Dive Brief:

• By 2029, 54% of U.S. middle-income seniors will not have sufficient financial resources to pay for the level of care they need, including healthcare and housing, according to a new study published in Health Affairs.
• Over the next decade, the population of middle income senior Americans is projected to grow to 14.4 million, researchers found, roughly doubling from 2014's figures. About 60% of them will have mobility limitations and 20% will have high healthcare needs caused by disability or chronic conditions.
• A little more than 80%, or 11.6 million, of middle-income seniors without equity in housing will have annual assets of $60,000 or less — compared to the projected annual cost of $62,000 for assisted living rent and medical out-of-pocket spending. Another 7.8 million (54%) who do have stake in real estate (in addition to income) will still have annual financial resources of $60,000 or less.

Dive Insight:

Housing for high-needs seniors often caters to the wealthy, and state and federal services such as housing programs and Medicaid cover low-income elderly Americans. This makes it difficult for middle-income seniors to receive the care and health services they need, and the problem is forecast to only get worse.

The study, conducted by NORC at the University of Chicago and funded by the National Investment Center for Seniors Housing & Care (NIC), found the U.S. is "woefully unprepared to accommodate a growing population of often-overlooked older adults," Bruce Chernof, president and CEO of elder care charity the SCAN Foundation said.

Though the industry has seen a shift of late to adding more social determinants of health benefits to insurance, such comprehensive coverage is often only offered to the most vulnerable beneficiaries or those willing to pay a premium, such as in privately-run Medicare Advantage plans. Currently, traditional Medicare does not cover long-term care or housing.

And as baby boomers age into federal entitlement programs, Medicare and Social Security are beginning to flag under the weight. Medicare Part A funding is on a path to run out by 2026, according to the Medicare trustees report released this week.

The study, one of the first to look at housing and healthcare needs of seniors by income group, analyzed middle-income adult trends starting in 2014, lasering in on those who will be age 75 or older by 2029.

Demographic shifts in caregivers was also a point of concern. Currently only 14% of middle-income seniors live outside the home in a nursing home or other community setting like assisted living. One in four of those living at home need a caregiver's assistance, often that of a family member.

However, as the senior population continues to grow, it's unclear whether the younger demographic will be able to support it, researchers determined. Family caregiver availability has declined due in part to changing marriage patterns and lower birth rates, meaning more baby boomers may have to turn to paid care to make up the deficit, further stressing their finances.

And the report's estimates are conservative, researchers say. They assumed seniors will have $5,000 in annual out-of-pocket medical costs for their calculations — a low estimate, especially for those 85 or older, seniors with multiple chronic conditions or the disabled — and that housing options will remain stable.

"This is just the tip of the iceberg, in terms of this cohort," NIC Chief Economist Beth Mace told Healthcare Dive.

Recent demographic, health and financial trends need to continue for researchers' projections to be accurate, but the report outlines a significant area of unmet social need. "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," the report notes.

The government could offer tax incentives for middle-income developments, raise eligibility limits for federal housing or expand the benefits offered under Medicare and Medicaid, among other solutions. But Mace believes a public-private partnership will spring up to address middle-income seniors care needs.

"I fully believe there's going to be some entrepreneurship in the private sector," Mace said. Housing communities could create their own Medicare Advantage plans, for example — there's already a spattering of those across the U.S. — or find technology to increase efficiency and lower costs.