- April 1, 2021: Vol. 8, Number 4

Keep me at home: A worrisome trend for senior housing investors

by the Center for Retirement Research

Even as the share of U.S. population over age 65 has grown steadily since the 1980s, the share of low-income seniors living in nursing homes has declined sharply.

That’s the conclusion from a new research study from the University of Wisconsin, which found the trend, to some extent, is being driven by an increasingly diverse population of Hispanic, black, Asian and Native American people, who are more likely to live with an adult child or other caregiver than non-Hispanic whites. In short, they have cultural preferences for multigenerational households.

The study, conducted by associate professor of economics Mary Hamman, found that nursing home residence is also declining among older white Americans. However, in contrast to the black population, whites are increasingly moving into assisted-living facilities. This creates what Hamman called a “potentially troubling pattern” of differences in living arrangements that might reflect disparities in access to assisted-living care or perhaps discriminatory practices. Notably, the researcher finds the black/white gap in assisted-living use persists even when she limits her analysis to higher-income adults.

Eight states have seen the biggest drops in nursing home use: Florida, Georgia, Louisiana, New Jersey, New Mexico, North Carolina, South Carolina and Tennessee. Many of these states have experienced fast growth in their minority populations or have more generous state allocations of Medicaid funds for long-term care services delivered in the home.

Growing diversity is actually the second-biggest reason for lower nursing home residence, accounting for one-fifth of the decline, according to the study, which was funded by the U.S. Social Security Administration and is based on U.S. Census data.

As one might expect, the lion’s share of the decline (about two-thirds) is due to policy, specifically changes to Medicaid designed to encourage the home care that surveys show the elderly usually prefer.

In 1983, the federal government began issuing waivers to states, allowing them to pay for home care. In 2010, the Affordable Care Act gave states even more leeway to promote in-home and adult foster care arrangements. Today, more than half of Medicaid’s long-term care budget supports home care and related services in the community. In 1995, the vast majority of this budget paid for institutional care instead.

Given the dramatic shift in long-term care arrangements, the researcher is concerned about the growing physical, emotional and financial burdens on family caregivers, suggesting a need for “expanded programs and policies to support” them.


This article was excerpted from a blog post published by The Center for Retirement Research at Boston College. Read the original article at this link: Read the study authored by Mary Hamman at this link:

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