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Health Affairs launches “The Forgotten Middle”

As Alan Weil, Health Affairs Editor-in-chief stated, “This is a pretty scary reality that’s coming towards us.” It was an appropriate sentiment, as the nation’s leading peer-reviewed health policy journal released a groundbreaking new study, commissioned and funded by NIC, and shared with the world its unsettling findings. Addressing a room full of media and policy makers, as well as hundreds of viewers on a live webcast, Weil introduced the study, titled “The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care,” and added that, “this is a topic that’s easy to set aside for other priorities, but hopefully it will yield additional discussions.” 

NIC founder and Strategic Advisor, Bob Kramer, in his opening remarks, emphasized that the study is a starting point for a discussion that the nation’s policy makers and industry leaders need to engage in. “This research just scratches the surface, lifting the curtain. To continue to ignore this is at the nation’s peril, seniors’ peril, and particularly at the peril of poorer elders,” he said.  

Study authors David Grabowski, Professor of Health Care Policy, Department of Health Care Policy, Harvard Medical School, and Caroline Pearson, Senior Vice President, Health Care, of NORC at the University of Chicago, presented the study’s methodology and key findings. Echoing Kramer, Grabowski introduced the study by saying, “Today is about beginning a dialogue and hopefully an agenda about targeting care and housing to this population.”  

In her presentation, Pearson walked through the methodology and choices that were made in order to understand the resources and demographic nature of middle-class baby boomers. The study was designed to focus on boomers who, when they are over the age of 75, will neither qualify for Medicaid nor be able to afford today’s private-pay seniors housing and care options. The minimum amount that seniors will need in order to afford assisted living as it is priced today, as well as out-of-pocket medical expenses is $60,000. Here are a few key findings: 

  • The number of middle-income seniors will nearly double to 14.4 Million by 2029 (43% of all seniors) 
  • Seniors will be more diverse and more educated than today’s cohort
  • 67% will have3 or more chronic conditions 
  • 60% will have mobility limitations
  • 20% will be defined as “high needs”
  • 7.8 Million (54%) will have less than $60,000 annual financial resources, even when including housing equity. This group grows to 11.6 Million (81%) when excluding housing equity.

Grabowski acknowledged that assisted living and independent living communities today can help balance tradeoffs between medical care, long-term care and social needs of seniors who can afford them. Financial resources, however, dictate their housing and long-term care options.  

Aging baby boomers’ demographics mean they will face more challenges than prior generations, as they begin to need care. They are less likely to have a spouse, have fewer children to serve as caregivers, and will have less in pension wealth and other savings than preceding generations. Their sheer numbers will also pose a very serious problem. In fact, the study only projects to 2029, the year in which the oldest boomer will only be 83 years old. Peak demand for seniors housing and care services comes from seniors in their mid- to late- eighties. This means this challenge will be significant over a two-decade period, until approximately 2050.  

When Grabowski commented “Good luck with Medicaid. We can’t rely solely on Medicaid as a solution,” a grim laugh rippled through the room. While it came up in the question and answer period, there seemed to be little debate on the ability of the government to handle these problems alone. 

Instead, the study’s authors and several of the panelists urged stakeholders in industry and on the policy side to discuss a range of solutions and to work together. Grabowski, addressing approaches to solutions, recommended, “Not just a private-sector or public sector solution, but a joint public-private partnership.” On the private side, he suggested a number of strategies that might help lower the cost of housing and care for the consumer. Mixed income communities, high tech solutions to lower labor costs, better leveraging family and volunteer caregivers and a la carte pricing were all mentioned. Grabowski went on to suggest, on the public policy side, blending housing and Medicare products, similar to the new flexibility that has just been given to Medicare Advantage plans, and allowing Medicaid to pay a percentage of all services for long-term care, including room and board. He also suggested extending subsidized housing to middle income seniors. 

In addition to the article on the study’s key findings, Health Affairs published two articles with further insight and commentary relevant to the study, as well as a Kramer-authored blog post on the meaning and implications of the study’s findings. Authors John Rowe, Mailman School of Public Health at Columbia University, and Jennifer Molinsky, Harvard University, spoke on their articles, “Challenges For Middle-Income Elders In An Aging Society” and “What Can Be Done to Better Support Aging in Community?” respectively.  

Rowe, commenting on his years of study on aging and society, said “In this town policy makers, when they think of aging, they think of Social Security and Medicare and there the discussion ends.” His presentation focused on the Hartford Aging Index, which measures a senior citizens’ productivity engagement, well-being, equity, cohesion, and security in a given society. 

Molinsky’s presentation focused on the housing and community needs of aging seniors. She pointed out that by 2038 the number of 75-and-over households in America will increase from 14.1 to 28.2 million. Pearson et al.’s findings project that 20% of middle-income adults in this age group will have high needs that will make it difficult to remain at home, but Molinsky focused on the remaining 80%, many of whom will likely attempt to stay in their homes and communities for as long as possible. This group will need homes adapted to their care and well-being, as well as communities that are age-friendly. However, as she pointed out in her remarks, only 3.5% of today’s housing is accessible to scooters or wheelchairs.   

The final panel discussion, focused on policy, and moderated by Weil, featured Debra Whitman, Executive Vice President and Chief Public Policy Officer, AARP, Nancy Eldridge, CEO, National Well Home Network, Kai Hsiao, CEO, Eclipse Senior Living, and NIC’s Kramer. 

Hsiao pointed out that along with the challenges there are some real opportunities. “There’s a lot of opportunity out there. A question for the senior living sector is ‘why is our penetration rate static at 10%?’ Imagine our penetration rate if we built for this group.” 

Eldridge suggested a multi-faceted, broad-based approach to finding solutions: “We shouldn’t create a siloed intervention for this group. What we need for seniors today is nothing short of a robust system to support them. Bring down those silos, and work as a team. We need a lean program that’s very broad.” 

Whitman predicted that the shortage of care-givers would only worsen: “The only safety net for many is family. In 2010 there were seven unpaid caregivers (aged 45-64) for every person over 80. By 2030 there will be four, and by 2050 there will be only three. People today who are in their twenties and thirties have to step out of work to take care of a parent.” 

While the study’s findings shine a light on a substantial set of challenges, panelists expressed hope that, working together, public and private stakeholders would also be able to capitalize on real opportunities. As Kramer stated towards the end of the discussion, “At 10% penetration we’re not doing something right with the product. That’s a huge entrepreneurial opportunity.” 

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