New Analysis Shows How Unaffordable Home Care Is Becoming For American Seniors

Most Americans will need some sort of in-home care support as they age. The issue is that many of them cannot afford it.

To age in place, seniors either need to be completely independent or have some sort of personal care afforded to them. If they qualify for Medicaid, home- and community-based services are an option. But waitlists for HCBS in some states can be quite long.

Medicare covers home health care, but not personal care, which generally helps seniors deal with activities of daily living. Seniors not supported by Medicaid or Veterans Affairs (VA) are left to pay out of pocket for services.


Only 14% of American seniors can afford to do so, however, according to a new analysis conducted by the Joint Center for Housing Studies of Harvard University. In some markets, an even smaller percentage of seniors can afford home care.

Worse yet, more than 40% of Americans 65 years and older live alone. An even larger percentage of Americans live alone once they pass 80 years old.

The percentage of Americans that can afford personal care has undoubtedly shrunk over the course of the last few years. It’s a massive problem for seniors, but it’s also a problem for providers. They’ve had to grapple with billing rates rising by anywhere from 20%-40% since 2021, which generally gets passed onto clients.


“The reality is that two times that bill rate is too expensive for probably 95% of Americans, or American families. Yet the need for the service that we provide is universal,” Arosa CEO Ari Medoff told Home Health Care News in June. “So 100% of the population needs what it is that we offer, and maybe 5% or 10% can afford to pay out of pocket. Maybe 10% or 20% are qualified and eligible for Medicaid services. That means that a vast majority – 75% to 85% of American families – are just struggling to provide that support that their loved one needs as they age, and that is where we see people go into assisted living or going into nursing facilities when that’s not their preferred place to age.”

Some home care providers have responded by getting more into Medicaid.

Medoff and others have also suggested that the traditional home care business model may need some tweaking.

What needs to be balanced is quality caregiver pay – which is paramount for retaining workers – and client billing rates. 

“If I have like 60, 70, 80 core clients that want to age in place for a long time, I’m looking at those clients, and I’m looking at those caregivers, and the average length of stay,” Hillendale Home Care CEO Jesse Walters recently said. “Historically, for us, it’s been like six to eight months. And it’s 50% margin. But what if in the future, it’s 18 months, 24 months at 40% margins? If I’m able to build alignment on what I want and what the caregiver wants, can I pay those people much better to maintain clients on a long-term basis? Does that change the unit economics in our business?”

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