This article highlights the challenges faced by middle-income seniors, who earn too much for Medicaid but not enough for high-end senior living.
Recent research by the National Opinion Research Center (NORC) at the University of Chicago has spotlighted a critical yet often overlooked demographic in senior living: the "Forgotten Middle." This term refers to seniors who earn too much to qualify for Medicaid but not enough to afford high-end senior living options. The research, published originally in 2019 and updated in 2022, provides valuable insights into the challenges and potential solutions for this growing population.
NORC's findings reveal a stark reality. By 2033, the number of middle-income seniors will nearly double to 15.9 million, up from the previously projected 14.4 million by 2029. These individuals typically have annual incomes between $25,000 and $74,000. Despite owning homes and having some retirement savings, they often cannot cover the high costs of traditional senior living communities, ranging from $3,000 to $7,000 per month.
A key issue the research highlights is the insufficiency of financial resources among middle-market seniors. By 2033, nearly three-quarters of these seniors will have less than $65,000 in income and annuitized assets, insufficient to cover both private assisted living costs and medical care. Even considering home equity, which constitutes a significant part of their financial resources, 39% of middle-income seniors will still be unable to afford assisted living.
Senior living operators and others in the senior care space must think creatively to identify strategies that balance affordability with housing, social, care, and wellness options for middle-market seniors. Here are several approaches that may be considered:
Innovative strategies can help senior living operators provide affordable housing and care models for middle-market seniors. The Milken Institute’s Financial Innovations Lab® and Center for the Future of Aging Research shared potential financing and scaling solutions that operators and investors should consider.
In summary, the "Forgotten Middle" study represents a significant and growing challenge in the senior living sector. The NORC's updated research highlights the urgent need for affordable, high-quality housing and care options for this underserved demographic. Doing so is not only a mission imperative but also a strategic business decision that can lead to market growth, enhanced reputation, regulatory incentives, and long-term sustainability. As the senior population continues to grow, addressing the needs of the middle market will be crucial in ensuring that all older adults can age with dignity and grace.
1. NORC at the University of Chicago. (2022). The Forgotten Middle in 2033: An Analysis of Middle-Income Seniors and the Ability to Afford Housing and Health Care. Retrieved from https://www.norc.org/content/dam/norc-org/documents/standard-projects-pdf/NORC%20Forgotten%20Middle%202022%20-%20Analysis%20and%20Findings.pdf
2. Montgomery, A. (2022, August 31). Newly Updated ‘Forgotten Middle’ Study Shows Middle-Market Senior Living Gap Getting Wider. Senior Housing News. Retrieved from https://seniorhousingnews.com/2022/08/31/newly-updated-forgotten-middle-study-shows-middle-market-senior-living-gap-getting-wider/.
3. ElderLawAnswers. (2024). The Forgotten Middle: Seniors Facing Housing, Care Crisis. Retrieved from https://www.elderlawanswers.com/the-forgotten-middle-seniors-facing-housing-care-crisis-18613.
4. National Investment Center for Seniors Housing & Care (NIC). (n.d.). Supporting Middle Market Senior Housing: Four Financing Solutions. Retrieved from https://content.nic.org/supporting_middle_market.
NIC: https://www.nic.org/middlemarket
NIC-Sponsored Milken Institute Research: https://content.nic.org/supporting_middle_market
Episode 105 of Senior Living Visionaries: Middle Market Housing Strategies with Jon Fletcher
Episode 119 of Senior Living Visionaries: Current Trends in Senior Living with Lisa McCracken
Learn more about Middle Market opportunities and other ways to increase profitability in our white paper “13 Secrets to Increase Profitability in Senior Living in 2024.” Download it here:
Feeling like your organization is stuck in a rut, having the same old discussions? It might be time to consider implementing board term limits in your bylaws. In this episode, I discuss the significance of term limits and having a regular board member assessment process for nonprofit board members. Don't miss this episode where I cover:
👉The critical role of governance in nonprofit organizations
👉The advantages and challenges of implementing term limits for board members
👉Strategies to address common concerns about term limits
👉Establishing a regular board member assessment process
Listen to episode 124 of Senior Living Visionaries on your favorite podcast platform or listen/watch here. Be sure to subscribe to be notified when a new episode drops!
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👉The origin of CLC's Citizenship model
👉Jill's personal experience that led her to focus on combating ageism and traditional views of senior living
👉How community culture influences various aspects of an organization, including higher occupancy rates, improved staff retention, and better regulatory outcomes
👉Strategies that senior living communities can implement to actively combat the effects of ageism within their operations and interactions with residents
👉How CLC empowers residents to take an active role in shaping their community through programs
Listen to episode 123 of Senior Living Visionaries on your favorite podcast platform or listen/watch here. Be sure to subscribe to be notified when a new episode drops!