As we research issues of interest to seniors for the AgingOptions blog, we see a familiar predicament when it comes to medical expenses and the cost of senior care. Low-income seniors can typically take advantage of government-backed care through Medicaid and the VA. Upper-income seniors often have fewer worries since, with proper planning, they can self-finance. But what about those in the middle? These are the seniors most often ignored, and a recent report suggests that, as hard as it is for them to afford care today, the problem is only going to get worse.
Unaffordable Costs will Plague Middle-Income Seniors
This article describing the plight of middle-income seniors appeared on the Kaiser Health News website just a few weeks ago, with a stark title: “In 10 Years, Half of Middle-Income Elders Won’t Be Able to Afford Housing, Medical Care.” Written by Victoria Knight, the article is based on a study just released on the Health Affairs website that predicts, using demographic data, that as many as half of all middle-income seniors are staring at a financial crisis within the coming decade. The Kaiser article by Victoria Knight summarized the findings this way. “In 10 years, more than half of middle-income Americans age 75 or older will not be able to afford to pay for yearly assisted living rent or medical expenses.” The Health Affairs study reports that the range of household income defined today as “middle” runs from $25,000 per year to just under $75,000 per year for those between the ages of 75 and 84. The Health Affairs study estimates that there will be 14.4 million people in that cohort by 2029 as the boomers age.
“And it doesn’t look good for that group because of the rising costs of housing and health care,” the Kaiser article warns. “By 2029, more than half of the middle-income seniors will have annual financial resources of $60,000 or less, even if the equity in their homes is included. Projections put the average annual assisted living and medical expenses cost in 10 years at $62,000, meaning that a majority of the middle-income seniors then will not be able to afford an assisted living facility.” But even that projection might be unrealistically optimistic, the study authors warn, because for research purposes they estimated out-of-pocket medical costs at $5,000 per year. In fact, actual costs could rise much higher, putting affordable care that much farther out of reach.
Unaffordable Costs Will Hit Seniors Who Are “Often Overlooked”
Authors of the Health Affairs study echoed the statement we made at the top of this article about middle-income seniors being the most frequently overlooked by policymakers and the senior housing industry. “The low-income cohort has been taken care of by tax subsidies, while the high-income cohort is largely self-sufficient. But the middle-income seniors have been ignored,” said Beth Burnam Mace, economist and senior housing expert. Middle-income seniors, says Mace, are also the group that has been “often overlooked” when policymakers and legislators plan for the housing and care needs for aging Americans. As if to underscore this observation, the Health Affairs study is titled, “The Forgotten Middle.”
The affordability crisis in assisted living and medical care is going to be exacerbated by longer life spans, which increases the likelihood that more seniors will be aging with a variety of infirmities. The longer seniors live with dementia or mobility issues, the more costs will rise along with the need for ever-escalating levels of care. Health Affairs researchers project that 60 percent of the middle-income seniors in 2029 will suffer from impaired mobility, and one in five will be considered “high needs,” meaning they have three or more chronic conditions and one or more limitations in activities of daily living, such as bathing or dressing. Roughly one senior in 12 will have some form of cognitive impairment. “Seniors living with mobility limitations, chronic conditions or cognitive impairment are more likely to need care and support such as that offered by an assisted living facility,” says the Kaiser article. But they won’t be able to afford it.
Unaffordable Costs Will Require a Shift in Health Care Policy
No matter how you slice it, today’s seniors need a robust plan to deal with tomorrow’s realities. As the Health Affairs study explains, middle-income seniors in the 75-84 age group “will face a very different set of challenges relative to today’s middle-income seniors.” Those who are 65-74 years old today have lower overall savings, higher levels of debt, and less likelihood that they have a traditional pension. Meanwhile, care costs are rising, and – for those seeking to age in place – there will be fewer family caregivers available per senior. “Consequently, Medicaid, the dominant payer of long-term care in the U.S., could see ballooning demand as the number of seniors in need of such care increases. A key policy question is how future middle-income seniors, who do not qualify for Medicaid and may have fewer family caregivers, will access housing and care services.”
Avoiding Unaffordable Costs Tomorrow by Taking Action Today
Planning for your health needs in retirement is an urgent priority, but here’s a partial solution: one way to ease that planning process is to do all you can to stay healthy today. We at AgingOptions have generally believed that aging men and women are better served by entrusting their health care to a geriatrician, not merely a family practice doctor. The difference is significant, because a geriatrician is thoroughly trained in the unique health care needs of older adults. These professionals will take the time to listen and to evaluate carefully, and you’ll feel like an individual, not a number. We urge you to say good-bye to cookie-cutter medicine and instead to call AgingOptions this week and let us provide you with a list of geriatricians in your area. The steps you take today may keep you healthier and more independent in the years to come – and even keep you out of assisted living that much longer.
We also urge you to consider your future housing and health care needs, not by themselves, but as elements in an overall retirement strategy. If you’re getting serious about planning for your retirement future, we hope you’ll accept the invitation from Rajiv Nagaich of AgingOptions to join him soon at a free event called a LifePlanning Seminar. Rajiv will show you an exciting model for comprehensive retirement planning in which health care, financial security, legal protection, housing choices and family communication are all woven together into one powerful and seamless blueprint. Come discover how to build the retirement of your dreams! You’ll find a calendar of upcoming seminars on our Live Events page – then simply register for the date and time that works for you.
There’s no mystery to proper retirement planning – it’s available to you today from the professionals at AgingOptions. Age on!
(originally reported at www.khn.org)