Pandemic Heightens Need for Middle-Market Housing

Care collaboration offers solution for the ‘Forgotten Middle.’

Collaboration among various stakeholders will likely play a significant role in securing affordable housing and appropriate care for middle-income seniors—a big group expected to increase in size in the wake of the COVID-19 pandemic.

Medicare Advantage plans, adaptive re-use of commercial properties and telehealth are some of the vehicles that could be leveraged to create new approaches to house and care for middle-income seniors.

“Our nation’s middle-market seniors need a sustainable housing solution that addresses their projected health and wealth characteristics,” said NIC Chief Economist Beth Mace. “Given the COVID-19 pandemic, the need is only going to get bigger.”

NIC first identified the growing number of vulnerable middle-income seniors last year in its report, “The Forgotten Middle: Middle Market Seniors Housing Study.” It showed that 54% of seniors cannot afford today’s senior housing product—based on a monthly cost of $4,500—and do not qualify for assistance under the Medicaid program. By 2029, 14 million seniors will fall into that category.

That number will likely grow because of the pandemic and its economic fallout.

Seniors whose savings are depleted by the economic downturn will likely join the middle-income ranks of those who can’t afford the housing and care they need. And more of today’s middle-income could fall into the low-income category of elders who rely on Medicaid, stretching an already overburdened system.

Added to that, consumer confidence will take a hit, said Mace. A rocky stock market and big job losses create uncertainty which can impact decisions to move into seniors housing.

The problem of how to house the rising number of middle-income seniors, many with functional limitations, will be solved in part by an increase in care collaboration.

New approaches were discussed at the NIC Spring Conference during a session titled, “Planning for the Care Needs of the Forgotten Middle.”

Much of the discussion focused on how to integrate healthcare into housing.

“The middle market is where health and housing intersect,” noted Caroline Pearson, senior vice president at NORC, at the University of Chicago. She is co-author of the original ‘Forgotten Middle’ study.

Medicare Advantage insurance plans could help, session participants agreed. These plans, held by a growing number of seniors, are beginning to offer wraparound services such as payments for food, assistance with the activities of daily living and on-site healthcare.

Some senior living providers are forming their own Medicare Advantage plans while others are aligning with healthcare providers.

The big healthcare REIT Welltower, for example, formed a partnership with CareMore Health, a division of Anthem insurance. CareMore enrolls residents in Medicare Advantage plans. They are treated on-site by CareMore healthcare professionals.

“Senior living should be the convener of healthcare,” said session participant Kevin O’Neil, chief medical officer at Affinity Living Group. He added that on-site healthcare can help avoid costly emergency room visits. It’s easier on the resident too.

Working with local health systems is a priority, session participants agreed. But managed care organizations will only partner with senior living providers that can track outcomes, said Diane Burfeindt, vice president of population health at Presbyterian Senior Living. “Data is huge.”

Panelists presented other ideas to lower costs for middle-income seniors. Unused properties, such as vacant schools, could be converted into senior living properties. The low-cost basis of the property would help keep rents in check.

Government programs such as low-income housing tax credits and the rental of ground floor space to retailers are other cost-saving ideas. “It will take a multi-industry mindset,” said James Lydiard, general manager of CareMore’s Touch program for senior living communities.

Technology will help lower costs. Senior living providers are already stepping up their use of telehealth in the wake of the pandemic. Timely, virtual doctor visits will help maintain the health of middle-income seniors at an economical price. “Telehealth is the way to go to reduce the cost curve for the middle market,” said Mace.