When it comes to needing long-term care, millions of middle-income older adults are trapped. They have too much money to qualify for Medicaid’s safety net. Yet, they cannot afford to pay out-of-pocket for significant long-term services and supports. So, they often suffer from avoidable injuries or illness or even die prematurely without the help they need.

Now, policy analysts are beginning to think about those middle-income seniors, sometimes called the Forgotten Middle, or, in a new project, the Overlooked Middle. This  growing interest produced a valuable new report that helps define this group and proposes some potential ways to address their unmet needs in old age.

Getting New Attention

The project, led by Marc Cohen of the LeadingAge LTSS Center at the University of Massachusetts Boston and consultant Gretchen Alkema of Wolf Eagle Enterprises, focuses on California. But its findings apply to every state and community in the US, even if some specific demographics inevitably will differ.

Today, most of the policy focus on long-term care needs is, rightly, on supporting low-income older adults and younger people with disabilities. They are under enormous pressure from the Trump Administration’s cuts to Medicaid and other programs.

But the needs of middle-income households are getting new attention as well, both from researchers and the senior services market. This new report, with the unwieldly title Evaluating the Needs, Preferences, and Potential Avenues of Care Support for California’s Overlooked Middle is the newest, and perhaps most detailed, entry in this effort.

Who Is Middle-Income?

First, it takes a stab at defining who this population is. For most of us, if you are not poor and not rich, you are middle-income. But nobody really knows what that means, and the first step towards fixing a problem is defining it.

The California study focuses on those aged 50 and older with incomes between 139% and 500% of the Federal Poverty Level. For single adults, that translates to between about $21,000 and $75,000. For married couples, it ranges from $28,000 to $102,000,

In California alone, that’s 5.5 million people aged 50 and older and 1.2 million aged 75 and older, the age at which people are likely to begin to need long-term services and supports. By 2050, those numbers will grow to 6.9 million aged 50 and older and 2.3 million for those 75+. Those the study defines as middle income represent about 40% of all Californians who need long-term care.

Are these numbers right? Some would say the authors should have included assets as well as income when defining the middle. Others might argue the bottom end of the middle-income scale should be raised, since those at 139% of poverty will inevitably become Medicaid eligible soon after needing long-term care. Or that policymakers should not worry about couples with as much as $102,000 in annual income.

Yet, the authors didn’t pick their definition out of a hat. They based it on three factors: People living in their communities who:

  • Can afford basic living needs such as food, housing, medical care, and transportation; as long as they don’t need personal supports.
  • Would have to meaningfully reduce that spending if they need a “moderate amount” of paid home-based care.
  • Do not qualify for Medicaid before or directly after they begin to need long-term care.

Big Differences

As this project shows, middle-income older adults are by no means a homogeneous group. Rather, there are big differences in needs and perspectives. Those at the low-end of the income scale, who would soon qualify for Medicaid if they need long-term care, face very different circumstances than those at the higher end, who likely will burn through their assets but die before qualifying for Medicaid.  Similarly, those with pre-existing medical conditions see a different world than those who are relatively healthy.

A big variable: Homeowners are in a very different situation than renters. For context, about three-quarters of middle-income Californians age 75 or older own a home, though 40% still carry some mortgage debt.

While they may have different perspectives, they also share many goals and, sadly, many misconceptions and unrealistic hopes for their care in old age.

The Gap Between Needs And Availability

And that is the second critical insight of this study: The gap between what this population wants and what the system provides is massive.

For example, middle-income older adults want to maintain independence for as long as possible, no matter where they fall within this group. Two-thirds say they want to stay in their own homes as they age.

Many want to preserve wealth so they can leave bequests to children. Those with a substantial amount of home equity are reluctant to use it to pay for long-term care.

At the same time, 85% worry about having enough money to pay for their own care. And only one-in-five feel they have saved for their long-term care in old age. Yet, they want to control where and how they get care.

As with many prior surveys, few in this group have a realistic sense of what long-term care will cost and many believe Medicare will pay for it, though it generally does not. And when asked about their favored policy solutions, 66% prefer expanding Medicare, four times more than the next most popular choice, expanding access to Medicaid.

Not surprisingly, those with higher incomes worry most about failures in the system of delivering long-term care while those with lower incomes worry more about having the resources they need to pay for care.

Many, wisely, said they want better connections between medical care and long-term care. And they described challenges navigating the care system.

This project did the important work of laying down a marker of what we mean when we talk about middle-income older adults. People may dispute their definition, but they’ve begun an important conversation.

And by describing the goals and challenges of this population, the project has helped advance the debate over how to fill in the financial and care gaps middle-income seniors face.

Yet, it did more, It also proposed some creative solutions to the special challenges of middle-income seniors. In my next column, I’ll take a look at some of these ideas.