors, the research found that two-thirds will have three or more chronic conditions and a projected 60% will have mobility issues. What’s more, 20% will be high need—the most likely to need additional supports—but most (54%) will not be able to afford senior housing.

That’s a tight financial spot for millions of Americans—put in even starker relief when considered along with the startlingly low rates of savings in our country.

In a perspective story published as part of the Health Affairs series, Columbia University’s Jack Rowe cites findings from The Research Network on an Aging Society that predict a 55-year-old woman with an annual income of $65,000 and no savings must begin saving 18.5% percent of her income each year to have a 50% chance of not outliving his assets.

Coming Together to Provide Housing Solutions

Senior housing—including assisted living and independent living communities—has potential to help seniors of all income levels get the care they need. Under the right circumstances, housing providers can help breakdown silos in the care service system by addressing a range of needs in a single setting. When it comes to middle-income adults, there’s a growing need for housing options.

As with most issues facing older people, there is no single solution to provide affordable access to housing that works older adults. David Grabowski, report co-author and professor at Harvard Medical School, says public and private solutions will be required.

Government could provide a support through a range of well-known solutions, including increasing access to affordable housing through tax credits and vouchers, expanding Medicare Advantage plans and broadening Medicaid eligibility.

Senior housing providers can also play a role in serving the needs of middle-income seniors, but success in this sector will require innovation—and possibly new players in the field. As the report on states: “Although some seniors housing operators are experimenting with options today, they are not widespread. One way to stimulate such private sector innovation could be to offer tax incentives for developers and operators of seniors housing to serve middle-income seniors. As the opportunity to serve this growing cohort becomes more recognized, we expect creative entrepreneurs to pursue other yet-to-be-imagined solutions.”

Supporting Middle Income Seniors at Home

Even with new policy and products around senior housing, most older people will not move into a care facility—because of affordability, severity of need, personal preference or just plain inertia.

The new study estimates that 80% of older middle-income adults will fall outside the high-needs group and are likely to age in place. As a result, the number of over 77-year-old households is projected to double to 28 million by 2038. Those middle-income seniors are least likely to live in dense urban areas—so they will have less access to transportation, services and opportunities for socialization. Many will also face housing affordability problems, carrying a mortgage that cuts into costs after retirement.

So how do we support middle-income seniors who stay at home? The report’s authors refer to a panoply of solutions the longevity market has in its arsenal: tax credits to fund home modifications, incentives for building age-friendly housing, the Village movement, PACE programs, caregivers supports, etc.

Now what?

These concepts are not entirely new to professionals who have been working in the field of aging. This new research begs the question: now what?

At a briefing in Washington D.C., on Wednesday, Health Affairs presented several panels to share the new findings and talk about next steps. Speakers and audience members brought up many of core questions at play in the crises of care—and this work provides a new way to frame how the field thinks about answers. For example:

Nancy Eldridge, CEO of the National Well Home Network, urged the field not to attempt creating new systems and programs specifically for the middle-income cohort. Instead she advocates more collaboration and services that work for a broad set of older people.

Jennifer Molinsky of Harvard University suggested that when it comes to solutions “a lot of this is local.” She recommends having someone in local government tasked with thinking about aging to assure that all decisions reflect the needs of older residents.

AARP’s Chief Public Policy Officer Deb Whitman reinforced the critical importance of supporting caregivers, and the advantages of local age-friendly communities.

Bob Kramer, the founder and strategic advisor of NIC, reminded us that “no one wants to be thought of as the sum of their health, long-term care and housing needs.” In the end, older people at all income level care most about their quality of life.

Ultimately though, we’re left without any comprehensive answer on how we address the growing needs of middle-income seniors when it comes to care and housing. As NORC’s Caroline Pearson noted, “Designing the big long-term care policy program is going to be hard.” For now it seems the field is looking to incremental progress across the care and housing sectors as next steps.

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Susan Donley

Susan Donley is Publisher and CEO of Stria. She is dedicated to improving the lives of older people through powerful media and communications. Previously Susan served as Publisher and Managing Director of PBS's Next Avenue.

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