The first state-level assessment of middle-income older adults that the National Investment Center for Senior Housing & Care conducted has lessons for providers all over the country, NIC Senior Principal Ryan Brooks told the McKnight’s Business Daily on Monday.
The assessment builds on the 2019 NIC-funded “Forgotten Middle” study, which found that 54% of the 14.4 million middle-income older adults in 2029 in the United States will lack the financial resources to pay for senior housing and care. An update to that study released earlier this year found that more than 11 million older adults (72%) will not be able to afford assisted living by 2033, and they likely won’t qualify for Medicaid to pay their long-term care needs either.
For the new state-level assessment, researchers with NORC at the University of Chicago recalibrated a nationally representative forecast of the 2033 middle-market population to produce estimates reflective of future California residents, Brooks wrote in a blog post.
California’s middle-income population aged 85 or more years is expected to double over the next decade, from 230,000 to 463,000, and only a portion of these individuals will be able to afford private-pay assisted living, according to Brooks.
“By reducing the potential price point of assisted living, the potential market size expands,” Brooks wrote. “If operators can reduce the price point of assisted living by $10,000, an additional 209,000 Californians — an increase of over 25% — would then have the resources available to afford that product.”
The socioeconomic demographics and cost of senior living in the Golden State vary from the national average, Brooks told McKnight’s. California, in addition to being more racially and ethnically diverse than the national overall average, tends also to have a higher percentage of individuals with less than a high school education, a higher percentage of individuals with a college education, and people more likely to not have children living within 10 miles.
“That piece right there is critically important, because the further away children live, the less realistic it is for seniors to take advantage of their children as primary caregivers,” he said. “So that, in turn, is going to have an impact on the demand in senior housing.”
Even with differences in demographics and higher costs in California, the trends found in California mimic some trends found in the broader Forgotten Middle study, Brooks said. That study indicated that the older adult population will be more racially and ethnically diverse in the future, they’ll be less likely to be married, and they’ll be less likely to have children living nearby.
“These things sort of follow a pattern that’s similar, at least trendwise, from the national average,” he said. “So there wasn’t much that surprised me, but I do think that there are some lessons that providers can take away from this.”
