Eighty percent of people 60 and older continue to have very few resources to pay for long-term care or withstand financial emergencies, according to updated analysis of the situation nationally.

While older adults’ incomes and the net value of their homes increased slightly from 2018 to 2020, their financial assets and total wealth decreased.

“This is a snowballing crisis,” said Ramsey Alwin, president of National Council on Aging (NCOA), which conducted the analysis in partnership with the University of Massachusetts-Boston.

“At the same time that 11,000 people are turning 65 every day for the next several years, a growing number of older adults are facing financial stress now and will not be able to afford the care they will need in the future,” Alwin said. “Congress needs to hear this alarm bell and support programs that help all Americans age with health and dignity in their communities.”

A report titled “Increases in Older Americans’ Income and Household Assets Still Cannot Support Most During Financial Hardship” compares the income, housing value, retirement, and other savings of people 60 and older with the cost of paying for long-term care and with the Elder Index, an online tool that shows how much money older adults need to live independently. Among the findings in the report:

• The bottom 20 percent of Americans 60 and older (15 million households) have no assets. In fact, some are in debt. This group had a median income of $18,000 in 2020 and is facing economic insecurity. Almost 90 percent of them had household incomes below the Elder Index level.
• About half (49 percent) of those 60 and older (a little over 27 million households) have an average income below what they need to cover their basic needs, as calculated by the Elder Index.
• Despite older adults’ preference to age in place, 60 percent can’t afford two years of in-home long-term services and supports (LTSS).

“These findings certainly show that despite gains in income, many millions of older adults continue to live on the edge,” said Dr. Marc Cohen, co-author of the report and co-director of the LeadingAge LTSS Center at UMass-Boston. “This reality highlights just how important it is to make sure that our social safety net programs are preserved and strengthened.”

LTSS is one of the most significant costs for older adults. It ranges from assistance with activities such as bathing and dressing to medical care in a skilled-nursing facility. Over half of adults 65 and older will need these services for less than two years, and about one in seven will require care for more than five years.”

In 2023, the median yearly cost of a home healthcare aide was $75,504 and a private room in a nursing home was $116,800, Cohen said.

The COVID pandemic added additional pressures to employment, income, and savings. During the pandemic, 11 percent of people 65 and older lost their jobs. With an increase in fatalities due to COVID or related complications, widowhood was a likely source of financial shock for many. Tdhose factors put additional pressures on already significant and persistent long-term care costs, according to researchers.

Medicare doesn’tt pay for LTSS, so older adults and their families bear the financial risk directly. Medicaid covers nursing homes, but only after older adults spend down their assets to less than $2,000.

According to JAMA Network,  over a 20-year period, more than 25 percent of adults 50-plus will experience a shock resulting in a 75 percent or more drop in net wealth. Among adults 70 and older, more than two-thirds will experience at least one negative shock with financial consequences over a nine-year period.

Americans want a solution, Alwin said, citing NCOA’s ”What Women Say^™ survey of women 25 and older. It found that 94 percent of respondents across political and demographic lines support improving Medicare and Medicaid to better ensure that older adults have the option to receive care at home rather than in a nursing home. In addition, 96 percent of respondents support a tax break for family caregivers to help cover their out-of-pocket costs, and 92 percent support creating a new government program to pay for some long-term care costs.

Washington has WA Cares Fund. Workers can pay into it for long-term insurance benefits of a maximum of $36,500. The program is administered by the state.

Source National Council on Aging