BIRMINGHAM, Alabama (April 24, 2019)—Some 8 million seniors won’t be able to afford the specialty residential care they need, according to a new study—and that means HME and home health care businesses should be preparing to offer them more support at home, Jim Greatorex, vice president of VGM Live at Home, told HomeCare on Wednesday.

The study, released Wednesday in the journal Health Affairs, predicts that by 2029, there will be 14.4 million middle-income seniors, many with health care and functional needs—and 54% of them won’t have the financial resources to pay for specialty housing.

Solutions offered at a panel discussion held Wednesday in Washington, D.C., by Health Affairs offered a range of solutions, from building new affordable assisted-living communities to encouraging seniors to save through state retirement initiatives.

But what’s lacking from the discussion, Greatorex said, is efforts to keep seniors safe in their existing homes.

“That’s the best option for the client they’re talking about, the middle-class seniors who have some money but assisted living would deplete their funds,” he said. “In most cases, making their existing home safe can be done with $30,000 or less. And in doing so, you have also then allowed them to look at other resources, such as a high-quality reverse mortgage, to be able to afford living there.”

The study analyzed the increase between 2014 and 2029 in middle-income adults in the United States who will be 75 or older. The authors used data from the Health and Retirement Study sponsored by the National Institute on Aging and defined middle-income for people 75-84 as having annual financial resources of $25,001-$74,298 in 2014 dollars.

The authors determined that the number of middle-income seniors aged 75-84 will nearly double, from 7.9 million in 2014 to 14.4 million in 2029. An estimated 60% of them will have mobility limitations that impede their independence and about 20% will be “high needs,” with three or more chronic condition and one or more physical limitation. About 6% will have cognitive impairments.

“These seniors are unlikely to be able to remain in their homes without meaningful support from family or paid caregivers,” the study says—and then goes on to predict that family caregivers will become less available because Baby Boomers’ offspring may live farther away.

Yet more than half of those who are 75-84 in 2029 will only have $60,000 or less in income and assets per year, while the projected out-of-pocket spending for assisted living rent and medical care is projected to be $62,000/year. That’s including those who can draw on equity in their homes. That is, even if they want to move to specialty housing, they won’t be able to afford it.

“Most of tomorrow’s middle-income seniors will lack the financial resources required to pay for private seniors housing, regardless of their preferences,” the authors wrote. “Even if we assume that seniors devote 100 percent of their annual income to seniors housing—setting aside any personal expenses—only 19 percent of middle-income seniors will have financial resources that exceed today’s costs of assisted living.

Bob Kramer, the founder of the National Investment Center for Seniors House & Care, which funded the study, said in the press event broadcast online that experts and advocates need to consider all the options.

“The size and the sheer numbers of the elders means we need to choose ‘all of the above,’” he said. “Enabling people to stay safely at home as long as possible is a huge plus. It will save the health care system a lot of dollars.”

Greatorex said states and the federal government should look at offering tax incentives to encourage seniors to prepare to stay in their homes before they need emergency assistance.

“If we’re going to start out fresh and new with senior housing for everybody, that’s not realistic,” he said. “What is realistic is investing in the current inventory of homes and giving people a discount with some kind of tax break and get people set up to stay.”

For more insight into how HME companies can get into the home modification market—and the benefits of doing so—check out the May issue coming soon in print and online.