Squeeze on Middle-Class Boomers: Retirement, Senior Care, Insurance

Middle-class boomers will experience an even greater squeeze on their financial lives:

• The equity in their homes is declining, even as they count on it as their primary retirement asset.
• The price of caregiving is going up, creating a shortage for seniors and agencies.
• The price of health insurance is predicted to rise, to better reflect the higher risk of older health populations.

Retirement

Older Boomers retiring with less home equity

50% of people over 65 have not “paid off” their houses. They carry mortgages, second mortgages and lines of credit on their houses.

8% of people over 65 with housing debt are under-water.

While “reverse mortgages” make a come-back, that is not even an option for people who have already refinanced their homes.

Housing debt impacts the middle class. Lower-income retirees are less likely to own homes, and the wealthy rely less on home equity. (NYTimes)

Healthcare

Insurance rates could rise for Boomers, decline for Millennials

One problem in pricing insurance under the Affordable Care Act is that insurers can only charge boomers 3x what they charge millennials.

In a frictionless market, that multiple would be 5-to-1 or 6-to-1.

Increasing rates on Boomers, and reducing rates for Millennials, would bring younger and healthier people into the insurance pool.

This change is seen as relatively easy to make, on paper. (Forbes)

Senior Care

Would you want this job?

Job #1 is 7 days a week, requests hospice experience, no mention of overtime.

Job #2 is 10:00 am to 2:00 pm — middle of the day — twice a week.

If you’re a caregiver with nursing credentials or experience, you don’t need these jobs. You can do better.

The lack of affordable caregivers for middle-class customers is a big problem for “on demand” care matching services like Kindly Care.

While on-demand marketplaces say that their customers want “flexibility,” if you ask the caregivers what they want, it’s HOURS.

Solving for Middle-class demand with lower-income supply

Kindly Care uses independent contractors “on demand” — when Kindly has a customer.

But Kindly can’t always fill 40 hours a week, especially if middle-class customers can’t afford a full-time caregiver. Maybe they can afford 4 hours a day, twice a week, as in this ad. It’s a constant struggle to find $15/hour caregivers who are not employed.

Can Kindly Care consolidate the supply of caregivers?

If Kindly can’t give caregivers the hours they want, they have 2 options:

1. Acquire supply directly: Roll-up local agencies in an acquisition process
2. Create access to supply: Consolidate and control the supply of caregivers

Last week, Kindly chose #2 and launched Care Exchange, “enabling home care agencies to collaborate with each other when recruiting, vetting, and training caregivers.” Any agency can list their caregivers on the Care Exchange, and find caregivers in return.

The problem Care Exchange solves is, according to the press release, “fluctuation in work hours from week to week.”

Home Care agencies as good employers

Home care agencies that recruit, retain and employ caregivers know that quality and consistency are their competitive advantage.

Many of their caregivers are full-time employees of the agency or placed with private families, with benefits, overtime and accountability.

Some of the new care marketplaces have more control over their key competitive advantage: highly-vetted employees. By hiring caregivers as full-time employees, these new businesses give everyone what they want:

1. Caregivers get the HOURS they want to create a full-time job, with benefits.
2. Customers get more consistency in the caregiver pool, and higher quality.
3. Streamlined, app-enabled business systems keep the price of care competitive.

Supply of Caregivers

The Training Gap in Nursing

Employers want to hire nurses with “the right” experience, so it’s taking longer for nursing graduates to find job.

New graduates don’t have the experience employers want. Many need 6 months training on-the-job to be accurate and efficient in an operating room or fast-paced hospital setting.

Hospitals can only safely mentor a few nurses at one time. (Pew)

Older nurses are cutting back hours or retiring, causing a major shortage across the country. (Marketplace)

In spite of $10,000 starting bonuses, new nurses without the right experience can’t get jobs quickly.

Beyond Robo-Kitty: Real Kittens

Have you held the robotic kitty from Hasbro? The word rigor-mortis comes to mind.

One memory-care center is letting residents with dementia care for kittens. Real Live Kittens.

Those moments of clarity and communication that the kittens bring out in their human caretakers are “incredibly monumental.” (Upworthy)

More humanity. Real companion pets.

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