As the U.S. population ages, many families are facing long-term care (LTC) issues. Most families either pay for it out of their savings or spend down these savings until they qualify for Medicaid.
But there’s a group stuck between the two — those who are too “rich” for Medicaid benefits but not wealthy enough to afford 24/7 in-home care.
According to a recent report from Time, about two-thirds of caregiving hours for older adults in the U.S. are provided by informal and unpaid caregivers.
David Grabowski, a Harvard Medical School professor who authored a 2019 study about middle-income seniors, told the publication that many seniors will have insufficient resources for housing and health care needs.
By 2033, researchers at the University of Chicago estimate there will be 16 million middle-income seniors who can’t afford to pay for the health, personal care and housing services they need.
Nursing home costs, according to a 2021 study, are estimated at $100,740 a year for a semi-private room, with in-home care on weekdays costing $42,120.
The giant Medicaid cuts in President Donald Trump‘s “Big Beautiful Bill” are likely to exacerbate the situation. Home- and community-based care for low-income seniors is considered an optional program in Medicaid, meaning that states can cut it when their budgets are tight.
The report cited various solutions to the long-term health care issue, such as looking into long-term care insurance and consulting an elder attorney. It did not, however, suggest a reverse mortgage, which is expected to be a key tool for seniors whose health care costs exceed their income.
The reverse mortgage industry has aimed in recent years to position itself as a potential avenue to fund LTC directly or pay for LTC insurance. But a reverse mortgage through a lump sum or a regular fixed monthly payment could disqualify borrowers from Medicaid eligibility, and an elder care attorney should be consulted.
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