Three-Quarters of Middle-Class Seniors Priced Out of Assisted Living by 2033

In general, middle-income seniors have income and assets that make them less likely to qualify for Medicaid. At the same time, they may not have adequate resources to pay for the rising costs of housing and care options they need.

NORC study done in 2019 and updated in 2022 shows that nearly three-quarters of middle-income seniors in the US will be unable to afford assisted living programs by 2033 without selling their homes. It is the first study of its kind focused on a growing health care crisis.

Data Used in the NORC Study

The researchers examined gender, race, and education and estimated people’s health, cognitive function, and mobility status using the data for these conditions in 2018.

They evaluated financial resources in 2018, starting from actual income and assets. Then grew them based on the historical changes in each category, annuitized across each senior participant’s life expectancy and their spouses.

Data for financial resources included fixed income streams, such as Social Security, and annuitized assets like retirement savings or mutual funds. The study did not assume adult children could provide support. While housing equity is considered, the reality is that some individuals may be reluctant to sell their homes or have a spouse who continues to live there. Also, many seniors may want to keep their homes as a resource to protect against outliving their assets or having a catastrophic medical event.

With 16 million middle-income seniors in 2033 and 11 million over the age of 75, the size of this demographic will double to include the following statistics:

  • Roughly 9.5 million will be unmarried, widowed, or divorced
  • Four in 10 will not have family members living nearby to offer care or support
  • Over age 75, 54% will have three or more chronic health conditions, 56% will have mobility limitations, and 31% will have cognitive impairments
  • Average financial resources of less than $65,000 in income and annuitized assets will not cover health, personal care, and housing services

Even after selling their homes, seniors in 2033 will struggle to pay for assisted living or require additional help from family members. Health limitations will make it hard to live independently. Without government assistance like Medicaid, this creates a significant problem. Clearly, efforts must be made to improve the affordability of long-term care for seniors, particularly for those of lower middle incomes.

What It Means for the Future

Without a long-term care system able to accommodate a more diverse set of older adults and families, only the individuals with the lowest incomes will be provided with care. Others will be reliant on their families.

Combined public and private policymakers should examine healthcare and housing policies to extend funding for in-home care and caregiving support to prevent middle-income seniors from spending down all their assets to transition to nursing homes. And the long-term care industry must offer more affordable senior housing and in-home care options.

An Immediate Solution

Estate planning and elder law services are necessary to prepare for long-term care costs in the future. By starting early, a thorough evaluation of income and assets can provide resources and options over time. Long-term care and Medicaid planning, including using trusts to protect assets from being spent down for care, can prevent your clients from having a financial and medical crisis.




What is the Difference Between Medicare and Medicaid?

Medicare and Medicaid are two different government programs for healthcare.  It is important to understand the difference between them.  We will discuss how the program benefits differ, how eligibility for each program is established, and discuss some recent news pertaining to each program.

Medicare vs. Medicaid – What are the program benefits?

Medicare is a program administered by the federal government to provide healthcare to certain populations. Original Medicare is divided into Parts A and B.

Medicare Part A covers hospital care and a limited period of nursing home care, home health services, and hospice care.  Medicare Part A will only cover nursing home care if –

  1. There was first a qualifying hospital stay of 3 days of inpatient care; and
  2. Nursing home care was needed relating to the hospital stay; and
  3. The patient entered the nursing home within a short time of the hospital stay (usually within 30 days).

Thereafter, only the first 20 days of nursing home care are paid for by Medicare Part A.  Days 21 through 100 of care require a partial payment by the patient.  Any care after 100 days is not paid at all by Medicare Part A.

Medicare Part B covers traditional healthcare expenses, such as visits to a doctor, blood tests, and X-rays. In most cases, a referral is not needed to see a specialist.  Original Medicare does not cover prescription drug coverage; however, you can enroll in Medicare Part D through a private insurance company with paid premiums.

Medicaid is also a program intended to provide medical benefits to certain populations.  It is a joint federal-state program.  While states receive federal funding and must follow specific federal rules, each state administers its own Medicaid program.  Medicaid covers all types of medical care, including long-term care, such as a nursing home.  However, eligibility criteria are more stringent when trying to qualify for long-term care.

Medicare vs. Medicaid– How is eligibility established?

Eligibility for Medicare is simple – if you are over age 65 and have paid Medicare tax through your employment for at least ten years, you qualify. You can get Medicare Part A at age 65 without paying any premiums if:

  • You receive Railroad Retirement Board benefits; or
  • You are eligible to receive Railroad Retirement Board benefits or Social Security benefits but have not yet filed for them; or
  • You or your spouse had Medicare-covered government employment.

If you or your spouse don’t qualify for Medicare Part A because neither of you paid Medicare tax through your employment, you may still be able to obtain Medicare Part A via paid premiums.  Eligibility for Medicare Part B is the same as for Part A but requires a paid premium.  Some folks qualify for Medicare benefits even though they are under age 65, including younger people with disabilities and those with End-Stage Renal Disease.

Eligibility for Medicaid is needs-based.  Meaning, income restrictions for programs cover pregnant women, children, the disabled, and the elderly.  If your income is under the amount specified for your state, then you likely qualify if you are in one of those groups.

If long-term care is needed, however, there are also asset restrictions. An applicant cannot have over a certain amount of assets and still qualify for nursing home care benefits.  However, applicants can retain an elder law attorney to do legal planning to protect assets while still getting qualified for benefits.  This way, money and property are preserved for their family and won’t have to be spent on care.

In addition to income and asset rules regarding nursing home Medicaid benefits eligibility, there is a look-back period.  Suppose you had transferred assets during a specific time period before the Medicaid application was submitted. In that case, you will likely receive a penalty where you are not eligible for benefits for a period of time.  Again, an experienced elder law attorney can best help you navigate the application process to best manage any prior transfers for your benefit.

Medicare and Medicaid– What are some recent developments?

This year, the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act was signed into law.  It eliminates the long waiting period, sometimes up to 7 months, for coverage for certain enrollees.  Beginning in 2023, coverage for Medicare will being in the month after the participant enrolls.

Recently, legislation was reintroduced in the Senate to lower the age from 65 to 50 in order to qualify for Medicare benefits.  If passed, this would mean millions more Americans would become eligible for Medicare.  Proponents of the legislation contend that getting folks on Medicare could save lives and provide much-needed care.  They point to the fact that many people don’t have access to private insurance, and so care is delayed.  Opponents point out the financial strain this legislation would cause on the federal budget. Opponents also point out that this expanded healthcare might allow more folks to retire at a younger age, putting a strain on the workforce. Hospitals oppose the legislation, as Medicare reimbursement rates are much lower than what the hospital would receive from private insurance plans.

Recent news in the Medicaid world is that work requirements have become all but extinct.  President Trump made it clear under his presidency that he supported Medicaid work requirements for individuals who were capable of working, meaning, Medicaid recipients who could work, would be required to work, look for work, or participate in volunteer work each month.  If the requirement wasn’t met, Medicaid coverage would be lost. There were several exceptions to the work requirement, including exceptions for the elderly, the disabled, and even for pregnant women, full-time students, and primary caregivers to dependents.

Several states submitted Medicaid waivers to implement Medicaid work requirements, and some were approved.  Arkansas was the first state to implement such a work requirement policy.  They had their program in place for about a year before a federal judge halted it.  While litigation was pending, Joe was elected.  He has made it clear that his administration does not support Medicaid work requirements, and so, those will not be implemented by states going forward.


Medicare and Medicaid are two very different programs; each provides certain benefits has certain criteria for enrollment.  Between the two, however, only Medicaid will cover long-term care expenses for more than 100 days.  Getting long-term care Medicaid can be a tedious process, and legal strategies can be employed that will help you protect assets while getting needed care.  If you or someone in your care needs long-term care soon, or you would like to be proactive and protect assets in advance for more asset protection, then an elder law attorney can be in your corner and help you navigate the legal strategies available to you.