The assisted living sector touts itself as the most cost-effective option to provide quality-of-life care and services for the nation’s older adults. But that value comes at a cost, according to a new report.

Seniorly set out to determine how much assisted living communities actually cost and how those costs stack up against other options, including in-home care, by analyzing the average cost to consumers in all 50 states.

The price of assisted living, as with most business offerings, is increasing. Between 2021 and 2023, 30 states saw average costs for assisted living rise — with Wyoming (a 53% increase), West Virginia (46%) and New Hampshire (46%) seeing the biggest average increases, according to the report. The 2023 national average monthly cost of $4,401 is an 8% increase over 2021.

Costs charged to consumers actually fell in 15 states — Washington saw the biggest decline, at 16% — and remained relatively flat in six states, according to the report. 

The average monthly rent for assisted living communities ranged from $2,946 in Louisiana to $8,248 in New Hampshire, where it was almost double the national average. Average monthly costs were more than $5,000 in 10 states, most of them concentrated in New England and the Mid-Atlantic, whereas the most affordable states included Indiana ($3,695), Iowa ($3,420) and South Dakota ($3,378).

Middle market highlighted

The cost of senior living is shining a spotlight on options for the “forgotten middle,” those whose incomes are too low for them to be able to afford current private-pay senior living options but too high for them to qualify for federal assistance.

A recent Milken Institute report, released in partnership with the National Investment Center for Seniors Housing & Care and CVS Health, projected that almost three-fourths of the estimated 16 million middle-income older adults who will be aged 75 or more years will be financially unprepared to afford housing to meet their needs in 2033. Even with home equity, the Milken researchers found, only 39% of those middle-income older adults will be able to afford assisted living.

Another recent study from the Harvard Joint Center for Housing Studies, released last month, found that only 13% of adults aged 75 or more years who are living alone across 97 US metro areas can afford to move into an assisted living community without starting to cash in their assets.

A NIC-funded 2019 study by NORC at the University of Chicago found that 54% of middle-income older adults will lack the financial resources to pay for senior housing and care in 2029, calling for a combination of public and private efforts to address the looming crisis.

The Seniorly study in part used data from the US Census Bureau’s 2022 median annual household income for states and savings rates from the Bureau of Economic Analysis. In doing so, Seniorly estimated that it would take the average American 17.2 years to save for one year of assisted living. 

Using those data to look at the affordability of assisted living, Seniorly found that New Hampshire residents would need to save for 26.8 years to cover a single year of assisted living, with West Virginia (26.1 years), Mississippi (24.8 years), Wyoming (24.6 years) and Delaware (21.7 years) rounding out the top five states as far as timing. 

Maryland came out at the other end of the spectrum, with residents needing to save an average of 11.7 years to cover one year of assisted living costs, followed by Utah (12.3 years), Minnesota (12.3 years), Georgia (13.3 years) and Washington (13.4 years). 

In comparing assisted living with home care costs, Seniorly pointed to a report from Genworth Financial that put the monthly cost of a home health aide at $5,462, although wide variation exists between states. Minnesotans will pay the most for home care, with a median monthly cost of $7,333, compared with $3,472 for assisted living. West Virginia was the least expensive state for home health aides at $3,793 per month, compared with $4,846 average monthly rent for assisted living.

Some question value

The assisted living industry’s pricing structure and providers’ for-profit status were two topics examined in a New York Times and KFF article package in November. Costs also were discussed in a December Washington Post article package looking at the deaths of residents who had eloped from communities. 

Those and other lay media investigations into the assisted living industry led the US Senate Special Committee on Aging to launch a review of the industry, including questions to three large providers, and to schedule a Jan. 25 hearing based on “significant concerns” about costs, staffing levels and resident safety.

A new report released Tuesday by the Milken Institute presents four potential solutions to improving the financing and delivery of housing for the “forgotten middle,” those whose incomes are too low for them to be able to privately pay for current senior living options but too high for them to qualify for federal assistance.

This group was named and quantified in 2019 and 2022 studies. The Milken Institute undertook the research due to the long-standing — and growing — gap in available senior housing and care options affordable care options to this group, according to Lauren Dunning, director of the Institute’s Future of Aging Advisory Board. More than half of middle-income Americans 75 and older are projected to fall into the “forgotten middle” by 2029.

But a central purpose of the report, Dunning told McKnight’s Senior Living, was to spotlight the flip side of the challenge — the opportunity for innovative senior housing and care offerings, options and solutions addressing the unmet needs and wants of older adults.

“Pioneering operators are already utilizing unique levers to serve the ‘forgotten middle,’ creating healthcare and payer partnerships, developing models centered around resident volunteering, and introducing new a la carte arrangements,” Dunning said. “Lowering housing and care costs can also increase the value proposition for investors and present compelling selling points for prospective consumers.”

Senior housing operators are innovating, Dunning said, and now the call to action is to bring that to scale across the nation.

The potential solutions presented in the new report, Dunning said, embody an overarching theme that senior housing is “approaching a new era” of integration in the healthcare continuum, within communities, and across sectors, such as technology:

1. Establish a social enterprise to refinance and rehabilitate existing distressed senior living properties.
2. Design a revolving loan fund to provide a sustainable source of long-term capital.
3. Use a pay-for-performance model to attract upfront funding for housing and provide a new revenue stream to offset the ongoing costs of providing care by delivering long-term cost-savings for payers.
4. Launch a regional pilot program to generate data supporting partnerships between senior housing operators and payers in value-based care.

The report, titled “Innovative Financing and Care Models to Scale Affordable Housing Solutions for Middle-Income Older Adults,” comes as the need to address cost barriers to affordable senior living and care increases. It presents research findings from Milken’s Financial Innovations Lab conducted by the institute’s Innovative Finance and Future of Aging teams. Milken partnered with the National Investment Center for Seniors Housing & Care and CVS Health last summer to host a series of meetings with 80 experts from healthcare, senior living and care delivery, finance, technology, government, philanthropy and academia.

There are a few groups of stakeholders working to advance the recommendations outlined in the report.

“We are excited that the industry has embraced the report’s findings, and we will continue to help facilitate the execution of the solution alongside the working groups,” Dunning said.

The ‘forgotten middle’ dilemma

It is projected that nearly three-fourths of the estimated 16 million middle-income older adults 75 and older will be financially unprepared to afford housing to meet their needs in 2033, with more than half projected to live with three or more chronic conditions and mobility limitations, according to the report authors.

Even with home equity, 39% of middle-income older adults will be unable to pay for assisted living, but 67% of those individuals are expected to experience three or more chronic conditions, and 60% will have limited mobility.

Compounding the problem is the intensifying shortage of direct care workers and lasting economic effects of the COVID-19 pandemic on senior housing developers in the form of higher costs for materials, labor, operations and employee benefits. Those factors contributed to a 17.8% increase in senior housing development costs between 2020 and 2022, according to the report.

But optimism exists within the industry that pandemic disruptors have changed the way developers and operators design and deliver housing and care, with innovation driving the overall value proposition of senior living, according to the authors.

In a case study, the report highlighted 2Life Communities’ Opus Communities project, which broke ground in March as one of the nation’s first senior housing projects designed specifically for the middle market. Among the approaches the project is taking to reduce operating and state costs, Opus will require residents to volunteer 10 hours per month, offer meal service just three nights a week and encourage membership in nearby Jewish community centers for activities, to reduce in-house entertainment and activity costs.

Lisa McCracken, the new head of research and analytics for the National Investment Center for Seniors Housing & Care, talked during Wednesday’s LeadingAge policy update call about what she is seeing in her crystal ball as the industry enters the new year. 

“The pandemic was an accelerant across a lot of different levels. A lot of things unfolded much quicker,” she said.

The industry, McCracken said, is in the earlier stages regarding much technology, especially as relates to adoption. That reality, she added, brings questions about how to pay for it, who will pay for it and what providers can cover from an investment standpoint if technology helps improve outcomes and efficiencies.

Artificial intelligence also presents opportunities in terms of predicting when a resident’s health might start to decline or when a resident might be prone to falling, and to identify signs of employees who may be more likely to leave their jobs, McCracken said. 

“There is a lot of predictive data out there,” she said. Generative AI, McCracken added, processes data in different ways and helps with the human touch aspect of care and service provision by allowing staff members “to do the more important things.”

“I’m a big fan of a lot of the workforce tech that helps from an efficiency standpoint to reallocate staff time,” she said.

NIC, she added, is working with NORC at the University of Chicago to quantify the value that senior living brings to individuals from the standpoint of quality of life, longevity and health outcomes — and how that value can translate to the reimbursement side for some operators. Organizations, McCracken added, must adopt a business intelligence and analytics mindset to better quantify the sector’s story.

“How can you prove your own worth?” she asked. “We know it, we feel it, we see it — but we live in a world that demands the evidence. We need to do better at that.”

The integration of wellness into offerings, as well as risk partnerships with payers, are other innovative happenings that McCracken said she is seeing, “recognizing we can’t do this alone, and maybe we don’t need to be the end all, be all, but a convener to make bold moves.”

Partnerships, she added, are helping NIC propel some initiatives forward. McCracken mentioned a partnership with the Milken Institute that will yield a report next week regarding middle market solutions for senior housing and care. This report follows the November announcement of a $3 million grant that NIC provided to the institute’s Center for the Future of Aging to “develop bold new models” for senior housing and care. As part of that effort, Nexus Insights, a think tank founded almost four years ago by NIC founder Bob Kramer, is merging with the new Aging Innovation Collaborative within the center.

“We recognize that NIC has a powerful voice within the senior housing and care space, but others are looking at the population of older adults and saying what we need to know, how to partner, how to think innovatively,” McCracken said.

Q: How did you first become interested in the area of long-term care?

A: Probably similar to a lot of other folks, it was a little accidental. My background and training is actually in clinical psychology, but I had always been involved in research and initially aspired to be a professor in academia. Instead, I went into clinical work for a few years, and I still had a hand in the research side of things. But after several years of doing that, I joined Holleran, a research consulting firm in the industry. That’s really what opened up the doors to me to this whole world that I did not even know existed. I loved it from day one.

Q: What appeals to you about working in the industry? Why do you stay?

A: Hands down, it’s just the work that’s being done, and that’s across the spectrum. I’ve always appreciated the work that is being done and the trust that people put in you. It’s good work; it’s fulfilling work, and I like to feel that the work I’ve done the past 23 years with information and data and insights really just helps organizations and individuals to do all of that better.

Q: What are some of the ways that you’ve seen the industry change over time?

A: When I look back, even just in the past five to 10 years, things have definitely changed. You can look back and see where, first of all, there’s more choices for older adults these days and, frankly, even living in your home. We’ve seen a lot more technology support that has enabled some of the aging in place. And whether they need some support services or not, that variety of support is available in more settings. Some of that has had to do with the changing consumer, too.

The other thing that we’ve seen a greater focus on is this focus on living your best life and wellness — the prevention type of activities. We have shifted to, this is the place where you maybe go to retire, maybe slow down a little bit, to where you can come here and live your best life, and how can we enable that?

That’s part of what I’ve seen as the value proposition — what can we provide in this housing setting? The senior living setting is going to be much better than what you can have in your own home prior to moving in. Those are things that I think about.

On the hospitality side of things, the bar has been raised a good bit there, with a number of different things — dining options, housing options and settings.

Obviously, we think about labor and those dynamics that have changed in recent years. We’ve always had committed, wonderful people, but I think the focus on them and the importance of the staff as an equal customer to the older adult has really advanced a good bit in recent years. Those are things I look back on, and think we’re in a better place.

There are more choices for individuals as they age. I think their ability to do it in a way that’s self-directed by them is greater. And I’m proud of the sector for advancing in that regard. We’ve still got a ways to go, but I think that we’re more on top of some of the consumer preferences and wants and using some of the technologies and advancements to do all of that better.

Q: How have you seen the consumer change over time, and is senior living rising quickly enough to answer those needs?

A: If you think back to 23 years ago and all of the web-based review systems and information at your fingertips to inform the customer, whether it’s the older adult or whether it’s their family, you can see more reviews. You also can see more employee reviews of what is this place like to work here. I think that sort of transparency, whether it’s provided by you or your constituents, puts us in a place to all be doing a better job and continuing with quality improvements.

We know that the active adult segment continues to grow, so I do think that the industry is responding and trying to give more choices and options depending on where people are.

But at the end of the day, we know the majority of people still want to age in their own home. So where do we find that balance? 

The one area that has been very big and where we still have a lot of work to do is with the group in the middle. I think we could all argue here that having more low-income housing is as well. I feel like we’ve made progress. We have more today than we did even five years ago, but that cohort is so big. We’ve got to crack that nut as a sector, but it’s not easy. It’s tied to the economic conditions, and it’s tied to construction costs and a lot of different financing mechanisms.

Q: Talk about your new role as head of research and analytics at NIC. How does that compare with what you were doing at Holleran and Ziegler?

A: When I sit back and I think about it, it’s actually a blend of my 13 years.

When I was at Holleran, it was very heavily focused on a lot of resident satisfaction, family member satisfaction, staff engagement.

At Ziegler, I really covered a lot of the macro industry trends — how was the industry behaving and growing, and everything from technology to labor to consumer types of areas to home- and community-based services, but also with capital. 

At NIC, it’s really the gamut of all of that, which I appreciate. I also feel it’s a significantly large platform in terms of audience. NIC is an organization that is very well respected, and we have the ability to really impact the sector in some pretty meaningful ways. 

We’re also doing what we call sponsored research, and I’m really excited about these in particular. We had a recent announcement of a $3 million grant to the Milken Institute for the Center for the Future of Aging Innovation Collaborative. It’s exciting that a group is going to demonstrate leadership and do some consumer research. There is a lot to come out of that group.

We are continuing our work and released information around frailty of individuals living on their own in the greater community versus within a seniors housing community. We’ve got some really exciting research coming out around longevity that is being led by researchers from NORC at the University of Chicago, and continuing work on the middle market with four potential models of how to finance and scale those middle-market seniors housing and care projects. And then there’s a great research study coming out from the Harvard Joint Center for Housing Studies focusing on affordability. 

So I feel like what I’m doing right now is the next step in my career and really a blend of the past 23 years, both with Ziegler and Holleran.

Q: With your depth of experience, where do you think the senior living field is headed into the future? What trends are you seeing?

A: I think there will be a focus on wellness and prevention. Some of those technologies, like AI, and where you can start to predict everything from workforce-related things — where is this person at, and are they at risk of leaving, or who’s going to be the right fit for a new hire, to predicting potential falls.

I think about greater integration. I still think we can function in our silos a little bit — whether it’s the tech companies or the operators or the hospitals and health systems — I think we are seeing more of some of these value-based care partnerships and initiatives. How do we provide housing and support services where it’s needed for the whole person and not just manage certain aspects? I think we need to be more innovative when we think about what we offer. At the end of the day, for people who reside in our communities, we have a unique opportunity to make a pretty significant impact above and beyond just the day-to-day services that we’re providing, and keep them healthier for longer.

What we all intuitively have known for many years is that these settings can really make a difference in terms of some longevity, frailty and potential outcomes. So we’re excited to see some of that research unfold in 2024. And what does that mean for other sectors as it relates to payers like Medicare Advantage plans and CMS? Does that put a different perspective on how they view the industry and the benefits from a quality-of-life and longevity and outcomes standpoint?

A lot is underway. One of the things that attracted me to NIC and to take this position was, in the past year, the board and leadership put out a new strategic plan with five focus areas. I think they are really forward-thinking — age tech, the ongoing commitment to the middle market, partnering for health and innovative whole-person models, value-based care, active adult. I feel like we’re having some really great conversations and movement forward with that. To move forward — the strategic plan and how our team supports that from a research analytics and thought leadership standpoint — that’s what excites me when I look at the year ahead.

The first of the baby boomer generation (those born between 1946 and 1964) turned 80 this year, and that means that some changes are coming for senior living and care. A separate study from NIC and NORC at the University of Chicago, the “Forgotten Middle,” found that the population of Americans aged 75 or more years will reach 33.5 million people by 2029.

Key takeaways from the NIC/Harvard report released earlier this month:

• In some markets, assisted living can be less expensive than living in a home in the greater community.
• Most homes don’t meet requirements for aging in place.
• Affordable options are needed.
• And yet, “the aging demographic will necessitate a multitude of housing and care alternatives.”

“While this study has important implications for the cost of in-home care compared to assisted living, the reality is that the aging demographic will necessitate a multitude of housing and care alternatives. The middle-market older adult cohort is severely underserved,” NIC Head of Research and Analytics Lisa McCracken wrote in a blog post. 

“Older adults, whose incomes are often fixed or declining, increasingly face the twin challenges of securing affordable housing and the services they need to remain in the home of their choice,” the researchers noted in a press release issued in conjunction with the report. “When [long-term care] services are added to housing costs, only 14% of single people 75 and over can afford a daily visit from a paid caregiver, and just 13% can afford to move to assisted living.”

According to the study, approximately 60% of the members of the middle- income market are expected to have mobility limitations, approximately 20% will have chronic and/or functional limitations and 8% will have some form of cognitive impairment.

“There is going to be a significant need for housing that can offer access to services and care in an affordable manner,” McCracken said.

“This report can help providers, policymakers and other stakeholders better appreciate that continuing to live at home or pursuing many congregate residential care options are not financially within the reach of many,” she added.

The Negaunee Foundation is a Chicago nonprofit foundation that supports cultural, historical, educational institutions and museums, along with performing arts organizations in the Chicago area.

The funds will be used for changes at the nonprofit organization’s “legacy building,” Caledonia Senior Living & Memory Care, in North Riverside, IL. The Chicago Scots own and operate the five-acre Caledonia Senior Living & Memory Care community as its principal charitable purpose. The community includes the 114-year-old Scottish Home and seven-year-old MacLean House just 15 minutes from downtown Chicago.

“Chicago Scots will realign its mission to provide for future unmet needs of seniors in Chicago,” said Charles Gonzalez, chair of the Chicago Scots Board of Governors, in a statement. “Our mission will be made manifest in a model of living designed to connect people through comprehensive, high-touch care based on community and companionship.”

President and CEO Gus Noble noted that with members of the baby boomer generation — those born between 1946 and 1964 — aging into senior living, there will be an even greater need for long-term care for the middle market. The baby boomers are the second-largest generation in US history, with an estimated 76 million individuals.

“In just a few years, there will be many millions of older Americans without the wealth to pay for long-term care as it is currently configured but with too much to qualify for government support,” Noble said in a statement. “They are the ‘forgotten middle.’  They will want to live collaboratively in community with others, to be connected and not isolated, to be social and not lonely.”

He said the gift from the Negaunee Foundation “will empower us to relieve distress caused by aging – medical, cognitive and social.”

Chicago Scots will collaborate with consulting partner Alford Group on its transformation plans.

“Time and again throughout their long history, Chicago Scots have positioned and repositioned themselves to be relevant in the field of care,” Alford Group Vice President Donald A. Cooke said.

Item: Report: Alternative approaches to senior living, LTSS needed for growing older adult population

The gist: A recent story highlighted a report from the Harvard Joint Center for Housing Studies, revealing that only 13% of adults aged 75 or more years, living alone across 97 metro areas, can afford to move into an assisted living community without depleting their assets.

Why this matters: We’re hearing a lot these days about the need to serve the so-called middle market. (I say “so-called” because industry views on the meaning of that range can vary considerably.) What this report makes clear is that the senior living sector more than has its work cut out here. Success is not just going to be a matter of paring options and operating costs to the bone — although that, too, likely will need to be a part of the equation. Essentially, those findings suggest operators will need to re-imagine how to reach this market. And that, my friends, is going to be a very heavy lift.

Item: CCRCs continue to report higher occupancy than other senior living segments

The gist: Continuing care retirement / life plan communities continued to outpace non-CCRCs in senior living occupancy in the third quarter, according to a data analysis from specialty investment bank Ziegler.

Why this matters: At first glance, the implication is obvious: These are good times to be running CCRC / life plan communities. Part of the advantage is that CCRCs often can charge higher entry fees and monthly rates. So everyone should want to become a CCRC, right? Not so fast. Many of these campuses have a 60-acre or larger footprint, which can be a substantial barrier to entry. Moreover, the full-service aspect of CCRCs can backfire, especially if one component of the portfolio — such as skilled care — hits hard times. Then what? It’s worth noting that the things that make CCRCs formidable also can hamper them when times are tough.

In case you didn’t notice, there is no single silver bullet when it comes to ensuring success in senior living.

Probably best to focus on finding many good bullets instead.

John O’Connor is editorial director for McKnight’s Senior Living and its sister media brands, McKnight’s Long-Term Care News, which focuses on skilled nursing, and McKnight’s Home Care. Read more of his columns here.

Indianapolis-based Avenue Development aims to provide the full gamut of social and wellness services to active adults, with a rental property slated to open in a St. Louis suburb next October. Monday, the real estate development and advisory company disclosed it has tapped Greystar to manage the Viva Bene active adult residence.

“Viva Bene is our active adult brand. It means ‘live well’ in Italian,” Avenue Development Principal and co-founder Laurie Schultz told the McKnight’s Business Daily. “The whole premise is that we’re combining the social engagement aspects of a traditional active adult community, one that Greystar is typically managing, and we’re augmenting that community with wellness and preventive healthcare services through a primary care partner, Sevi Health. The whole premise is that with an active adult type rental rate, you’re going to be able to get a lot of the same benefits that you would get with a non-active adult type rental.”

This is a first-of-its kind venture for both Avenue Development and Greystar, in that the 161-unit active adult residence will include a health service component with Sevi Health providing concierge-style healthcare services to residents, she said. The active adult community will have a gathering space, co-working niches, outdoor amenities and a wellness hub with fitness and yoga / meditation, as well as an area focused on preventive primary care access.

“The whole premise is that with an active adult type rental rate, that we will be able to hit more of a middle market component by having that affordable active adult rental rate and having that primary care, healthcare services wrapped into that, that the resident gets through Sevi that allows them to age in place and delay a move into a higher-acuity AL setting,” Schultz said.

Viva Bene recently began the pre-marketing process, Schultz said. In the first 60 days of pre-marketing there is an “interest list” of 133 residents, she said. A few of those prospects are in their upper 50s, she said, but most people are in the mid to high 60s.

“So it’s a true active adult demographic. …We’re not hitting an older demographic,” Schultz said. “This can still be done as a traditional active adult demographic and just keep residents healthier longer.”

“We are specifically focused on adults ages 55 and older, because we are interested in individuals who are facing disabilities and difficulties due to conditions related to aging,” Forden said. “We use 55 and older instead of a higher cutoff like 65+ as some other analyses do, because the higher age cutoff ignores an important group of adults who also have difficulties but are not likely to qualify for Medicare or assistance through Medicaid.” 

Forden added that if the needs of this population go unmet, then there is a potential need for greater services as they age. Although those adults may not need nursing home or other care of that nature, they may need some form of day-to-day assistance.

“We wanted to make sure that we were capturing these gaps in addition to folks who might need a more intense level of long-term care as well,” she said.

Single people have a harder time accessing the care they need. According to SCEPA, 60% of adults aged 55 or more years who have a spouse or children receive some form of care, compared with only 42% of those without a spouse or children. 

“Now, this is because eldercare in the US is just so heavily dependent on the often unpaid labor of family caregivers,” Forden said. “In fact, family care is the most common source of eldercare, and in our report, you’ll see that in 2020, over half of adults who needed care got it from an adult child or grandchild, and 44% received care from a spouse. That’s compared to only 23% of adults receiving care from a paid professional.” 

Additionally, the data show that health demographics affect the level of care for those 55+. 

“When we look at professional care specifically, a wealth pattern is very apparent,” Forden said.

The least wealthy and the wealthiest among us are most likely to get taken care of, she said, as higher-income adults are more able to afford professional care, and those with the least means are most likely to qualify for public programs that will subsidize the cost of or outright pay for care.

“And what this means is that policies like Medicaid, community Medicaid, miss those in the middle class who likely still can’t afford the increasingly expensive professional care options on the private market and will otherwise have to depend on family care if they have folks who can provide that care,” Forden observed.

For additional coverage of the SCEPA report, visit McKnight’s Senior Living.

Only 13% of adults aged 75 or more years who are living alone across 97 US metro areas can afford to move into an assisted living community without starting to cash in their assets, according to “Housing America’s Older Adults 2023,” a new report from the Harvard Joint Center for Housing Studies, released Thursday. The calculation considers costs for both long-term care services and supports and housing.

The report authors said that challenges associated with the cost of housing and LTSS will compound in the next decade as the population of adults aged more than 75 years increases exponentially. The cost of long-term care services averages more than $100 per day now, they said.

Citing data from the National Investment Center for Seniors Housing & Care, the JCHS paper stated that 762,000 assisted living units nationwide are home to approximately 623,000 older adults. The median annual cost of assisted living is $63,000, although regional variabilities can put costs anywhere between $43,000 and $98,000. NIC provided principal funding for the report.

Given that subsidies for housing and LTSS reach only a fraction of eligible households with very low incomes, some organizations have found ways to reduce assisted living costs, the authors said. The report pointed to some of those alternatives, including repurposing properties, using philanthropic resources, unbundling services to offer lower-cost options tailored to individuals needs, and partnering with third-party providers to offer transportation, wellness and other services.

Technology also is emerging in assisted living to provide access to healthcare through telehealth and medication reminders, as well as safety features such as those for falls detection and prevention.

During a virtual panel discussion on the report hosted by JCHS on Thursday, several housing and aging experts touched on the growing demand for alternative housing options that include healthcare to address the growing needs of an aging population.

Panelists pointed to the gap between assisted living and public support. The report analyzed households led by adults aged 75 or more years that were unlikely to receive public subsidies but also had insufficient incomes to afford assisted living. Those gap households, on average, could only afford 62% of assisted living costs.

“The combined cost of housing and daily care is beyond the means of most people, including middle-income individuals,” said Jennifer Molinsky, project director of the Harvard JCHS Housing an Aging Society Program.

Bob Kramer, NIC co-founder and current strategic adviser to the organization, said that the increasing population of middle-income older adults who don’t have the resources to afford housing and care options was unknown to many until the NIC-funded “Forgotten Middle” study was published in 2019 in partnership with NORC at the University of Chicago.

That study, published by Health Affairs, projected 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, and a combination of public and private efforts will be needed to address the looming crisis.

“The challenge is getting the long-term care services you need, together with safe and secure housing, is unaffordable to many — not just low-income individuals,” Kramer said, adding that the solution is to innovate and scale. “Options going forward cannot be pitted against each other. We need everything. We need more options for people to choose and afford where they want to live.”

Meghan Rose, LeadingAge California’s general counsel and chief government affairs officer, said that there is “no one solution to ending the housing crisis.” Older adults, she added, deserve options, whether that means aging in place or assisted living or another option. Among the options the panel mentioned were multigenerational housing and co-housing efforts that bring together various generations to act as a supportive community. 

Within senior living, Kramer said, some operators have moved to or are considering using a universal worker approach adopting technology and are encouraging residents to volunteer in various ways to help reduce the costs that communities need to charge. 

“The combination of housing and care is really expensive, and we need innovation and scale, and we need to collaborate on solutions,” he said. 

First published in 2014, the report has been updated several times. This year, JCHS committed to releasing a report every two years. The latest report, available online, also includes data and interactive maps.