Takeaways
- A significant majority of older adults (nearly 70 percent) will require some form of long-term care, but many struggle to afford these services after covering housing costs, creating a “dual burden.”
- There are significant disparities in affordability of long-term care services across different demographics, with renters and households of color being less able to afford care compared with homeowners and white households.
- The struggle to afford housing and long-term care is driven by rising housing costs, high costs of long-term care services, limited insurance coverage, increasing care needs with age, and persistent wealth inequality among older adults.
After many years of handling daily tasks, such as bathing, dressing, and cooking, we tend to take for granted that we can do these tasks without help. However, as we age, many of us will need help with some of these tasks, as well as other daily activities. In fact, nearly 70 percent of people age 65 and older will develop difficulty performing certain daily tasks, requiring some form of long-term care support in their remaining years.
According to a recently released paper from Harvard University’s Joint Center for Housing Studies (JCHS) titled Older Adults Struggle to Meet the Dual Burden of Housing and Care, many older adults will have trouble paying for these long‑term care services, particularly after covering their housing costs. This struggle to afford the costs of both housing and long-term care services creates the dual burden cited in the title of the paper.
Long-Term Care Services
Long-term care (LTC) services can include assistance with activities of daily living (ADLs) such as bathing and dressing and help with medical-related tasks, such as managing complex daily health care regimens. Older adults may also use LTC services for housekeeping tasks, such as doing laundry, cooking, and shopping. LTC services are often essential for many older adults who want to continue living independently by delaying or avoiding institutionalization in a nursing home.
Paid professionals or unpaid family members or friends may provide LTC services for seniors, with most older adults relying heavily, or exclusively, on unpaid support. The JCHS paper states that less than half of adults receive paid care. In fact, family members and friends provide 70 percent of all care given to people who have significant needs.
Although some people need LTC services only for a short time, such as when recovering from an injury or illness, many older adults rely on them for an average of three years, with 20 percent needing them for more than five years.
Core Findings of the Study
The JCHS found that in single or partnered households with at least one person aged 75 or older, just 24 percent were able to pay for a single daily visit from a paid home health aide after paying for housing and basic living costs. Only about 63 percent of households can afford basic housing and living costs without the additional cost of LTC services.
The study found a discrepancy between homeowners and renters. Less than 9 percent of older adults who rent their homes can afford the costs of housing, basic expenses, and paid daily care compared with 30 percent of those who own their homes.
There is also a disparity among different races. The paper reports that only 14 percent of Black households and 11 percent of Hispanic households are able to afford LTC services while 26 percent of white households can.
Reasons Why Older Adults Struggle With Costs
Older adults are struggling to meet the costs of housing and long-term care for several reasons.
Rising Housing Costs
In 2021, nearly 11.2 million older adults spent more than 30 percent of their income on housing, the highest amount ever. This is about a third of older households. This issue of affordability is expected to grow as the number of households headed by a person aged 80 or older more than doubles between 2021 and 2040.
High Costs of Long-Term Care
The study found that in 2021 the annual cost of a daily care visit of four hours was just under $41,000. The annual median cost in 2024, according to Genworth, was up to about $48,000. The annual median cost of living in an assisted living community was about $70,800 and a private room in a nursing home was nearly $128,000. With these costs tacked onto ever-increasing living costs, it is little wonder why so many seniors struggle to make ends meet.
Limited Insurance and Financial Safety Nets
Most medical insurance plans, including Medicare, don’t cover most LTC needs and relatively few older adults have private long-term care insurance. Medicaid home- and community-based services (HCBS) exist but aren’t universally available and have limited capacity.
Growing Care Needs With Age
Nearly 70 percent of adults who reach age 65 will need LTC services for an average of three years. Functional difficulties, such as mobility and self-care issues, increase dramatically for those who are over 80, making independent living more difficult.
Persistent Wealth Inequality
Per one report, the median renter aged 65 and over in 2022 had a net worth of $10,100, which was just 2 percent of the wealth of the median of similarly aged homeowners. The median net worth of same-age renters of color was less, at $3,900 for Black households and $3,000 for Hispanic households.
Among homeowners, equity disparities also exist, for example, Black homeowners had the lowest median equity in 2022, with an average of $123,000, compared with $251,000 for white households, $200,000 for Hispanic households, and $270,000 for older Asian, multiracial, or other races.
Why This Matters
When older households can’t afford adequate care, unpaid family caregivers — often themselves older or working — bear substantial financial and emotional burdens. Many older adults must choose between staying in their homes and maintaining independence but possibly sacrificing care and well-being or living in an institutionalized setting, such as a nursing home.
There is no easy way to ease the high costs of both housing and long-term care, especially as costs rise for both. This is especially true when funding for federal programs is uncertain. Fully funding Medicaid HCBS waivers would help older adults with the greatest affordability needs. Millions more would greatly benefit if Medicare covered LTC services.
Addressing housing needs would also help older adults stay in their homes longer. This could be done by expanding rental subsidies as well as providing home repair and modification assistance that would ensure seniors’ homes are suitable, safe, and comfortable.
Additional Resources
The JCHS paper draws attention to a concern that affects more older adults and their families each year. Renters, households of color, individuals with functional limitations, and those in low-density or high-cost areas face the greatest pressure.
Concerted policy action, such as expanding subsidies, unlocking home equity, rebuilding housing infrastructure, and innovating care delivery, can help America’s aging population live with dignity, security, and independence.
For additional reading about long-term care planning, check out the following articles:
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