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Market-Based Solutions to Vital Economic Issues
News & Media
Jun 25, 2019

African American Older Adults Face a Retirement Crisis

In his most recent paper James H. Johnson, director of the Urban Investment Strategies Center at the Kenan Institute of Private Enterprise, addresses the challenges facing senior African Americans in accessing long-term care. Johnson builds on decades of research into community and economic development and demographics to outline how policymakers can minimize racial disparities in long-term care, and improve life outcomes for the country’s most vulnerable older adults.

The Challenge

Due to a legacy of discrimination in education, housing, employment and wages, African Americans have accumulated less wealth over their lifetimes and are more likely to live in poverty than their white counterparts. In 2013, the median net worth of African American older adult households was roughly one-fifth of that for white older adult households (Rosnick and Baker, 2014). African American seniors are also more likely to develop disabilities earlier in life and to have shorter life expectancies.

The most vulnerable households, comprising 57% of all African American older adult households, are renters and/or housing cost-burdened, spending more than 30% of their monthly income on housing. Many live within homes that are old and structurally unsound. For these most vulnerable African American older adults, social security, public benefits, Medicare and Medicaid serve as primary sources of income and health insurance.

These at-risk older adults are more likely to experience difficulty with the challenges of daily living. Thus, they are the least likely to be able to age in their homes and communities, and the most likely to require long-term care and supportive services as they age.

The Current State of Long-Term Care

The most vulnerable older adults largely rely on either family and friends or Medicaid-financed care as they age. In both cases, there are major concerns regarding quality of care.

Family and friends often face difficulties in providing quality support to aging adults due to their existing caregiving responsibilities toward children and grandchildren, or because of their own health challenges. Furthermore, a number of health and social problems, including the opioid crisis, have contributed to a sharp decline in the number of potential home caregivers.

The primary alternative, Medicaid-financed nursing home care, is often under-resourced and poorly-staffed. African Americans are more likely than their white counterparts to be placed in nursing homes that are racially segregated, disproportionately occupied by residents covered by Medicaid and located in poor neighborhoods. Such facilities routinely fail to meet industry standards of care, and have been cited for service deficiencies, causing some to lose eligibility for funding through Medicaid. Ultimately, the supply of long-term care services for the most vulnerable African American older adults is limited, and service quality is often poor.

Solutions

The Affordable Care Act established several initiatives designed to minimize this racial gap in access to Medicaid-funded, long-term care by administering services in culturally competent ways, allowing for maximum consumer choice over services and providers, and balancing the provision of Medicaid funding between nursing home care and community/home-based services. These programs include the State Balancing Incentives Program, Community First Choice, Money Follows the Person and Real Choice Systems Change Grants.

Congress must protect funding for these programs and intentionally disseminate information about them among African American communities. Additionally, states must expand Medicaid and accept the subsequent federal funding to more broadly implement these programs. States that have refused to expand Medicaid and congressional initiatives to limit Medicaid funding serve to exacerbate racial inequities in long-term care provision.

Another strategy to improve long-term care is to reduce demand for costly institutionalized care among vulnerable, aging African Americans by promoting aging in place through three initiatives: leveraging technological innovation designed to assist older adults with activities of daily living and health care management; passing legislation requiring private landlords and public housing authorities to make age-friendly upgrades to homes and the surrounding built-environment; and advocating for Medicaid expansion and leveraging the Medicaid housing and community development waivers program, which utilizes Medicaid funding to pay a family member to provide in-home, long-term care.

Click here to read the full white paper.

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