Study Calls for Action on Creating Senior Housing for Middle-Income Seniors

Published in the Woonsocket Call on August 18, 2019

A recently released report sends a stark warning to federal and state policy makers and to the private senior housing sector. The report forewarns that in the coming years, a large number of middle-income seniors, who need assisted living with supportive services, will be priced out of this level of care.

Seniors housing in the United States is paid out of pocket by seniors with sufficient assets. A relatively small percentage of Americans have long-term care insurance policies to defray the costs. For seniors with the lowest incomes, Medicaid covers housing only in the skilled nursing setting, but increasingly also covers long-term services and supports in home and community-based settings. Programs such as low-income housing tax credits have helped finance housing for economically-disadvantaged seniors.

The researchers call on the government and the senior housing sector to step up and to assist the projected 14.4 million middle-income people over age 75, many with multiple chronic conditions, who won’t be able to afford pricey senior housing.

According to this first-of-its-kind study that appears in the April 24 2019 edition of Health Affairs, 54 percent of middle-income older Americans will not be able to meet yearly costs of $60,000 for assisted living rent and other out-of-pocket medical costs a decade from now, even if they generated equity by selling their home and committing all of their annual financial resources. The figure skyrockets, to 81 percent, if middle-income seniors in 2019 were to keep the assets they built in their home but commit the reset of their annual financial resources to cover costs associated with seniors housing and care.

Accompanying the senior housing study are two perspective pieces in Health Affairs on how society can adapt to aging and supporting aging in communities.

The study, “The Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient Resources For Housing And Health Care, was conducted by researchers at NORC at the University of Chicago, with funding provided by the National Investment Center for Seniors Housing & Care (NIC), with additional support from AARP, the AARP Foundation, the John A. Hartford Foundation, and The SCAN Foundation.

Learning About the Needs of the Emerging ‘Middle Market’

“We still have a lot to learn about what the emerging ‘middle market’ wants from housing and personal care, but we know they don’t want to be forced to spend down into poverty, and we know that America cannot currently meet their needs,” said Bob Kramer, NIC’s founder and strategic adviser in a April 24, 2019, statement. “The future requires developing affordable housing and care options for middle-income seniors. This is a wake-up call to policymakers, real estate operators and investors,” he adds.

The report notes that significant financial challenges are expected to coincide with many middle-income seniors seeking seniors housing and care properties due to deteriorating health and other factors, such as whether a family member can serve as a caregiver. The study projects that by 2029, 60 percent of U.S. middle-income seniors over age 75 will have mobility limitations (8.7 million people), 67 percent will have three or more chronic conditions (9.6 million people), and 8 percent will have cognitive impairment (1.2 million people). For middle-income seniors age 85 and older, the prevalence of cognitive impairment nearly doubles.

The researchers say that this ‘middle market’ for seniors housing and care in 2029 will be more racially diverse, have higher educational attainment and income, and smaller families to recruit as unpaid caregivers than today’s seniors. Over the next 10 years, growth in the number of women will outpace men, with women comprising 58 percent of seniors 75 years old or older in 2029, compared to 56 percent in 2014, they say.

Bringing the Public and Private Sector Together

“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 at NORC at the University of Chicago and one of the study’s lead authors.

“Policymakers and the seniors housing community have a tremendous opportunity to develop solutions that benefit millions of middle-income people for years to come,” says Pearson.

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.

The study’s analysis suggests that creating a new ‘middle market’ for seniors housing and care services will require innovations from the public and private sectors. Researchers say the private sectors can offer more basic housing products, better leverage technology, subsidize ‘middle-market’ residents with higher-paying residents, more robustly engage unpaid caregivers, and develop innovative real estate financing models, among other options.

As to the public sector, the researchers call on government to create incentives to build a robust new market for middle-income seniors by offering tax incentives targeted to the ‘middle market,’ expanding subsidy and voucher programs, expanding Medicare coverage of nonmedical services and supports, creating a Medicare benefit to cover long-term care, and broadening Medicaid’s coverage of home and community-based services.

“This research sets the stage for needed discussions about how the nation will care for seniors who don’t qualify for Medicaid but won’t be able to afford seniors housing,” said Brian Jurutka, NIC’s president and chief executive officer. “This discussion needs to include investors, care providers, policymakers, and developers working together to create a viable middle market for seniors housing and care,” he says.

Adds, Lisa Marsh Ryerson, President of AARP’s Foundation, “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.”

Is Rhode Island prepared to meet the senior housing needs of the state’s middle-income seniors in 2029? If not, the state’s federal delegation, lawmakers, state policy makers and the senior housing industry must begin to chip away at this looming policy issue.

To view the study, go to http://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05233.

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Meals on Wheels Should Be Expanded

 Published in Pawtucket Times, October 25, 2013

            A warm, nutritious meal combined with social interaction can go a long way to putting the brakes to a state’s spiraling Medicaid costs.  According to new study findings detailed in this months issue of Health Affairs by Brown University public health researchers, expanding programs like Meals on Wheels, would save 26 of 48 states money in their Medicaid programs, just by allowing a person to stay in their own homes. 

            Kali Thomas, Assistant Professor of Research in the Brown University School of Public Health, says that if every U.S. state in the lower 48 expanded the number of seniors receiving meals by just 1 percent, 1,722 more Medicaid recipients avoid living in a nursing facility and most states would experience a net annual savings from implementing the expansion.

Put the Brakes to Medicaid Costs

            According to the study’s findings, Medicaid cost savings would be different in every state.  For instance, Pennsylvania would see the greatest net savings – $5.7 million – as Medicaid costs for nursing facility care decrease more than costs rose for delivering the additional meals.  Meanwhile, Florida would see a net cost of nearly $11.5 million instead. Overall, 26 states would stand to see a net savings according to the Brown University Public Health analysis, while 22 would end up spending more.

            Every state would enable more seniors, who could live independently except for meals, to remain in their homes regardless of whether they are on Medicaid.

            Thomas, the study’s lead author, believes the study’s findings can provide guidance for state lawmakers and state policymakers as they hammer out budget funding for home-delivered meals programs, which are conducted under the Older Americans Act.

            “We wanted to provide a roadmap for people,” Thomas said.

             To calculate Medicaid savings, Thomas and co-author Vincent Mor, Brown’s Florence Pirce Grant Professor of Community Health, examined data, including how many seniors in each state receive home-delivered meals and how much it costs each state to provide those meals. She and Mor also took a look at nursing facility and Medicaid data to estimate the number of seniors that Medicaid maintains in nursing facilities who are “low-care,” meaning they may have the functional capabilities to live at home. Finally they looked at the per diem Medicaid pays in each state for seniors to live in nursing facilities.

 Keeping Seniors at Home

             The study findings allowed them to estimate the incremental cost of providing meals to 1 percent more seniors in each state, the number of additional seniors on Medicaid who would no longer need to live in nursing facilities, and how much less Medicaid would have to pick up for the higher level of care in each state.

            The researchers found that the 1 percent expansion nationwide would bring meals to 392,594 more seniors at a cost of more than $117 million. Because 1,722 seniors would no longer have to live in costly nursing facilities paid for by Medicaid, total program savings would total $109 million.

            The reason why the study’s findings indicate that additional food delivery costs outstrip Medicaid savings nationwide, even though most states would save money on a net basis, is that in some very large states with relatively few low-care seniors or relatively low Medicaid per diems, food costs outweighed the resulting Medicaid savings on a relatively large scale.

            “In states like California and Florida where a 1-percent increase in the 65-plus population is a lot of people, it will cost those states a lot more to feed them,” Thomas said.

            But, as she and Mor wrote in Health Affairs, “Our analyses suggest that 26 states with high Medicaid nursing home per diem reimbursement rates, a large proportion of low-care [nursing home residents on Medicaid], and a relatively small population of older adults, could save money.”

            Thomas said states projected to lose money can opt to focus their efforts in ways that are more precise than an across-the-board expansion.

            “We’re not proposing that all states simply increase the proportion of age 65 plus receiving meals by 1 percent,” she said. “But if they were to target these vulnerable people who are at risk for nursing home placement they would likely see more savings. This is a program that has the potential to save states a lot of money if it’s done correctly.”

            Policymakers should consider not only the fiscal implications of providing home-delivered meals, which the study quantifies, but also the impact on individual seniors, said Thomas, who has seen the benefits anecdotally as a Meals on Wheels volunteer in both Florida and Rhode Island.

            Thomas’s research, detailed in this month’s issue of Health Affairs, which was completed last December, is featured in AARP Rhode Island’s award-winning documentary Hungry in the West End. Creator and director John Martin of the AARP

             Rhode Island state office screened the documentary in August at the Meals on Wheels Association of America National Conference in Boston. You can watch Hungry in the West End online at www.aarp.org/hungry.

             Although the quality of life argument is easy to see, other researchers, like Thomas, are closely looking at how the Meals on Wheels program can lower Medicaid costs.

             Based on a study by the Washington, D.C. based Center for Effective Government released in April 2013, every dollar invested in Meals on Wheels today could save taxpayers up to $50 in Medicaid costs down the road.

 Other Benefits of Meals on Wheels  

             Ellie Hollander, President and CEO of the Meals on Wheels Association of America, observes that both Brown University and the Center for Effective Government studies specifically focused on Medicaid savings attributable to nursing homes, but do not take into consideration significant savings that would be realized through reduced Medicare costs as well, through fewer visits to physicians and the emergency room and less hospitalization or reduced readmissions.

             Hollander says, “We have long known that the value of Meals on Wheels goes beyond the social and moral imperative of helping to address the epidemic of senior hunger in America.  “The friendly visit and a safety check are a lifeline enabling seniors to live more independently and healthy in their own homes, which in turn avoids far more costly health care alternatives often paid through Medicare and Medicaid,” she says.

             “The Brown University research proves what our work has long suggested to us: the Home Delivered Meals Program not only makes a positive impact for the senior, it is a good investment for the state as well,” says Executive Director Heather Amaral, Meals on Wheels of RI.

            Another study is in the works to support Thomas’ efforts to closely look at the impact of nutritious home delivered meals.  According to Hollander, a $350,000 grant from the AARP Foundation and the Meals on Wheels Association announced on Oct. 6 will enable Thomas to begin her randomized controlled trial of 600 seniors representing a cross-section of rural, urban, low income and minority populations across the country and a majority of the grant will be used to feed these seniors.            

            In this upcoming study, 200 seniors will receive meals daily, 200 more will receive a delivery of frozen meals once a week and then another 200 will continue on the waiting list as before as a control group. The study will compare quality of life, isolation, and health care utilization among individuals before and after they begin receiving meals and across the three groups.

             Holland says, “Through our generous grant from AARP Foundation, and with Dr. Thomas and Brown University’s help, we will seek to monetize the value add of the “more than a meal” component of Meals on Wheels.”

A Call for Support

            On AARP.org, Kathleen S. Connell, Rhode Island AARP State Director, calls on state lawmakers to take a very hard look at how they fund the state’s Meals on Wheels program.  Connell urges Congress not to put the Meals on Wheels program on the budgetary chopping block as a way to chop the huge federal budget deficit.

            Connell says that “Leaders need to be reminded that Meals on Wheels recipients aren’t unemployed workers waiting to return to jobs that will accompany an economic recovery. They are older retirees living on limited fixed incomes. With the cost of prescription medicines, healthcare and utilities going up, they sometimes can’t afford to eat. Many commonly sacrifice on food because of money worries – real or feared.”

            Connell notes, “Meals on Wheels is a big deal [to seniors]. No one should take it for granted.”

            Herb Weiss, LRI ’12, is a writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.