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Older adults are struggling to meet cost-of-living expenses in the nation’s 100 largest metropolitan areas, according to a new report from UMass Boston’s Gerontology Institute. But federal, state and local entities can play an important role in removing barriers to a secure retirement, the authors say.

The Biden administration’s American Jobs Plan, which would allocate $400 billion in spending on home- and community-based care, will not help middle-income older adults as written, however, Nexus Insights founder Bob Kramer told McKnight’s Senior Living.

“There is nothing for them there right now,” he said. “Even all the HCBS dollars the Biden administration proposed, none of that goes to address this group. They’re in a situation where they’re liable to be spending down to qualify for Medicaid fairly soon.”

Some assisted living operators provide HCBS to residents through Medicaid waivers. Qualifying for Medicaid, however, means that older adults must spend down their assets, noted Kramer, the co-founder, strategic adviser and former CEO of the National Investment Center for Seniors Housing & Care. Along the way, many older adults forgo prescriptions, physician visits or medical tests to save money, so by the time they qualify, they often are sicker and unhealthier and have far greater needs than can be addressed through HCBS, he said.

“The issue then becomes, could we do interventions where we provide funding to people who are close to, but haven’t yet qualified for, Medicaid so we give them the supports and services they need in the community to keep them healthier longer, rather than forcing them to spend down to poverty?” he said. “Right now, they have no place to go. There are no services for them.”

Older adults who qualify for Medicaid and those who can afford private-pay market rates for housing, including senior living communities, have options, Kramer said, adding that developers and providers also are ramping up efforts to create value-based products for the middle market, the need for which was highlighted in a NIC-funded study published in 2019 in Health Affairs.

The lower third or half of the “forgotten middle” lags in supports, Kramer said, noting that that income cohort is going to explode in growth as baby boomers age into a need for long-term care.

83% in metro areas

According to the Elder Index, a free online resource developed by the UMass Boston’s Gerontology Institute, 83% of the population aged 65 or more years lives in metropolitan areas. 

The researchers found a wide variation in elder economic insecurity levels among older adults and couples living in large metropolitan statistical areas. The report  —  “Aging in the 100 Largest Metropolitan Areas: How Do Older Adults Fare?” — is the first of its kind to document risks that are far greater in some metro areas than others, according to the authors.

The highest rate of economic insecurity among older adults was found in the McAllen, Edinburg and Mission, TX, metro area, where 67% of older adults did not have enough income to meet local expenses.

In contrast, the lowest rate of elder economic insecurity was in Madison, WI, where 37% of older adults could not meet local expenses.

The authors noted that older adults living in areas where they lack sufficient financial resources to cover necessary expenses “must make difficult choices to make ends meet, often facing great uncertainty with respect to their ability to maintain stable housing, secure needed healthcare or maintain a nutritious diet.”

According to the report, nationwide, about half of singles and one-quarter of couples have incomes that fall below the Elder Index. 

Stabilizing financial circumstances in later life, the UMass report said, requires public education and policy interventions. Many older adults, however, may have debilitating health conditions or face age discriination, creating barriers to working longer and maintaining higher income levels, the authors said. 

Federal programs, including Social Security and Medicare, the report said, play an essential role in supporting a secure retirement, whereas state programs that safeguard the affordability of medical care, access to services and supports, and availability of lower-cost housing must consider the cost of living when determining eligibility. Locally, according to the report, decisions about property tax waivers and deferrals, affordable senior housing, and programs to assist older adults in applying for state and federal programs are necessary. 

“Embracing opportunities to do so where they exist, and leveraging collaborations toward improving economic security, are valued goals in support of the millions of older Americans living in metropolitan areas throughout the U.S.,” the authors concluded.