Middle-Income Seniors Will Find It Hard to Pay for Housing by 2033

Myriad health, financial and social reasons could mean that more than 11 million middle-income seniors aged 75 and older may not be able to pay for assisted living, according to a recent study by NORC.

The study of these “Forgotten Middle” funded by The SCAN Foundation at the University of Chicago, said this could occur by 2033 as well as are also unlikely to qualify for Medicaid to pay for their long-term care needs.

The study estimated that 7.9 such seniors will be seeking care by 2033 – and will comprise a more racially and ethnically diverse group.

Seniors Lacking Assets

Other key findings show that future seniors are less likely to be married, and many do not have children living nearby; the majority will have three or more chronic conditions and mobility limitations and one in three will face cognitive impairments.

In 2033, about three-quarters will have less than $65,000 in income and annuitized assets and would be unable to meet annual costs.

Dr. Sarita A. Mohanty, president and CEO of The SCAN Foundation, said in a prepared statement that homeowners may be forced to sell their homes “and even then, many will not be able to afford their needs.”

Policymakers Can Play a Role

David Schless, president & CEO of the American Seniors Housing Association, tells GlobeSt.com, “With the rapid growth of the population aged 80+, there are significant challenges associated with caring for those who do not qualify for Medicaid, and who lack sufficient resources to pay for market-rate assisted living.

“While there are, unfortunately, no easy solutions to this problem, it is hoped that policymakers will create new programs to assist those middle-income seniors with supportive care needs.”

A Closer Look at Medicaid

Mark Ustin, regulatory and government relations lawyer at Farrell Fritz in Albany, NY., tells GlobeSt.com, “This study shines an important light on the challenges faced by middle-income seniors seeking to access assisted living services. It is true that most assisted living providers have focused on the higher-income private pay market, and that lower-income seniors can have access to Medicaid-funded alternatives.

“However, the Medicaid side of the equation is not always so clear – because Medicaid benefits vary by state, very often even lower-income seniors do not have access to assisted living services because their state has either refused to cover them or has offered reimbursement rates or coverage limits so low that development of Medicaid-funded alternatives is effectively discouraged.

“And of course, Medicaid eligibility also varies by state – so that a person in need of assisted living may not qualify for Medicaid in one state, but may qualify in a state with more generous eligibility rules that effectively provide Medicaid coverage for much of the middle class.”

He said to ensure that middle- and lower-income seniors have fair access to assisted living, it is important for states to provide Medicaid eligibility rules and reimbursement amounts that are sufficient to incentivize providers to develop more of such services.

Peter DeMangus, chief marketing officer, Solterra Companies, tells GlobeSt.com that senior living developers need to become “extremely creative” when it comes to designing, building and financing new senior residential projects.