The healthcare industry is not structured to sustainably care for older adults, requiring a shift in how we pay for and provide care to them. Caring for older adults accounts for over half of healthcare spending, and that expense will continue to grow as the population of older adults becomes larger and sicker. The growth in Medicare Advantage is bringing change not only to payment models, but also to care models, with a focus on preventive and home care. While these changes provide an opportunity for improvement, there is a massive structural challenge preventing progress: there are not enough healthcare workers to equitably care for older adults.

This report details five key insights from our senior care research and their implications for stakeholders across the industry.

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As the population of older adults grows, structural flaws in the U.S. healthcare infrastructure prevent the industry from providing accessible, quality, and affordable care to older adults.

• The U.S. healthcare system was built for a population with fewer chronic conditions who died at a younger age than the current population. 
• Older adults rely on a confusing patchwork of Medicare, Medicaid, and personal finances to pay for healthcare.
• The growing population of older adults and diminishing workforce means there will not be enough people to care for the older adult population in the future.
• Nursing homes have become the default care setting for older adults at the end of life, even though this care is expensive, often unnecessary, and does not match with most older adults’ preferences to age and die at home.

Underlying the structural problem of caring for older adults is a societal problem that prevents the United States from making progress.

• The senior care workforce is underpaid and often not respected, leading to high turnover and staffing shortages.
• The ongoing workforce shortage leads to an overreliance on the shadow workforce of unpaid caregivers or the gig economy. In this case, older adults may not receive the type or amount of care they actually need. 

The biggest game changer in senior care is the growth of Medicare Advantage (MA), rapidly poised to become the dominant form of Medicare. This will shift the payment dynamic from a direct line between government and provider to a complex triangle of government, payer, and provider.

• Larger players will consolidate plans to gain market share in an increasingly competitive market.
• MA plans are increasingly serving as default long-term care providers through their supplemental benefits packages. As their enrollment increases, plans will need to decide how far-reaching these benefits should be.
• With no out-of-pocket maximum in traditional Medicare, MA plans offer the perception of financial security to older adults, but there is rising concern about the use of pre-authorization and denials in Medicare Advantage. 

Interest from MA plans is driving meaningful changes in care delivery that will have trickle-down effects for all older adults.

• MA plans are changing care delivery in two key ways:
• They are investing in in-home supports to help older adults age in place. Plans are building up home care resources, along with other sectors of healthcare also interested in home-based care.
• They are promoting increased care coordination and preventive care. This would shift control of patient care and referral patterns away from hospitals and specialists and toward care coordinators and PCPs — despite a deficit in clinicians trained in geriatrics. 

As the demographics of the aging population change and there are more older, sicker seniors compared to younger, healthier ones, the United States will confront some new realities.

• The older adult population will rapidly become older, sicker, and more diverse as the last of the baby boomer generation ages into Medicare.
• With the Medicare Trust Fund set to expire in 2026, paying for care will become more difficult for older adults.
• As healthcare costs and the number of older adults in poverty increase, Medicaid will make up a larger part of state budgets as more older adults qualify for benefits.