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Axios AM Deep Dive: Boomers' elder care crisis

National

Vitals

Axios Vitals

Aging baby boomers in the U.S. are living longer and have better financial safety nets than previous generations. They're also more likely to be divorced, live far away from their children and be living with debt and a chronic condition.

Why it matters: The U.S. is not well-equipped to handle the largest generation of elderly adults in human history, experts say. That's because of an already strained long-term care industry, fewer caregivers to assist with their needs and a world that just isn't designed for them.

The big picture: By 2030, all baby boomers — which the U.S. Census Bureau defines as those born between 1946 and 1964 — will be considered seniors.

The population of people 65 and older is expected to nearly double from 51 million people in 2017 to 95 million by 2060, per the Population Reference Bureau.

"The longer you live, the more opportunity for diseases and disabilities to kind of come up and cause a lot of challenges," said Michael Steinman, a professor at the University of California, San Francisco's Division of Geriatrics.

"Those challenges have major impacts on quality of life, but also major impacts on society and finances."

Between the lines: Changing family dynamics are leading to a growing gap in the number of family caregivers, Mark Mather, associate vice president of U.S. Programs at the Population Reference Bureau, told Axios.

Baby boomers generally had fewer children than their parents did, and their kids are more likely to have moved too far away to help out, Mather said.

Baby boomers are also more likely to be divorced, which means they may not have a partner to care for them.

Or they may have remarried with stepchildren, who studies show are less likely to care for an aging parent than biological children, said Sarah Patterson, a sociologist at the University of Michigan who specializes in demographic shifts in life expectancy.

That is a big problem in the U.S., since family members provide about 95% of the informal care for aging adults who aren't in nursing homes, Mather said.

"Those family members providing that unpaid care are essentially propping up America's health care system," Mather said. "As that shrinks, it's going to create increased demand for more formal types of care. Some people can afford that, and some people can't."

The financial strain is an issue, too. "Unfortunately for retirees today, many of them don't have enough saved for retirement," Angela Antonelli, executive director of the Center for Retirement Initiatives at Georgetown University, told Axios.

They are also more likely to have student debt taken on from children and grandchildren, as well as mortgage debt and credit card debt.

While there is more financial stability from Social Security than previous generations had, people retiring today are much less likely to have a defined pension with attached health benefits when they retire, Antonelli said. 

Those closest to retirement today, on average, only have about $100,000 saved. But even with Medicare, they should expect a minimum of $30,000 to $40,000 in health care costs during retirement. And when you add long-term care costs, the amount they need "suddenly balloons to over $300,000," Antonelli said. 

"It explains why so many Americans depend on friends and family during retirement." 

The other side: The good news is that people are living longer than ever, and there are better medications available to help treat chronic conditions.

The growth of remote work arrangements permits some employees to work later in their lives, which allows them more financial security and social engagement, as well as the ability to move closer to their children.

The pandemic spurred the health care industry to accelerate innovation in telehealth, remote patient monitoring and home care models that allow some patients to live independently in their homes.

But aging in place is still expensive — and the financing hasn't kept up.

The bottom line: "When people need long-term care, where are those beds going to be? If people need in-home care, which is in many ways preferable to being institutionalized, how are we going to pay for that?" Steinman asked. 

"Right now, our health care systems are not well set up to support that kind of care." 

1. Boomers' caregiving crisis

The U.S. is not well-equipped to handle their needs, experts say.

Photo illustration collage of teen girls in the 1950s playing outside, one doing a back bend, in front of an image of a quilt, a prescription pad, and medical red crosses and other graphic shapes.

Photo illustration: Annelise Capossela/Axios. Photo: Genevieve Naylor/Corbis via Getty Images

Deep Dive - Elder Care

Aging baby boomers in the U.S. are living longer and have better financial safety nets than previous generations. They&#x27;re also more likely to be divorced, live far away from their children and be living with debt and a chronic condition.Why it matters: The U.S. is not well-equipped to handle the largest generation of elderly adults in human history, experts say. That&#x27;s because of an already <a class="gtmContentClick" data-vars-link-text="strained long-term care industry" data-vars-click-url="https://www.axios.com/2022/10/04/home-health-nursing-homes-breaks-spending-deal" data-vars-content-id="388cfe15-2b59-46c1-a2b8-0da51abaf4aa" data-vars-headline="Boomers&#x27; caregiving crisis" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/10/04/home-health-nursing-homes-breaks-spending-deal" target="_self">strained long-term care industry</a>, fewer <a class="gtmContentClick" data-vars-link-text="caregivers" data-vars-click-url="https://www.axios.com/2022/10/04/mismatch-between-disabled-caregivers" data-vars-content-id="388cfe15-2b59-46c1-a2b8-0da51abaf4aa" data-vars-headline="Boomers&#x27; caregiving crisis" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/10/04/mismatch-between-disabled-caregivers" target="_self">caregivers</a> to assist with their needs and a world that just isn&#x27;t designed for them.

The U.S. health system faces critical questions about cost, access and equity. Technological advances and new discoveries about diseases like cancer and Alzheimer’s are transforming patient care and reshaping public health.

Health

Data: Pitchbook; Chart: Jared Whalen/Axios

A financial arms race is forming in senior care as private capital pours into the reshaping of elder care. 

Why it matters: The perceived dangers of private equity entering senior care have largely focused on nursing homes, but the truth is, the dollars are flowing elsewhere. 

Reality check: In fact, PE firms are estimated to own just 5% of U.S. nursing homes, per an industry trade group.

"Most of the innovation and new business models that have been developed have been about trying to keep people out of long-term-care facilities," said Devin O'Reilly, managing director at Bain Capital.

The capital is following that innovation.

The big picture: Older Americans are the biggest cost bucket in health care, but care delivery and outcomes are inconsistent. 

"This is a crisis for seniors to get better access to care because it's costing all of us a fortune," Advent International managing director Carmine Petrone said. 

The trend of people living longer, and the extended post-work lifestyle, means that "increasingly, society is understanding that their living situation is also really important to their health care situation," added Welsh, Carson, Anderson & Stowe general partner Sean Traynor.

Between the lines: COVID shed light on the disparities in health care across rural communities and low-income and marginalized populations.

Addressing health inequities is low-hanging fruit for some investors and entrepreneurs, said General Atlantic managing director and global head of health care Robbert Vorhoff.

His firm, alongside Town Hall Ventures, recently invested in Suvida Healthcare, dedicated to Hispanic seniors.

"Where is the most potential to create value? It's finding people that have been least well served by the existing infrastructure."

"We've got to figure out an efficient way to deliver care to rural America," Jeremy Gelber, senior managing director at Centerbridge Partners, said. "On average, America is older and sicker."

Context: Investors are focused on funding care delivery and technology companies that address every facet that can help people live independently and longer. 

In-home and community-based care dominate much of the thinking.

Other large investment pockets are Medicare Advantage primary care, along with various home-based services and technologies ranging from infusion therapy to medication management.

The investment angle is huge, said Meera Mani of Town Hall Ventures. "When you're talking about 50 million people and growing that are over the age of 65, that's multiple segments with multiple needs."

Zoom in: The high utilization of health care among the over-65 population makes for a gold rush that can't be matched elsewhere.

On the Medicare side, there's scale and durability of spending, whereas investing behind sicker members of younger populations is trickier, Vorhoff said.

And ultimately, "those are small dollars compared to the senior dollars," said Gelber. "[Investors] go where the dollars are because if you can manage those dollars better, in a value-based way, you have the opportunity to get paid well for it."

The bottom line: Elder care isn't a one-size-fits-all approach, and neither is the ever-evolving investment opportunity. 

2. Private equity's elder care race

Private capital is pouring into the reshaping of elder care.

A financial arms race is forming in senior care as private capital pours into the reshaping of elder care. Why it matters: The perceived dangers of private equity entering senior care have largely focused on <a class="gtmContentClick" data-vars-link-text="nursing homes" data-vars-click-url="http://newyorker.com/news/dispatch/when-private-equity-takes-over-a-nursing-home" data-vars-content-id="bae67f7c-c00f-46a5-a6cc-65fcd49092c9" data-vars-headline="Private equity&#x27;s elder care race" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://newyorker.com/news/dispatch/when-private-equity-takes-over-a-nursing-home" target="_blank">nursing homes</a>, but the truth is, the dollars are flowing elsewhere.

Limitations middle-income seniors will face by 2033

Data: NORC; Note: The study examined individuals 60 years and older, as they will be 75 or older in 2033. High needs is defined as having three or more chronic conditions and one or more limitations in activities of daily living. Table: Tory Lysik/Axios Visuals

Long-term care will become an increasingly elusive need for aging baby boomers in the next decade, forcing some to spend down their assets in order to qualify for Medicaid.

Why it matters: The population of middle-class seniors in America will increase 89% to 16 million by 2033, according to data from NORC at the University of Chicago.

Most will have chronic conditions and mobility difficulties, and nearly 75% won't be able to afford assisted living without selling their homes, the NORC data shows. 

Medicare doesn't pay for long-term care services, and just 7.5 million Americans had separate long-term care insurance as of Jan. 1, 2020. 

The big picture: Seniors with incomes too high to qualify for Medicaid are caught in a bind, having to either pay out of pocket for extended care or impoverish themselves in order to qualify for the safety net program.

"That's not anyone's best-case scenario," Caroline Pearson, senior vice president at NORC, told Axios. "That doesn't take advantage of their long-term financial assets. It doesn't keep them healthy and in place for as long as possible."

Senior living providers say they can't provide enough affordable options for this demographic without more federal assistance. 

"Frankly, the long-term care system in this country is broken," Beth Martino, senior vice president of public affairs for the American Health Care Association/National Center for Assisted Living, said in an email.

"It requires an entirely different business model and vigorously looking for loans and government programs to keep it going." 

The big question: Pearson and others say it will take a combination of policy fixes to ease the burden on this population.

Policymakers could pare other health care costs by capping Medicare premiums or otherwise lowering copays and other out-of-pocket expenses for older adults, said Tricia Neuman, who directs the Kaiser Family Foundation's program on Medicare policy.

Adding dental, vision and hearing benefits to traditional Medicare — as Democrats unsuccessfully tried this Congress — could also help, Neuman said.

States can also raise or eliminate asset minimums for Medicaid eligibility, and expand the availability of Medicaid home- and community-based services. The Bipartisan Policy Center recommends that lawmakers create a pathway for Medicare beneficiaries to buy into Medicaid home care benefits.

What we're watching: Rep. Thomas Suozzi (D-N.Y.) proposed a long-term care insurance system funded by employer and worker contributions to a federal catastrophic long-term care fund.

Taking catastrophic insurance out of the private market would allow insurance companies to create better, more affordable long-term care insurance products.

But Suozzi is stepping down at the end of the year, and no one else has taken up the cause.

"It takes some bravery," said Ruth Katz, senior vice president of public policy and advocacy policy at LeadingAge, which represents nonprofit aging service providers and is trying to keep the idea alive. "A payroll tax is 'them's fighting words.' And people get really exercised about it, even though it's less than 1%." 

3. Sacrificing for long-term care

They're caught in a bind, forced to pay for extended care or impoverish themselves to qualify for Medicaid.

Long-term care will become an increasingly elusive need for aging baby boomers in the next decade, forcing some to spend down their assets in order to qualify for Medicaid.Why it matters: The population of middle-class seniors in America will increase 89% to 16 million by 2033, according to data from <a class="gtmContentClick" data-vars-link-text="NORC at the University of Chicago" data-vars-click-url="https://www.norc.org/PDFs/Forgotten%20Middle/NORC%20Forgotten%20Middle%202022%20-%20Analysis%20and%20Findings.pdf" data-vars-content-id="1c3ddecf-ed45-427d-ad0d-3bce157f309b" data-vars-headline="Sacrificing for long-term care" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.norc.org/PDFs/Forgotten%20Middle/NORC%20Forgotten%20Middle%202022%20-%20Analysis%20and%20Findings.pdf" target="_blank">NORC at the University of Chicago</a>.

Richmond

Axios Richmond

Older Latinos — especially those who are noncitizens or live in poverty — are often kept from the health care resources advertised to help Americans age comfortably, researchers and advocates told Axios. 

That's partly because of financial and language barriers, and because they're so much more likely to be uninsured. But there's also a cultural responsibility families feel to handle the caregiving themselves, which can mean avoiding the programs that could help them — or not knowing they exist.

Between the lines: High uninsured rates, immigration status, language obstacles and health care costs are part of what's complicating the problem, said Yarissa Reyes, who heads Latino outreach for the Alzheimer's Association.

Then there's cultural stigma, which Reyes told Axios can result in Latinos keeping the caregiving within the family instead of asking for help — even as Latinos are projected to have the steepest increase in Alzheimer's disease in the next 40 years.

"It's almost a badge of honor to say, 'I'm taking care of abuelita' or mom or papi or whoever it is … but you have to understand the toll that it's going to take on the family," Reyes says.

By the numbers: Latino caregivers — of whom it's estimated roughly 75% are women — spend close to half their income each year to look after family members, according to a 2021 AARP study on out-of-pocket caregiver costs. 

Rita Choula, AARP's director of caregiving, told Axios the price tag can create a cycle where Latino caregivers have less savings of their own once they're older, forcing them to rely on younger family members.

The costs can also be emotional and physical, according to a 2021 report from the American Society on Aging, which noted that the cultural commitment could steer Latino caregivers toward neglecting their own health.

Zoom in: The essential industries Latinos work in are less likely to include employer-sponsored retirement plans or private health insurance, leading them to work longer and rely on their adult children as they age instead of nursing homes, said David Hayes-Bautista, UCLA's director of the Center for the Study of Latino Health and Culture.

Plus, while Latinos have a longer life expectancy than most racial or ethnic groups, their health can decline after age 50 due to discrimination and dangerous, low-paying working conditions, according to an April report from the peer-reviewed medical journal BioMed Central Public Health.

Flashback: Congress first imposed a five-year wait for legal permanent residents wanting to access Medicare or Medicaid in 1996. In addition, undocumented immigrants aren't eligible for federal benefits like Social Security, which impacts retirement income.

Yes, but: Even those who qualify for social programs aren't guaranteed to "be in good shape" or know how to navigate the health care system, said Ramon Tallaj, founder of SOMOs Community Care, which serves more than a million Medicaid and Medicare recipients in New York City's immigrant communities.

During the pandemic, the limited health care access meant older Latinos died in their homes because many didn't have the money to access other options, Tallaj told Axios. "Clearly," he said, "the system failed the elderly."

The bottom line: "To the young people, you will be elderly. If we don't make the changes now, you will be in the same position or worse in the future," said Tallaj.

"To the people in power, please. Enough is enough."

4. The challenges of Latinos aging in the U.S.

It's partly due to financial and language barriers, high uninsured rates, and a cultural stigma against asking outsiders for caregiving help.

Photo collage of a photo of a man reading to three children overlaid with a stethoscope.

Photo illustration: Gabriella Turrisi/Axios. Photo: Jack Manning/Three Lions/Hulton Archive/Getty Images

Older Latinos — especially those who are noncitizens or live in poverty — are often kept from the health care resources advertised to help Americans age comfortably, researchers and advocates told Axios. <ul><li>That&#x27;s partly because of financial and language barriers, and because they&#x27;re so much more likely to be uninsured. But there&#x27;s also a cultural responsibility families feel to handle the caregiving themselves, which can mean avoiding the programs that could help them — or not knowing they exist.</li></ul>

More than a year after one of the most controversial drug approvals in FDA history, seniors and their loved ones may be on the cusp of having a new drug on the market that slows the progression of Alzheimer's disease.

Why it matters: Seniors desperate for relief from the debilitating disease were the real losers in the debacle over Biogen's Alzheimer's drug — which was approved through a fast-tracked process over the objection of prominent scientists.

Now, many — including scientists — are placing more faith in a drug from Eisai and Biogen, though experts warn it's important to keep pursuing a broad array of treatment approaches.

Driving the news: Of the billions of dollars spent on Alzheimer's treatment research, the largest focus has been on targeting brain amyloid plaques under the theory that they're major contributors to the disease.

That research got a boost in September when Eisai and Biogen announced positive clinical trial results for lecanemab, an anti-amyloid drug.

Yes, but: Skepticism over anti-amyloid therapies still lingers after last year's approval of Biogen's drug Aduhelm, which also targets amyloid plaques but was highly criticized as having poorly executed clinical trials.

Medicare subsequently opted to severely limit coverage of the treatment, despite the drug's FDA approval. 

5. A roller coaster journey in search for Alzheimer's treatments

Recent data suggests an effective drug may be around the corner after a tumultuous year.

More than a year after one of the most controversial drug approvals in FDA history, seniors and their loved ones may be on the cusp of having a new drug on the market that slows the progression of Alzheimer&#x27;s disease.Why it matters: Seniors desperate for relief from the debilitating disease were the real losers in the debacle over <a class="gtmContentClick" data-vars-link-text="Biogen&#x27;s Alzheimer&#x27;s drug" data-vars-click-url="https://www.axios.com/2021/06/07/fda-alzheimers-drug-biogen" data-vars-content-id="b62dc097-503f-4cfb-842e-e528ca040f0c" data-vars-headline="A roller coaster journey in search for Alzheimer&#x27;s treatments" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2021/06/07/fda-alzheimers-drug-biogen" target="_self">Biogen&#x27;s Alzheimer&#x27;s drug</a> — which was approved through a fast-tracked process over the objection of prominent scientists.