Impoverishing the Elderly: A Case Study of the Financial Risk of Spend-Down Among Massachusetts Elderly People

Abstract

The risk of impoverishment due to long-term care costs was estimated for two samples, one aged 75 and older and the other aged 66 and older. Nearly half (46%) of elders aged 75 or older and living alone would spend their lifetime assets and current income to impoverishment levels in 13 weeks if institutionalized in a skilled nursing facility (SNF). Of spousal couples aged 75 or older, 25% would be impoverished in 13 weeks and 57% within 1 year. Among those 66 and older, the rates were comparable: 63% of those living alone and 37% of couples. Implications for long-term care financing options are discussed.