Study Calls on Private Sector, Policy Makers to Create Housing Options for Middle-Income Seniors

With baby boomers steadily aging, demographic shifts in the United States over the next decade will nearly double the number of middle-income seniors 75 years and older, according to a new study from Health Affairs.

With baby boomers steadily aging, demographic shifts in the United States over the next decade will nearly double the number of middle-income seniors 75 years and older, according to a new study from Health Affairs.

The newest edition of Health Affairs included 3 studies with alarming findings about the growing state of middle-income seniors, accounting for a cohort of more than 14 million individuals who will lack the financial resources to afford senior housing or personal care services.

“Future boomers will have less in the way of savings wealth. Fewer family caregivers. They’re less likely to be married, they’ve saved less, and they have fewer children. Medicaid is already strained, so we can’t rely solely on that as the solution,” said study coauthor David Grabowski, PhD, during the webinar announcing the studies.

The study found that more than half (54%) of middle-income seniors would not be financially stable enough to cover projected average annual costs of $60,000 for assisted living rent and other out-of-pocket medical costs 10 years from now, even if they were able to attain equity by selling their home and committing all of their annual financial resources. Researchers also found that that number increases sharply to 81% for middle-income seniors in 2029 who keep assets built up in their home but commit the rest to cover the costs of senior housing and care.

Additionally, the study also projects that by 2029, 60% of US seniors older than 75 will have mobility limitations and 67% will have 3 or more chronic conditions. Within the next 10 years, the number of women who make up this cohort will outpace men, with women comprising 58% of seniors 75 years or older in 2029 compared with 56% in 2014 at the start of the study. This is largely due to the fact that women, on average, live longer than men.

“In only a decade, the number of middle-income seniors will double, and most will not have the savings needed to meet their housing and personal care needs,” said Caroline Pearson, senior vice president, NORC at the University of Chicago, in a statement. “Policymakers and the seniors housing community have a tremendous opportunity to develop solutions that benefit millions of middle-income people for years to come.”

As it stands right now, seniors with the lowest incomes have access to family caregivers, Medicaid coverage for long-term care, low-income housing, and dual eligibility. Likewise, the highest-income seniors also have access to family caregivers, privately paid seniors housing, and professional in-home care, whereas the middle-income group winds up with a mix of family caregiving or spending down to Medicaid so that they then become lower-income seniors themselves.

“Researchers say there is an opportunity for policymakers and the seniors housing and care sector to create an entirely new housing and care market for an emerging cohort of middle-income seniors not eligible for Medicaid and not able to pay for housing out of pocket in 2029,” according to the press release.

The authors explained that the creation of this new “middle market” will require innovations from both the private and public sector. From the private sector, Grabowski suggested that seniors housing could contain mixed income communities, utilize technology to lower operating costs, leverage family caregivers as seen in other countries, and perhaps take part in a la carte pricing.

From the policy side, Grabowski sees 3 instrumental approaches: Medicare, Medicaid, and housing. For Medicare, he discussed blending current Medicare housing products, such as assisted living facilities offering Medicare Advantage plans. In terms of Medicaid innovations, Grabowski wants to relax some of the rules around the program not being allowed by statute to pay for room and board of seniors housing, as seniors who qualify for Medicaid right now don’t have enough money left over to pay for housing themselves. Finally, for housing itself, he suggested extending the subsidized housing program offered to lower-income individuals to the middle-income group, as well as offering them the same tax credit.

“All seniors want to live in affordable, safe and supportive housing, and more than 19 million older adults are unable to do so. We must act now to implement innovative solutions — including robust aging-in-community efforts – to accommodate what is sure to be an increasing demand for housing that meets the needs of older adults,” said Lisa Marsh Ryerson, president of the AARP Foundation.


Pearson C, Quinn C, Loganathan S, Datta AR, Burnham Mace B, Grabowski D. The forgotten middle: many middle-income seniors will have insufficient resources for housing and health care [published online April 24, 2019]. Health Aff (Millwood). doi: 10.1377/hlthaff.2018.05233.

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