The growing ranks of Americans aged 85 and older require a lot of care and caregivers; we don’t have enough of either. The U.S. Census Bureau projects that the number of centenarians in the United States will quadruple over the next three decades from about 100,000 today to more than 400,000 in 2054. It will no doubt keep growing at a rapid rate after that since 2054 only gets us through the 100th birthday of half the baby boomer generation.

The Census Bureau also projects that during the same 30 years the number of Americans aged 65 and older will grow from 62 million to 84 million, increasing from 18% to 23% of the U.S. population.

Demography Is Destiny

Unfortunately, neither projection is very useful — the first because it’s too narrow and the second because it’s too broad. While the number of centenarians is impressive, it’s a small number relative to the overall population. Even as a percentage of older adults, centenarians will grow from just 0.2% today to 0.5% in 2054.

Administration on Aging projects that the 85-and-older population will more than double from 6.7 million in 2020 to 14.4 million by 2040.

The projections are overbroad in throwing all those 65 and over into the same bucket. They in fact constitute two generations in significantly different situations. Most people aged 65 to 85 are healthy and able to live independently. The numbers change dramatically after age 85, with many more people needing medical care and assistance with their activities of daily living.

According to a 2019 report by the economist Richard W. Johnson of the Urban Institute, “in 2014, 40% of adults ages 85 and older had severe LTSS (Long-Term Services and Supports) needs, compared with 8% of those aged 65 to 74. Meanwhile, the report noted, “13% of the oldest-old received long-term nursing home care, compared with only 1% of those ages 65-74.”

Skyrocketing Demand

Administration on Aging projects that the 85-and-older population will more than double from 6.7 million in 2020 to 14.4 million by 2040. Since the youngest baby boomers won’t reach age 85 until 2049, the number of 85 and older Americans — and the need for elder care — will keep growing from 2031 through the early 2050s. The result, according to Johnson, is that the number of Americans with significant disabilities will double from 7.6 million today to 14.7 million in 2065.

We’re far from ready to take care of elders. Our elder-care system — and perhaps “system” is a generous term for our myriad of uncoordinated services — is already strained. Families providing care to parents, spouses and siblings often struggle to find the necessary time, facilities and resources. Hospital discharges are extremely stressful as hospitals seek to open up beds to new patients and families struggle with decisions about how to care for loved ones or which inadequate facility to select.

As I write this, I’m working with a family of a woman who has been hospitalized for a respiratory illness and needs continuing oxygen care. The hospital sent out a placement request to 88 facilities and received responses from two saying they would accept the transfer, both an hour’s drive (each way) from her family members.

Patchwork Programs

Further, care needs keep changing as illnesses progress, so placement and care decisions have to be made continually. Sticking with the example of my current client, because she needs continuing skilled care, Medicare will pay for her care at first, entirely for up to 20 days, after which there is a sizable co-pay for the next 80 days. But it’s not clear whether the patient will receive a full 100 days of Medicare coverage because it will stop before then if she stops needing skilled care.

After the Medicare coverage ends, whether at 100 days or sooner, she will have to pay privately at a cost of hundreds of dollars a day, qualify for Medicaid coverage, or return home. This uncertainty adds to the stress for patients and families, as well as for facilities that must manage their caseloads and cashflow.

The beauty and Achilles heel of the American system is its entrepreneurial nature. Both non-profit and for-profit companies and organizations step in to fill unmet needs.

In recent decades, we’ve seen a tremendous growth of assisted-living facilities and home care agencies. At the same time, we have seen the closure of many nursing homes, and seen many others move from a chronic-care to an acute-care model in pursuit of higher Medicare reimbursement rates. These are natural and flexible responses to needs and funding.

But the myriad options available for care make it even more difficult for families to assess what their family members need and to learn what’s available in particular communities. Further, in the absence of planning, what’s really needed is often unavailable.

Elders’ Needs Have Changed

Assisted living facilities are built on a residential model, often providing very limited care and forcing residents to move out when their needs grow. Very few new nursing homes have been built since the 1960s and 1970s, many of them with shared rooms and poor ventilation, the results of which proved fatal for many residents in the COVID-19 pandemic. No one wants to move to one of these facilities, but many older adults must, due to lack of affordable alternatives.

Most elder care today is provided by family members, often daughters.

Most elder care today is provided by family members, often daughters. Few older adults can afford to pay for care, whether at home, in assisted living, or in nursing facilities, for any length of time. Our elder care financing system is based on Medicaid, a safety-net health care program.

Since Medicaid is designed to be only for the poor, in order to obtain coverage, older adults must become poor by spending down their assets. And then they still may not get the care they want. Medicaid pays for only limited assisted living or home care, though coverage of both has been expanding in recent years. As a result, many people have to move to nursing homes just because Medicaid will pay for their care in such a setting.

Preparing for Baby Boomers

This is the picture of today’s system. Its fault lines will totally fracture when the baby boomers begin reaching their late 80s in about 10 years, which gives us a decade to prepare. So, what can we do? Here are some ideas I’ve been hearing from experts in the field:

Update the Financing System: Very few people can afford private long-term care insurance and those who can need it least. Attempts at creating a public long-term care insurance program have largely failed because they have not been universal.

This was the fate of the CLASS Act that was passed as part of the Affordable Care Act. It was never implemented because it was deemed actuarially unsound due to adverse selection — those who most needed it would sign up, those least likely to need care would not.

Washington State has initiated a universal program called Washington Cares that adds a payroll tax of 58 cents on every $100 of earnings, in exchange for which Washington residents will receive up to $36,500 of long-term care benefits.

That won’t solve the need, but it can provide important assistance for many people. A state-specific program, however, raises questions about what happens when people move in or out of the state. A national solution is likely to function better in this regard.

Workforce Development: Despite the promise of technology to solve care challenges, most care will continue to have to be provided by people, one on one. Not only do these caregivers deserve to earn a living wage, but research shows that doing so raises the quality of care — not a major surprise.

Paying caregivers a living wage and benefits results in less turnover, which leads to better training and commitment, the result being a higher level of care. It will also bring in more and higher-caliber workers.

Many caregivers today are paid so badly that they must depend on food stamps and other public benefits.

Of course, that costs money. But it’s money well spent since it helps both the caregivers and care recipients. Many caregivers today are paid so badly that they must depend on food stamps and other public benefits. So, the cost of higher pay is to some extent defrayed by savings on these other programs.

New Models of Providing Care: Where care is received has already changed significantly over recent decades, moving from nursing homes to assisted-living facilities and home-based care. This is a good trend, but much more can be done.

Some communities, both in the United States and abroad, are experimenting on new types of care facilities that are more like homes. Many housing developments for older adults are adding services that can be provided to residents on a more cost-effective basis than would be the case if they were geographically scattered.

One challenge of our financing system is that while the cost of providing care is borne by these communities, the savings go to the medical providers and insurers who benefit from healthier patients.

Family Support: Despite all the money spent on elder care, most care has always been and continues to be provided by family members, often at great personal and financial cost. We need to increase supports in order to ease the strain this causes.

These can include better assistance with coordination of care and discharge planning from hospitals, credit for Social Security contributions when family members must leave or reduce work to provide care, better family leave and easier qualification for Medicaid to provide supplemental care or to pay family members providing care.

All these initiatives will take time to implement, test out and modify, as necessary. We have the next decade to experiment and get this right.

Harry S. Margolis practices elder law in Massachusetts and writes the Risking Old Age in America blog (OkayBoomer.substack.com) about what the aging of the baby boom generation means for the United