How Nursing Homes Fit Into the Expensive Housing Dilemma for Aging Adults

The costs of long-term care in every setting, including nursing homes, is considered out of reach for most seniors, averaging more than $100 per day nationwide. This is coupled with the fact that the majority of older adults with very low incomes will need such services and have the fewest resources to pay for them.

That’s according to a report published on Thursday by the Joint Center for Housing Studies of Harvard University, which largely focused on housing options for older adults.

Robert Kramer, co-founder and strategic advisor for the National Investment Center for Seniors Housing & Care (NIC) and panelist on the webinar, expanded on this sentiment, adding that there is a large group of seniors that don’t qualify for government support, but can’t afford most other options out there that are more on the private pay end.

“This report educates and informs the fact that wherever you want (to receive care), that combination of housing and care is really expensive … we need to collaborate on solutions,” he said.

As of 2021, only 2.5% or 1.4 million older adults lived in group quarters like a nursing home, according to the report, while an overwhelming 97.5% lived either in their own home or the home of someone else.

Moving forward, Kramer said long-term care providers and government entities must innovate and scale care offerings and settings to bridge the gap.

“The options going forward cannot be pitted, one against another. We need everything,” said Kramer. “We need more options for people to choose and that people can afford – whether they want to stay home or whether they want to move into different settings.”

Meghan Rose, general counsel and chief government affairs officer with LeadingAge CA spoke briefly on providing dual-eligible beneficiaries with a “full array of wraparound services” to really address the gap between Medicare and Medi-Cal (California’s Medicaid program) coverage.

All dually-eligible patients are being moved into managed care through a capitated rate model, which services to incentivize insurance plans to be more innovative while keeping costs down.

The alternatives have included premature admission to a nursing home or delaying care, driving up health care costs and typically resulting in worse health outcomes, said Rose.

The state also announced a plan which may help those transitioning out of an institutional setting like a nursing home and are either experiencing homelessness or risk of homelessness, Rose said.

Up to six months of transitional rent services may be available for eligible beneficiaries, she said.

“Our focus will really be on trying to prove the cost benefit of providing these services to the managed care organizations so they’ll want to offer them to their plan participants,” said Rose.