By Steve Moran 

A skeptic’s point of view …

A couple of weeks ago, while at the NIC 2022 fall conference, I had a chance to chat with Caroline Pearson, who is with NORC at the University of Chicago. She led the middle market study and the recently released middle market update.

We also talked (most of the conversation) about the recently released study, titled (Understanding the Health Needs and Spending of Senior Housing Residents), which I found to be a lot more interesting. It will be discussed in a separate article.


In 2019, NIC (National Investment Center for Seniors Housing and Care) and NORC released the original middle market study, titled The Forgotten Middle, with the goal of forecasting the “size, demographics, health needs and financial resources of middle-income seniors ages 75 and older.” It was based on data from the 2014 Health and Retirement Survey.

It is generally assumed, and rightly so, that some portion of older Americans (age 75+) will be stuck in the middle, meaning they won’t have enough financial resources to live in the current senior living product but will have too many assets to qualify for government assistance. The big question the original study was looking at is how big is the problem.

I wrote about the original study here: “The Forgotten Middle — Senior Living Affordability Study — Slicing and Dicing.”

Updated Study

This year, 2022, the study was updated with funding from the SCAN Foundation. It used more recent data (2018) and looked at individuals who will be age 75+ in 2033, which means a bigger proportion are baby boomers.

The study summary lists these highlights:

  • Over the next decade, the number of middle-market-income seniors (75+) will almost double — reaching 16 million.
  • They will be more racially and ethnically diverse, including 22% who are people of color.
  • Many seniors will have health needs, which include mobility limitations and cognitive impairments, that will make it hard to live independently.
  • Middle-income seniors will likely be more reliant on paid caregivers because many will not have children living nearby.
  • Without selling their homes, three-quarters of middle-market-income seniors (11.5 million) will have insufficient resources to pay for private assisted living.
  • Even with home equity, six million (39%) middle-income seniors will not be able to pay for assisted living.

The Skeptic’s (That’s me, Steve Moran’s) Point of View

First, as Caroline points out, the data is the data, and it is ultimately up to the user to determine what it means. Second, there clearly is a middle-income problem or opportunity, depending on how you approach the data.

Here is why I believe it is easy to conclude the problem is bigger than it really is:

  • It does not take into account geographical differences. In other words, there are some states and some regions where senior living is much more affordable than others. The difference is huge, meaning the most expensive markets can be three, four, or eight times as expensive as the lowest-cost senior living communities. There are nice assisted living and independent living communities that a couple with maximum social security could live in today and still have money left over.
  • It does not take into account that frequently families will step in to cover the financial gap of their loved ones so they can have a nice lifestyle.
  • It does not factor in the Medicaid waiver programs.
  • There are a substantial number of middle-income seniors who are currently living someplace.
  • It does not factor in the small, residential model assisted living, which, in some states, like California, meets the needs of a substantial number of middle-income seniors.

Additional Observations From Caroline

I love talking to people who geek out on numbers and can translate them into something that is understandable and usable, and that is Caroline. Here are some of the highlights from our conversation about the middle market study.

  • This study presents the data, and it is up to the industry and others to decide what it means and what to do with the information. The goal of the study was to start a discussion, and the study has been wildly successful in doing that.
  • We know the problem is real — that there are older people who are living in nursing homes, not because they need that level of care, but because they have no financial resources to live in assisted living, and that this is a national tragedy.
  • They are currently working on a California-specific study that will provide additional insights by taking geography into consideration.
  • Of the 16 million people who are 75+, only a relatively small portion will need senior living, and not all those will choose senior living even if they would benefit from it.
  • While there were a lot of people clamoring for an update, this study ultimately said the same thing as the previous one: There is a big unmet need.
  • At the end of the day, in 2033, there will be roughly 16 million middle-income seniors, and 71% of them have fewer than $65,000 in financial resources.
  • The financial projections are based on historical trends, and no one believes we are headed into a period that is going to look like the last 10 or 15 years.

 Different Scenarios

It is worth thinking about some different scenarios:

  • If we assume the economy does less well, what might that mean?
  • We know that on the bright side there will likely be fewer seniors who are in deep deep poverty, which means there will be a shift, but it is not clear exactly what that will look like.
  • What does the current labor shortage mean to senior living, particularly given that right now, the labor problem appears to be on a trajectory to worsen rather than improve?
  • As much as many in the industry dislike it, we need to think of ourselves as part of the health care system. This, then, leads to thinking more about how we keep people out of the emergency room and out of nursing homes.
  • Ultimately, the study shows there are a lot of middle-income seniors who are not moving into senior living, because they can’t afford it.

Leave your comments below about how you see the middle market challenge opportunity.