Who Pays for Seniors Housing and Care Communities? Evidence from the Residents Financial Survey

To examine the financial characteristics of residents in assisted living and independent living communities and to see how they currently pay for their care arrangements, we surveyed 2,617 residents in assisted living and independent living communities. We asked them how they pay for their current costs and verified their answers by examining self-reported information on their cost and income. Residents stated that they are largely paying for their community costs independently. Approximately one third of respondents reported using their assets and income to cover their current costs. The data supported the notion that individuals living in assisted living and independent living communities are largely mid- to high-income elderly. However, the cross-sectional analysis showed that length of time in the community was positively associated with paying for their expenses independently out of income, after controlling for many confounders including age, education, and lifetime earnings to try to rule out differential longevity and differential selection over time. Further longitudinal analysis is needed to understand the cause and the implications of the positive correlation between ability to pay one's bills out of income and the length of time in the community before conclusions about spend-down can be made.