HomeMy WebLinkAboutAging and Readiness Report AaarpThe Aging Readiness &
Competitiveness Report
UNITED STATES
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2
Every day in the United States, 10,000
people turn 65, and the number of older
adults will more than double over the next
several decades to top 88 million people
and represent over 20 percent of the
population by 2050.12
1 Administration on Aging. https://aoa.acl.gov/
Aging_Statistics/future_growth/future_growth.
aspx#age.
2 The Washington Post. https://www.
washingtonpost.com/news/fact-checker/
wp/2014/07/24/do-10000-baby-boomers-retire-
every-day/?utm_term=.6da459401a8d.
The rapid pace of change creates an
opportunity and imperative for both the
public and private sector to harness
the potential of the growing segment of
society and address the welfare of older
Americans. A confluence of forces is
helping to extend older adults’ working
lives and their productivity. Americans are
living longer, and many older adults want
to remain in the labor force, as it provides
continued income, social connection,
and a measure of self-worth. Further,
the need to finance extended retirement
Overview
(Sources: World Bank, United Nations, OECD)
3
and growing healthcare costs is creating
additional impetus. While the U.S. labor
force is expected to grow by just 0.5
percent over the next decade, adults over
age 65 represent the most rapidly growing
segments: the age groups of 65 through 74
and 75 and older are projected to grow at
4.5 percent and 6.4 percent, respectively.3
Recognizing this productive potential,
and the need to retain skilled workers
and to transfer institutional knowledge,
companies and other employers are
introducing phased-retirement and part-
time work opportunities so that older
adults can remain in the labor force longer.
The aging population is also generating
demand for healthcare services and
healthcare workers. Federal Medicare
and Medicaid spending are projected to
account for an increasing share of the
federal budget and will be the subject of
3 United States Department of Labor, Bureau
of Labor Statistics. https://www.bls.gov/opub/
mlr/2015/article/labor-force-projections-to-2024.
htm.
policy debates. A variety of options will
likely be proposed to address this issue,
including options to curb unnecessary
spending, or those that increase resources
to address the needs of the expanding
demographic. However, future funding for
age-related programs remains tenuous.
Meanwhile, the trend toward aging in place
is accelerating along with the demand
for home healthcare workers. Programs
such as Self-directed Medicaid services,
which enable older adults to manage their
healthcare spending more directly and
help offset caregiving costs, are helping
to address some of the need. Among
people ages 65 and older, the population
85 and older is growing at a faster rate
and will increasingly need services at
home or in the community to maintain
their independence. These trends are
generating public, private, and non-profit
partnerships that are working to find
innovative ways to fill the gaps.
4
The relatively independent nature of
American culture and the tendency for
older adults to live alone or with their
spouse and away from their children put
older adults in the U.S. particularly at risk
of social isolation. Limited transportation
options and the lack of affordable
housing have been identified as leading
issues inhibiting connectedness and
social interaction. Though new forms of
paratransit are expanding as evolving
mobility services penetrate the market,
the growing number of older adults as
a share of the population, coupled with
constraints on ADA paratransit, results in
notable service gaps. A network of public,
private, and community-based service
organizations are working to address older
adults’ needs exacerbated by these gaps
by way of meal delivery and a range of
in-home services in an effort to meet the
growing and varied needs of a population
increasingly aging in place.
Social Connection
As in other countries, social connection
is a key factor contributing to older
adults’ overall wellness. Historically,
multigenerational families have not been
common in the U.S., with older adults often
living with their spouse or alone, and the
majority living away from their children or
other family members. In 2016, 59 percent
Community Social Infrastructure
(Source: U.S. Department of Health and Human Services)
5
of older Americans age 65 and older who
did not live in an institutional care facility
lived with their spouse or partner, and 29
percent lived alone, while just 9 percent
lived with family or in other arrangements.4
Among older Americans who have
children, approximately 90 percent are in
contact with at least one of their children –
by either phone or e-mail or in person – at
least once per week.5
Millions of older Americans suffer from
persistent loneliness – 32 percent of
people ages 60 through 69, and 25
percent of those age 70 and older
reportedly feel lonely.6 Loneliness is
not just a concern among seniors living
alone – according to a 2012 study, 43
percent of surveyed older adults felt lonely,
yet only 18 percent lived alone.7 Such
loneliness can diminish overall well-being
and present risks to physical and mental
health, underscoring the importance of
establishing strong channels, both physical
and digital, for social connection and a
sense of community support.
In addition, older adults living alone are
less likely than those living with others
4 U.S. Department of Health and Human Services
Administration on Aging (2016). http://www.
giaging.org/documents/A_Profile_of_Older_
Americans__2016.pdf.
5 Pew (2009). Growing Old in America:
Expectations vs. Reality. Retrieved from http://
www.pewsocialtrends.org/2009/06/29/growing-
old-in-america-expectations-vs-reality/.
6 AARP (2010). All the Lonely People. Retrieved
from http://www.aarp.org/personal-growth/
transitions/info-09-2010/all_the_lonely_people.
html.
7 University of California San Francisco (2012).
http://www.ucsf.edu/news/2012/06/12184/
loneliness-linked-serious-health-problems-and-
death-among-elderly.
to describe their financial situation
favorably, which can compound mental
and emotional stress. In 2014, about 20
percent of older adults living alone were
in poverty, compared to just 6 percent of
older adults living with others.8 According
to recent research, over one-quarter of
those living alone face an increased risk
of mortality,9 and homebound seniors
are twice as likely to develop Alzheimer’s
disease as are more active and socially
engaged individuals.10 Expanding social
and community infrastructure that
facilitates greater social connection
has the potential to mitigate a range of
cross-cutting issues limiting older adults’
well-being and continued engagement in
society.
There is limited direct government
intervention on this issue, and as a result,
advocacy organizations and NGOs are
taking the lead to combat it. Recognizing
the myriad risks associated with loneliness
and social isolation, organizations such
as the National Association of Area
Agencies on Aging (n4a), which has 622
area agencies that provide a range of
services such as meals, rides, home visits
and care services, seek to mitigate the
adverse impacts of isolation.11 One long-
8 Pew (2016). http://www.pewsocialtrends.
org/2016/02/18/3-well-being-of-older-adults-
living-alone/.
9 Perspectives on Psychological Science
(2015). http://journals.sagepub.com/doi/
full/10.1177/1745691614568352.
10 McNight’s (2011). http://www.mcknights.
com/news/housebound-seniors-are-more-
likely-to-develop-alzheimers-research-finds/
article/201593/.
11 National Association of Area Agencies on Aging
(n4a) (2016). https://www.n4a.org/Files/H4H%20
Campaign%20Press%20Release.pdf.
6
lasting and effective program is Meals on
Wheels America, which runs through a
network of 5,000 independently run local
programs delivering daily meals to isolated
and vulnerable older adults. Not only is
this service fulfilling a nutritional need,
but recipients reported feeling safer and
less lonely having more human contact,
and studies have shown that they have
shown improvements in mental health,
including lower incidence of depression
and anxiety.12
While many programs target the low-
income and most vulnerable populations,
middle- and upper-income seniors are also
at risk of isolation and loneliness. Local
community centers can play a vital role for
all seniors in combating social isolation by
providing a meeting place for older adults,
as well as classes and other educational
programs that help keep people socially,
mentally, and physically engaged. The
District of Columbia’s Office on Aging’s
Senior Wellness Centers, for example,
provide city-wide health education and
applied learning centers with a range of
programs, from nutrition classes to creative
arts to classes on wellness and disease
prevention.13 City and local organizations
are making strides, but advocacy
organizations and service providers such as
n4a, the Center on Aging, and the National
Council on Aging are helping to elevate
the issue of isolation and loneliness before
the U.S. Congress, underscoring the need
12 USA Today (2016). https://www.usatoday.
com/story/lightpost/eldercare/2016/11/14/
study-meals-wheels-delivers-cooked-food-
companionship-and-safety-checks/93790366/.
13 DC Office on Aging (Accessed 2017). https://
dcoa.dc.gov/service/senior-wellness-centers.
for continued funding to support these
critical programs.14
Physical Infrastructure
Physical infrastructure in the U.S. is
generally supportive of older adults,
but existing gaps, particularly in public
transportation and age-friendly housing,
continue to limit social engagement and
general mobility. According to the 2015
United States of Aging Survey, nearly
8 in 10 older adults (78 percent) were
generally satisfied with their community’s
infrastructure, and a majority (92 percent)
stated that it is easy for them to get
where they need to go. However, notable
shortfalls were identified, as only 22
percent of older Americans surveyed found
public transportation “acceptable,” and
28 percent rated it as “poor,”15 making
transportation a key focal area for targeted
improvements. Further, the housing stock
in the U.S. is, by and large, not age-friendly,
and high-cost upgrades are often out of
reach for older adults who are living on
limited or fixed incomes.
Transportation
Despite ongoing efforts, there are enduring
issues of limited public transportation
accessibility and infrastructure. For older
14 The United States Senate Committee on Aging
(2017). https://www.aging.senate.gov/press-
releases/senate-aging-committee-examines-the-
mental-and-physical-effects-of-social-isolation-
and-loneliness.
15 National Association of Area Agencies on Aging
(n4a), the National Council on Aging (NCOA), and
United Healthcare. (2015) The 2015 United States
of Aging Survey National Findings. https://www.
ncoa.org/wp-content/uploads/USA15-National-
Fact-Sheet-Final.pdf.
7
adults who can no longer drive and who
live in suburban or rural communities
without adequate public transit, a lack
of transportation options can have a
profound effect on overall quality of life.
Sixty percent of people age 50 and older
reported in a 2010 survey that they did
not have public transportation within
a ten-minute walk from their homes.16
Challenges accessing transportation are
ranked as the number-one reason why
people contacted the Eldercare Locator, a
public service of the U.S. Administration on
Aging that connects older adults and their
families and caregivers with transportation
in their communities.17
Transportation accessibility for the
disabled has been facilitated by the
Americans with Disability Act (ADA), but
those services are limited and do not reach
the needs of the broader population of
older adults. The ADA, which was signed
into law in 1990, prohibits transportation
agencies from discriminating against
individuals with disabilities and requires
disability access in new vehicles. The
law has had a marked impact on those
with disabilities. Before its passage,
only 36 percent of fixed-route buses
were accessible to wheelchair users. By
2011, over 98 percent were wheelchair-
accessible.18
16 AARP (2011) Ensuring Transportation for
Those Who Don’t Drive. http://www.aarp.org/
home-garden/transportation/info-06-2011/aarp-
transportation-for-those-who-dont-drive.html.
17 Eldercare Locator. http://www.eldercare.gov/
Eldercare.NET/Public/About/Index.aspx.
18 The U.S. Senate Committee on Health,
Education, Labor and Pensions (2011). https://
www.help.senate.gov/imo/media/doc/Capozzi1.
pdf.
In addition, the ADA required public
transportation agencies to provide
paratransit services in cities, door-to-
door services for qualified adults who
are not able to ride public transportation.
Though the ADA has helped to expand
transportation services for the disabled,
simply being older and/or having
limited mobility are not qualifying
criteria,19 rendering many older adults
ineligible for services and leaving major
gaps in transportation options for this
demographic.
Rising costs of paratransit also represent
a threat to access. Nationwide paratransit
costs stood at USD 5.2 billion in 2013,
which was 12.2 percent of the total costs
for transit services, and cost is projected to
grow as the population ages.20 According
to the Government Accountability
Office (GAO), the cost of paratransit
trips in 2012 was 3.5 times higher than
that of fixed-route trips, and increased
utilization, enrollment, higher vehicle
costs,21 and urban congestion are driving
costs higher.22 Local governments can
discontinue the service due to budgetary
reasons, subjecting the routes to potential
abrupt disruption and uneven service.23
19 AARP, May 2017.
20 New York University. Intelligent Paratransit.
http://wagner.nyu.edu/rudincenter/wp-content/
uploads/2016/09/INTELLIGENT_PARATRANSIT.
pdf.
21 New York University Rudin Center for
Transportation Policy & Management. N.D. http://
wagner.nyu.edu/files/faculty/publications/
INTELLIGENT_PARATRANSIT.pdf.
22 Citizens Budget Commission (2016). https://
cbcny.org/research/access-ride.
23 FindLaw (Accessed 2017). http://civilrights.
findlaw.com/discrimination/transportation-and-
the-americans-with-disabilities-act-ada.html.
8
Medicaid can fill some of the unmet
transit and paratransit needs by covering
non-emergency medical transportation,
such as trips to the doctor for scheduled
appointments, but Medicaid funds are also
vulnerable to cuts, which could threaten
this service channel as well.
Federal agencies are also beginning to
engage directly with communities to
improve transportation access. In 2015,
the Federal Transit Administration (FTA), in
partnership with Easter Seals and the n4a,
launched the National Aging and Disability
Transportation Center to provide technical
assistance to help communities create
accessible transportation for older adults.24
It connects transportation leaders, the
aging, and disability networks to ensure that
the perspectives of people with disabilities
and older adults are incorporated into every
aspect of transportation planning. Over
130 organizations across 37 states and two
tribal nations competed for grant funding
from the NADTC to test and develop
their programs. The NATDC ultimately
awarded USD 300,000 to six communities
in five states – Massachusetts, Michigan,
Mississippi, Ohio, and Virginia – and the
recipients are moving forward with USD
50,000 each to expand mobility options for
vulnerable populations in their areas.25
Private-sector ride-hailing companies
have recognized the market opportunity
and have partnered with service providers
to allow older customers to book rides
through a phone operator (bypassing
24 National Aging and Disability Transportation
Center (2017). http://www.nadtc.org/grants-
funding/nadtc-grant-opportunities/nadtc-awarded-
grants/.
25 Ibid.
smart phone apps entirely). Leading
transportation companies such as Uber, a
San Francisco-based company, launched
UberASSIST, a ride option that is designed
to provide additional assistance to seniors
and people with disabilities. Users do not
need an Uber account but can merely
call to request a ride from a driver with a
vehicle designed to accommodate their
special needs.26 The service is being
launched first on Android technology in
major cities across 46 states, with plans
for further expansion.27 In addition, Uber
provides tutorials and educational training
on how to use the service for community
residents.28 Uber’s main competitor, Lyft,
offers similar programs. As praised by
Gretchen Alkema of the SCAN Foundation,
“[Such services] demonstrate how the
private sector can help older adults and
people with disabilities get around their
communities – extending beyond curb-to-
curb service to door-to-door.”29 However,
the services are still unable to reach
many older adults as they do not offer
specialized or handicapped-accessible
vehicles on demand.
Affordable Housing
Affordable and age-friendly housing
are areas of major concern for aging
Americans and are policy areas in need
of greater support. Housing is the single
largest expenditure for households
age 55 and older, accounting for 32.9
26 Uber. http://ubermovement.com/uberassist/.
27 Uber. http://newsroom.uber.com/transitapp/.
28 Uber. https://newsroom.uber.com/us-florida/
freedom-in-motion/.
29 Interview with Gretchen Alkema, Vice President
of Policy and Communications, the SCAN
Foundation. February 2017.
9
percent of their annual expenditures.30
Thirty percent of renters ages 65 and
older and 23 percent of those who own
residential property with mortgages are
spending more than half of their income on
housing.31 Federal programs have provided
moderate incentives to expand supply, but
there remain shortages of affordable, age-
friendly housing stock.
Through Section 202 of the Supportive
Housing for the Elderly program, the
U.S. Department of Housing and Urban
Development (HUD) provides capital and
operational grants to developers for the
construction of multifamily housing units
for low-income older adults ages 62 and
older. For over 60 years, the department
has provided interest-free grants to finance
these projects, which do not have to be
repaid as long as the project remains
affordable for at least 40 years. The funding
covers the construction of new units or the
acquisition and/or rehabilitation of existing
units. Low-income, older residents rate
these units as good-quality properties32
that largely have supportive facilities;
the majority of facilities (73.9 percent)
have grab rails, and 91.1 percent have
ramps or level entrances for convenient
30 U.S. Bureau of Labor Statistics (2016). A Closer
Look at Spending Patterns of Older Americans.
Retrieved from http://www.bls.gov/opub/btn/
volume-5/pdf/spending-patterns-of-older-
americans.pdf.
31 Joint Center for Housing Studies of Harvard
University (2014). Housing America’s Older
Adults. http://www.jchs.harvard.edu/sites/jchs.
harvard.edu/files/jchs-housing_americas_older_
adults_2014.pdf.
32 Housing for the Elderly (Section 202): 2013
Summary Statement and Initiatives, available
at http://portal.hud.gov/hudportal/documents/
huddoc?id=housing-elderly-2013.pdf.
access of seniors.33 Almost all of the newer
projects (built since 1990) have at least
one accessible unit, and 43 percent of
all units are wheelchair-accessible. The
majority of projects also have the capacity
to provide an array of communal services
for their residents and include community
spaces for social and recreational facilities,
including congregate dining.34
Though this program has expanded
supply, there remains a shortage of these
facilities. The waiting lists in most states
are long; the relatively high demand for
this housing means that applicants often
wait over two years for a unit. In New York
City alone, the waiting list includes over
200,000 seniors.35 The problem is only
becoming worse as funding for the capital
construction grants was eliminated in
2012, and only grants for the renewal of
support for existing units continue. This
lack of construction investment for new
units slows efforts to meet the needs of
the growing population of low-income,
older adults who need affordable and
adequate housing.36
33 House of Representatives Staff Analysis (2014).
https://www.flsenate.gov/Session/Bill/2014/925/
Analyses/h0925a.LFAC.PDF.
34 U.S. Department of Housing and Urban
Development Office of Policy Development and
Research (2008) https://www.huduser.gov/portal/
publications/sec_202_1.pdf.
35 New York Housing Conference (2017).
http://thenyhc.org/2017/03/01/budget-cuts-
proposed-president-trump-exacerbate-new-yorks-
affordable-housing-homeless-crisis/.
36 AARP Policy Book 2016. Accessed via: http://
policybook.aarp.org/the-policy-book/chapter-9/
subsub028-1.3091814.
10
Community Support for Aging in Place
Federal and state government support
is channeled largely through community
organizations, which play a vital role in
helping older adults to live independently
and age in place. The Older Americans
Act (OAA), enacted in 1965, was a
foundational piece of legislation that
established the Administration on Aging
(AoA) and, through the Department of
Health and Human Services (HHS), has
helped to provide essential services to
vulnerable seniors for decades. The OAA
funds critical services that keep older
adults healthy and independent, including
meals, job training, senior centers,
caregiver support, transportation, health
promotion, and benefits enrollment. The
impact of OAA services is widespread as
funding is distributed to 56 state agencies,
more than 200 tribal organizations, more
than 600 area agencies on aging, and
more than 20,000 local service providers.37
While the services are available to older
adults generally, OAA targets individuals
with the greatest social economic need,
such as those who have a low income
or are living in rural, isolated areas.
Approximately three million seniors
received OAA-funded services in 2014.
However, while services are widespread,
and demand for those services is
increasing, funds have not kept pace
with the needs of the growing aging
37 National Committee to Preserve Social Security
& Medicare (2016). http://www.ncpssm.org/
PublicPolicy/OlderAmericans/Documents/
ArticleID/1171/Older-Americans-Act.
population. The federal funds allocation
rose minimally from USD 1.80 billion in
FY 2004 to USD 1.88 billion in FY 2014,
while the population of people ages 65 and
older grew by nearly 30 percent over the
same period.38 39 Though President Obama
signed bipartisan legislation reauthorizing
the OAA for three years and proposed a
funding increase in his proposed FY17
budget,40 future funding remains uncertain.
In light of tenuous funding, community-
based organizations are seeking
supplemental financial resources
for their survival. In order to help
expand organizations’ business and
development capacity, in 2013, HHS,
under its Administration for Community
Living (ACL), launched the Business
Acumen Learning Collaborative. Under
this initiative, ACL provides technical
assistance to networks of community-
based organizations to assist them in
marketing, contracting, and pricing the
services they provide to older adults and
individuals with disabilities. In the few
years since its inception, the ACL has
expanded its reach, providing technical
assistance to pilot learning collaboratives
in nine networks in 2013 and 2014, and
38 AARP Public Policy Institute (2014). http://www.
aarp.org/content/dam/aarp/research/public_
policy_institute/health/2014/the-older-americans-
act-AARP-ppi-health.pdf.
39 United States Department of Labor Bureau of
Labor Statistics (2015). https://www.bls.gov/opub/
mlr/2015/article/labor-force-projections-to-2024.
htm.
40 National Committee to Preserve Social Security
& Medicare (2016). http://www.ncpssm.org/
PublicPolicy/OlderAmericans/Documents/
ArticleID/1171/Older-Americans-Act.
11
eleven more networks in 2015. In 2016,
two grants totaling USD 3.75 million over
three years were awarded to the National
Association of States United for Aging and
Disabilities (NASUAD) and the National
Association of Area Agencies on Aging
(n4a) to build business capacity in the
aging and disability services networks.41
Each of the grant recipients partners with a
range of affiliated organizations, including
those that specialize in advocacy, meal
delivery, home care, and other service
providers to help boost the capacity of
the network. The ACL’s successful model
of building business acumen through its
Center for Integrated Programs, Office
of Integrated Care Innovations has been
replicated by other entities, including
those that provide integrated health care
services.42
In another bid to allow aging in place, in
2015, the U.S. Department of Agriculture
(USDA) proposed to improve access
to groceries for homebound seniors
who participate in the Supplemental
Nutrition Assistance Program (SNAP),43
a government program that provides
financial assistance for food purchases to
low- and no-income people living in the
U.S., by offering home-delivery service
for those who are unable to shop. One in
five SNAP recipients is elderly or disabled.
41 Administration for Community Living
(2016). https://acl.gov/NewsRoom/
NewsInfo/2016/2016_10_07.aspx.
42 National Council on Aging (2016). https://www.
ncoa.org/wp-content/uploads/LC-2016-FINAL-
REPORT_edited-0317.pdf.
43 SNAP, a federal nutrition assistance program for
low-income people.
The program is moving forward, and the
USDA now permits grocery purchasing
and home-delivery services run by
government and non-profit organizations
to accept SNAP benefits as payment.44
This is particularly important for older
adults who have limited access to public
transportation or otherwise limited
mobility. According to Tom Vilsack,
former U.S. Secretary of Agriculture,
home delivery of groceries is an important
first step toward meeting the needs of
vulnerable older adults, particularly those
living in rural areas, given that America’s
rural population is older than the average
age in the nation overall, and rural seniors
experience a higher incidence of poverty
than seniors nationwide.45 In January of
2017, the USDA selected private-sector
retail firms, online retailers, and smaller
regional stores to test which types of firms
are best positioned to facilitate online
SNAP purchasing in differing settings.46
The USDA is conducting pilot programs
across seven states in urban and rural
areas, the results of which will inform
future programs.
44 U.S. Department of Agriculture (2015). http://
www.usda.gov/wps/portal/usda/usdahome?conte
ntidonly=true&contentid=2015/07/0201.xml.
45 U.S. Department of Agriculture (2017).
https://www.usda.gov/media/press-
releases/2017/01/05/usda-announces-retailer-
volunteers-snap-online-purchasing-pilot.
46 U.S. Department of Agriculture (2017). https://
www.fns.usda.gov/pressrelease/2017/fns-
000117.
12
Aging baby boomers represent a major
potential loss to the economy if they
drop out of the labor force prematurely. A
looming wave of retiring baby boomers and
an impending skills gap have policymakers
and management across economic sectors
looking at ways to phase retirement,
extend productive potential, and pass
on institutional knowledge to the next
generation. Further, as Americans are living
longer lives and need greater economic
security, a growing number are seeking to
stay working or return to work. However,
age discrimination and a lack of familiarity
with new technology, among other issues,
remain barriers.
Labor force Participation of Older
Americans
Older Americans tend to be more active
in the labor market than counterparts in
most OECD countries: the labor force
participation rate of people ages 65 and
older in the U.S. was 18.9 percent as of
2015, more than one-third higher than the
OECD average. In fact, older Americans’
participation rate has increased
dramatically over the past several
decades, up by more than 50 percent
over the period of 2000 through 2017,
with labor force participation for older
women growing over 70 percent during
Productive Opportunity
(Source: U.S. Bureau of Labor Statistics)
13
that period.47 The labor force participation
rate for both men and women is expected
to grow further to reach 21.7 percent by
2024.48
The increase in the labor force
participation rate resulted from the
convergence of acute economic shock and
persistent trends. Two major economic
recessions and market selloffs adversely
impacted retirement savings, and this has
been exacerbated by longer-term factors.
Over the last few decades, American
employers have been shifting away from
defined benefit plans, which guarantee
retirees a specific cash benefit, toward
defined contribution plans such as 401(k)
s, where employees are responsible for
contributing to and managing their own
retirement accounts.49
Americans are living longer, and an
increasing share of older adults are
seeking to extend their working life for
additional income, social engagement,
and purpose. People are also staying in
the labor force longer as the responsibility
for contributing and managing retirement
account investments, as well as the
risk of poor investment returns, shift
47 Advisor Perspectives (2017). https://www.
advisorperspectives.com/dshort/updates/long-
term-trends-in-employment-by-age-group.
48 OECD Statistics; U.S. Department of Labor
(2015). http://www.bls.gov/emp/ep_table_303.
htm.
49 Bipartisan Policy Center (2014). https://
bipartisanpolicy.org/blog/shift-defined-
contribution-retirement-plans/.
from employers to employees.50 The
Government Accountability Office
(GAO) reported in 2015 that over half of
households ages 55 through 64 had little
or no retirement savings.51 The National
Institute on Retirement Security’s survey
in 2015 also found that more than half of
respondents would seek employment after
retirement for the purpose of financial
security.52 Indeed, those who are financially
less prepared for retirement have tended
to work longer. Among those who are
physically able to continue working,
Americans who find themselves struggling
financially expect to delay their retirement
to age 73 on average, compared with
the average age of 66 among those who
believe they are financially prepared.53
As of 2016, nearly one in five Americans
ages 65 and older was active in the labor
market.54 According to Jim Emerman, Ex-
ecutive Vice President at Encore, a non-
governmental organization focused on older
50 Interview with Robert Bednarzik, Visiting
Professor at Georgetown Public Policy Institute.
October 2016. Interview with Richard Johnson,
Director of Program on Retirement Policy of
Urban Institute. February 2017. Interview with Jim
Emerman, Executive Vice President of Encore.
February 2017.
51 U.S. Government Accountability Office
(2015). Retirement Security – Most Households
Approaching Retirement Have Low Savings.
Retrieved from http://www.gao.gov/
assets/680/670153.pdf.
52 National Institute on Retirement Security (2015),
Retirement Security 2015: Roadmap for Policy
Makers Americans’ View of the Retirement Crisis.
Retrieved from http://www.nirsonline.org/storage/
nirs/documents/2015%20Opinion%20Research/
final_opinion_research_2015.pdf.
53 Gallup. (2013). http://www.gallup.com/
poll/166952/baby-boomers-reluctant-retire.aspx.
54 http://www.pewresearch.org/fact-
tank/2016/06/20/more-older-americans-are-
working-and-working-more-than-they-used-to/.
14
adults’ skill development and productivity,
“Minor tweaks to the social security sys-
tem could make it more flexible and create
incentives for seniors to work longer.” He
points out, for example, “If people want to
stop working for a little while to obtain train-
ing, they shouldn’t lose credits.” 55 At pres-
ent, one who reaches the eligible age for
full retirement benefits, which is currently
66 years old and will gradually rise to 67
by 2027, receives an additional 8 percent
benefit for each year he or she delays col-
lecting benefits until age 70.56 This financial
bonus could partially explain the greater
increase in labor force participation within
the 65 through 69 age group when com-
pared with other older age groups over the
past two decades.57 However, many are not
aware of the delayed-benefit bonus, and a
proportion of those working after age 65
are also receiving Social Security benefits.
Adjustments in the program could increase
that rate even further while continuing to
support seniors.
55 Interview with Jim Emerman, Executive Vice
President of Encore. February 2017.
56 National Academy of Social Insurance (2015).
https://www.nasi.org/learn/socialsecurity/
retirement-age.
57 Interview with Richard Johnson, Director of
Program on Retirement Policy of Urban Institute.
February 2017.
Barriers to Labor force Participation
Although the U.S. labor market has
gradually recovered from the Great
Recession, older adults are still
encountering barriers to remaining in or
rejoining the labor force. According to
the Schwartz Center for Economic Policy
Analysis at the New School, more than
one in ten older workers ages 55 and older
is unemployed or underemployed, when
accounting for people who work part-time
while preferring full-time work, as well as
those who have given up looking more
than a year.58
Older people suffered more from long-
term unemployment than younger people
during the latest recession and have also
recovered more slowly. According to the
Bureau of Labor Statistics, the median
duration of unemployment for people ages
55 and older peaked at 34 to 35 weeks in
2011, more than 50 percent longer than
that of overall jobseekers at the same time.
As of March of 2017, 33 percent of older
jobseekers ages 55 and older were out of
work for 27 weeks or longer, 46 percent
higher than the percentage for people
ages 16 through 54.59 The longer older
people remain unemployed, the greater the
risk of losing relevant skills or of dropping
out of the labor force altogether.60
58 The New School Schwartz Center for
Economic Policy Analysis (2016). http://www.
economicpolicyresearch.org/index.php/wealth-
insecurity-news/1673-september-2016-
unemployment-report-for-workers-over-55.
59 United States Department of Labor Bureau of
Labor Statistics (2017). https://www.bls.gov/web/
empsit/cpseea36.htm.
60 U.S. Government Accountability Office (2012).
http://www.gao.gov/assets/600/590408.pdf
“Minor tweaks could make the social security
system more flexible and create incentives for
seniors to work longer. For example, if people
want to stop working for a little while to obtain
training, they shouldn’t lose credits.”
– Jim Emerman, Executive Vice President, Encore
15
Age discrimination has also been a major
barrier for older jobseekers. In a 2014
survey, 57 percent of respondents who
were 45 through 70 years old and had been
unemployed at some time over the past
five years believed that employers thought
they were too old or that age was a either
somewhat of a barrier or a major barrier to
employment.62 Although U.S. laws prohibit
age discrimination when considering an
application for employment (the law sets
the age threshold at 40 and older), in reality
age discrimination is hard to eliminate due
to the difficulty in proving it.63
62 AARP (2015). The Long Road Back: Struggling
to Find Work After Unemployment. http://www.
aarp.org/content/dam/aarp/ppi/2015-03/The-
Long-Road-Back_INSIGHT.pdf.
63 Reuters (2016). http://www.reuters.com/article/
us-column-miller-unemployment-idUSKCN11E297.
Employers also report concerns regarding
the costs associated with hiring and
training older workers, according to a
study by the GAO.64 Some employers are
hesitant to hire older workers because
work history and experience enable them
to command higher salaries. Costlier
healthcare expenditure for older
workers as compared with younger
workers represents another prevalent
concern for employers. For people ages
65 and older who are employed, health
benefits through employers remain their
primary reimbursement sources even
though they are eligible for Medicare
(i.e., the national social health insurance).
Richard Johnson, who directs the
Program on Retirement Policy at the
64 U.S. Government Accountability Office. (2012)
http://www.gao.gov/assets/600/590408.pdf.
(Source: Current Population Survey by Bureau of Labor Statistics)61
61 https://www.bls.gov/cps/tables.htm.
16
Urban Institute, suggests, “One potential
way to mitigate this issue is to make
Medicare the primary payer for older
workers’ healthcare costs regardless
of their employment status.” Still, other
issues, such as the increasing utilization of
technology in the workplace, have made
some employers reluctant to hire older
workers if they believe the individuals will
not be working long enough to recoup the
value of the employer’s investment.65
Assisting Job Placement
The U.S. federal government has
established a nationwide labor force-
development system that provides
financial aid and various support services
to improve employability of those currently
working and the unemployed, and to
assist their job search. However, the
Senior Community Employment Program
(SCSEP), established in 1965, is the only
one that provides training and employment
services specifically for older Americans.66
65 Interview with Richard Johnson, Director,
Program on Retirement Policy, Urban Institute,
February 2017.
66 U.S. Department of Labor. Evaluation of the
Senior Community Service Employment Program
(SCSEP) (2013). https://wdr.doleta.gov/research/
FullText_Documents/ETAOP_2013_03.pdf.
The program is operated by the U.S.
Department of Labor’s Employment and
Training Administration in collaboration
with state agencies and 19 national
NGOs. It provides subsidized minimum-
wage, part-time community service- and
work-based job training for low-income,
unemployed people ages 55 and older. By
helping participants gain work experience
in community service activities at non-
profit and public facilities, including
schools, hospitals, day-care centers, and
senior centers, SCSEP aims to prepare
them for unsubsidized employment
opportunities.
SCSEP has been effective, but on a limited
scale.67 In Program Year (PY) 2015, just
over 40,000 older adults – out of millions
seeking work – participated in SCSEP
nationwide, and 41 percent of those who
exited the program during the year were
placed into unsubsidized employment.68
According to Jim Seith, a director at the
National Council on Aging, given the
participants’ demographic – some of
whom were long-term unemployed prior
to participating the program – this
transition rate is encouraging.69 However,
there is room for further improvement.
According to the PY 2015 participant
survey, the average rating by respondents
on the question of “How helpful has the
SCSEP been in preparing you for success
67 Interview with Jim Emerman, Executive Vice
President of Encore. February 2017.
68 U.S. Department of Labor Employment and
Training Administration (2015). https://www.doleta.
gov/Seniors/html_docs/Docs/Nationwide_QPR_
Final_PY_2015.pdf.
69 The Atlantic (2017). https://www.theatlantic.
com/business/archive/2017/03/trump-budget-
dol/519933/.
“One potential way to mitigate this issue
is to make Medicare the primary payer for
older workers’ healthcare costs regardless
of their employment status.”
– Richard Johnson, Director, Program on
Retirement Policy at the Urban Institute
17
in the workforce?” was 7.9 out of 10.
The survey also found that participants’
interests and needs were not fully
understood or met by local programs,
suggesting the necessity of engaging
participants in determining what skills
need to be developed for them to succeed
in the labor force. Computer training is one
area that requires particular improvement
as local programs failed to meet the
needs of 45 percent of participants.70
While experts consider SCSEP to play an
important role in older-adult employment,
the program has been constrained by
insufficient government funding and faces
an uncertain future.71
Tapping Productive Potential of
Older Workers
While job-placement programs for
older adults are often focused on those
with low incomes or the unemployed,
other programs are working to harness
productive opportunity resident in older
adults and to address the growing skills
gap that is already affecting major
productive sectors within the U.S.
economy. The need is increasingly
urgent as it is estimated that 2.7 million
jobs are likely to be needed due to
retirement within the existing labor
force, while more than 700,000 new
jobs will be created from economic
70 U.S. Department of Labor Employment &
Training Administration (2015). https://www.doleta.
gov/Seniors/pdf/Participant_Survey_Report/
PY2015_Nationwide_Participant_Survey_Report.
pdf.
71 Ibid.
growth.72 As the population continues to
age, harnessing older workers’ potential
will be critical to continued growth and
competitiveness.
Since 2014, the U.S. government has been
promoting phased retirement as part of
its strategy to transfer the institutional
knowledge of federal workers prior to the
anticipated wave of retirement of one-third
of its labor force by the end of fiscal year
2017. However, implementation of the
program has been relatively slow, partly
due to a lack of motivation of managers at
many federal agencies who see it as a form
of job-sharing that results in redundancy
and higher human resource costs.73
Within the private sector, management
is acknowledging the increasingly acute
nature of the skills gap. In a survey, 82
percent of CEOs believe the skills gap
will affect their ability to meet customer
demand, and 78 percent believe it
will impede their ability to remain
competitive.74 An increasing number of U.S.
employers are allowing phased retirement
by enabling older adults to reduce their
working hours while still harnessing
their productive potential. Program
specifics are tailored to the companies’
structures and workflows but generally
allow employees to reduce working hours
72 Deloitte. The Manufacturing Institute (2015).
http://www.themanufacturinginstitute.org/~/media
/827DBC76533942679A15EF7067A704CD.ashx.
73 University of Pennsylvania Wharton School
(2016). http://knowledge.wharton.upenn.edu/
article/the-case-for-phased-retirement/.
74 Deloitte. The Manufacturing Institute (2015).
http://www.themanufacturinginstitute.org/~/media
/827DBC76533942679A15EF7067A704CD.ashx.
18
while phasing in retirement benefits. The
managed phase-out of employees allows
employers to facilitate the transfer of skills
and institutional knowledge from older to
younger workers more systematically.
Manufacturing is a sector that will be
hit particularly hard, and companies
such as Steelcase – a Michigan-based
office furniture manufacturer – have
attempted to be proactive; the company
began implementing a phased retirement
program in 2012. Steelcase has 800
employees, 15 percent of whom are
eligible for retirement, and just over one-
third of them have elected to phase out.75
The company asks those interested in
participating to make a business case for
their phase-out, which must be a minimum
of six months and a maximum of two
years, and how it will benefit the company.
Decisions are then made on a case-by-
case basis.76
According to a 2015 report by the Society
for Human Resource Management, 14
percent of U.S. companies offered either
a formal or informal phased retirement
program in 2016, up from 10 percent in
2012.77 There are divergent views from
experts for the reason for the slow uptake,
as some contend that phased retirement
75 Bloomberg (2016). https://www.bloomberg.
com/news/articles/2016-12-16/american-firms-
want-to-keep-older-workers-a-bit-longer.
76 CNBC (2016). http://www.cnbc.
com/2016/08/19/employers-offer-flexible-
retirement-options-to-keep-older-workers.html.
77 Bloomberg (2016). https://www.bloomberg.
com/news/articles/2016-12-16/american-firms-
want-to-keep-older-workers-a-bit-longer.
is creating jobs for select groups of people
who could open employers up to legal
challenges,78 while others believe that age-
discrimination laws make it difficult to take
an older worker and put him in another
job for lower pay.79 Meanwhile, staying in
the same position while facing pay cuts
represents another disincentive for older
employees as well.80
In areas where the government and
private sector are falling short, NGOs
have stepped in to fill the gap and match
older adults with productive endeavors.
One notable program is the Encore
Fellowship, which aims to leverage older
adults’ talents to benefit society. Encore
Fellows, who tend to be age 50 or older,
are matched with nonprofits for six or
twelve months, working full- or part-time.
The fellowship’s goals are threefold: to
provide older people who are considering
transitioning into nonprofits with exposure
to the sector and relevant experience; to
change the perception of NGO employers
about older people and enable them to
value their talents; and to strengthen
NGOs’ capabilities to carry out their
missions and solve critical social issues
with the help of older workers’ talents.
The work of the fellows is wide-ranging,
depending on their experience and skill
78 Interview with Richard Johnson, Director of
Program on Retirement Policy of Urban Institute.
February 2017.
79 University of Pennsylvania Wharton School
(2016). http://knowledge.wharton.upenn.edu/
article/the-case-for-phased-retirement/.
80 Interview with Richard Johnson, Director of
Program on Retirement Policy of Urban Institute.
February 2017.
19
set, including volunteering for foster care
advocacy, literacy tutoring, and non-profit
management mentoring.81 Each fellow
earns a stipend (ranging from USD 20,000
to 25,000 per year), which is typically
financed by the NGOs. Some corporations,
like Intel and Hewlett-Packard, also pay for
partial or whole stipends for their retirees
who participate in the fellowship.82
Encore.org has selected and partnered
with several NGOs to host the fellowship
programs and so far has achieved
considerable success. Since the 2009
launch of two pilot projects in Silicon
81 Encore (Accessed 2017). http://encore.org/
story.
82 Interview with Jim Emerman, Executive Vice
President of Encore.org. February 2017.
Valley, the organization has placed more
than 1,500 fellows in 42 metropolitan
areas across the U.S., with 750 to 800
active fellows in 2017 alone. Cumulatively,
the fellows have contributed 1.5 million
hours of service at an estimated market
rate ranging from USD 70 to 200 per
hour – or USD 105 to 300 million in value.
Encore.org plans to expand the program
geographically over the next five years,
although it acknowledges that NGOs’
financial ability to pay for the stipend could
be the biggest challenge.83
83 Ibid.
20
The U.S. is a leader in digital technology
penetration, with an increase in technology
utilization by older Americans who
are seeking greater social connection,
assistance with personal tasks, support
in the workplace, and health and home
care. Internet access and the expansion
of broadband services, particularly into
rural areas, has been and continues to be
critical to service delivery. Recognizing
the growing share of older adults in the
total population and the associated
market opportunities, a range of startup
companies are developing solutions
specifically targeting this demographic.
However, the vast majority of older adults
need assistance understanding and
utilizing these technologies, and a range of
service organizations are developing tech-
related education and training programs
to help older adults effectively leverage
these new technologies and enhance their
quality of life.
Digital Technology Penetration
Like other countries, older Americans tend
to lag behind the younger population in
the adoption of digital technology, with
considerable variation among age groups.
As of 2015, 58 percent of people age
65 and older use the Internet, compared
with 84 percent for the population age
Technological Engagement
(Source: The Pew Research Center)
21
18 and older.84 Approximately 74 percent
of adults ages 65 through 69 are online,
while Internet adoption falls to 37 percent
among adults age 80 and older.85 The
divide is also exhibited in the ownership
and use of digital devices, including
computers, smart phones, and tablets.86
One exception is the e-book reader, which
is as popular among older adults as it is
with younger people, although the use is
concentrated among those with higher
levels of income and/or education.87
The Internet-penetration gap in the U.S. is
among the smallest within OECD countries
(only greater than those of Luxembourg,
Denmark, and Iceland).88 In spite of the
lower penetration of digital technology
compared with younger generations, older
Americans have been catching up. Between
2000 and 2015, the percentage of people
age 65 and older who use the Internet more
than quadrupled. As a result, the difference
in the Internet-penetration rate between
people age 65 and older and those age 18
and older shrank by nearly one-third.89
84 Pew (2015). Americans’ Internet Access:
2000 to 2015. http://www.pewinternet.
org/2015/06/26/americans-internet-
access-2000-2015/.
85 Pew (2014). http://www.pewinternet.
org/files/2014/04/PIP_Seniors-and-Tech-
Use_040314.pdf.
86 Pew (2015). The Demographic of Device
Ownership. http://www.pewinternet.
org/2015/10/29/the-demographics-of-device-
ownership/.
87 http://www.pewinternet.org/2014/04/03/
older-adults-and-technology-use/.
88 OECD Science, Technology and Industry
Scoreboard 2015.
89 Pew (2015). Americans’ Internet Access:
2000 to 2015. http://www.pewinternet.
org/2015/06/26/americans-internet-
access-2000-2015/.
The increased use of digital technology
among older adults is attributed to a
combination of drivers, including curiosity
about new technology, desire to stay in
touch with younger generations (especially
grandchildren), and the need to develop
job skills, among others.90 There has been
particularly notable growth in older adults’
use of social media – the percentage of
people age 65 and older who use social
media has more than tripled since 2010,91
indicating their interest in staying socially
connected through those new media
channels.
Nevertheless, a range of hurdles exist,
inhibiting older Americans’ adoption
of digital technologies. Not digitally
native, older people today often have
more difficulty learning to use new
technologies than do younger people.
Seventy-seven percent of older Americans
responding to a survey by the Pew
Research Center in 2013 indicated they
would need assistance learning to use a
new digital device, and 56 percent of
older Internet users said they would
need help using social networking sites.
Other major hurdles include physical
challenges using technology and
skeptical attitudes about the benefits
of it.92
90 Interview with Richard Adler, Distinguished
Fellow, Institute for the Future. February 2017.
91 Pew (2015). Social Media Usage: 2005–2015.
http://www.pewinternet.org/2015/10/08/social-
networking-usage-2005-2015/.
92 Pew (2014). Older Adults and Technology Use.
http://www.pewinternet.org/2014/04/03/older-
adults-and-technology-use/.
22
Promoting Older Adults’ Adoption of
Digital Technology
Internet access is one of the most
critical factors affecting technology
adoption among the aging population –
availability and cost of Internet access are
fundamental components determining
the degree to which seniors are able to
get online and benefit from technologies
that enhance social participation, reduce
isolation, improve transportation options,
and expand access to healthcare solutions.
Broadband Internet availability varies
considerably across urban and rural
areas in the United States, and expanded
coverage will be key to enabling the
proliferation and penetration of assistance
technologies. The new administration and
the Congress have called for ambitious
infrastructure investment to boost
economic growth, and the inclusion
of expanded broadband and other
connectivity provisions could help facilitate
access and undergird greater use of a
range of assistive technologies.
The federal government’s latest effort to
increase digital inclusion, the Recovery
Act-funded Broadband Technology
Opportunities Program (BTOP), lacked a
focus on older Americans. The Recovery
Act appropriated approximately USD 4
billion to 233 BTOP projects in 2009 and
2010, aiming to reduce the digital divide
by increasing broadband access and
adoption and providing digital training.
While nearly 90 percent of the BTOP
funds were allocated to infrastructure
projects, around USD 450 million were
granted to projects that helped to establish
new public computer facilities, upgrade
existing facilities, or promote Internet
use, particularly among vulnerable
populations.93 Among these 110 non-
infrastructure projects, fewer than one-
fifth provided services targeting seniors in
at least some capacity.94
In addition to limited access, older adults
lack spaces to learn and gain exposure
to digital technologies. Experts consider
face-to-face assistance to be particularly
important for older adults to learn new
technology. As older people tend to be
apprehensive about new technology,
personal instruction is particularly helpful
to overcome these initial fears. In addition,
a venue exclusively dedicated to older
people helps to eliminate peer pressure
from younger participants and to minimize
the associated anxiety commonly sensed
by older adults in Internet access or
training facilities that are open to the
general public.95 Senior centers and
social service agencies are increasingly
recognizing this need and are integrating
programs and classes designed to enhance
older adults’ digital competency and
fluency. In some select cases, centers are
exclusively dedicated to facilitating older
adults’ digital technology adoption.
93 U.S. Department of Commerce National
Telecommunications & Information Administration
(2016). https://www.ntia.doc.gov/files/ntia/
publications/ntia_btop_30th_qtrly_report.pdf.
94 U.S. Department of Commerce National
Telecommunications & Information Administration
(2012). https://www.ntia.doc.gov/blog/2012/
getting-older-americans-online.
95 Interview with Richard Adler, Distinguished
Fellow, Institute for the Future. February 2017.
23
One innovative program that adopts and
advances this philosophy is the Senior
Planet Exploration Center, launched by
Older Adult Technology Services (OATS), a
social-impact organization whose mission
is to harness the power of technology
to change the way people age. Opened
in 2013, the Senior Planet Exploration
Center is centrally located in Manhattan,
providing easy access to transportation
and a 2,700 square-foot retail-level space
that facilitates walk-ins. Outfitted with the
state-of-the-art digital technology, it is the
country’s first tech-themed community
center for older people. The Center not
only provides training courses on how
to use the Internet and devices like PCs
and iPads, as traditional training centers
do, but also teaches older people how to
use technology for social engagement.
OATS provides an extensive curriculum of
training courses at the Center’s 23 satellite
labs around the city.
The Center, together with its satellite
technology labs, represents a model
that aims to utilize digital technology to
help older adults stay connected, work,
and live independently in the digital era.
It is a comprehensive ecosystem that
includes facilities, curriculum, training staff,
volunteers, and various local partners.
The program has proven to be successful
and has received a positive response from
participants and the community; in the
Center’s most recent survey, 100 percent
of participants responded that they would
recommend the program to others.96 As
96 Older Adults Technology Services (OATS)
(Accessed 2017). https://oats.org/approach/.
a result, according to Thomas Kamber,
Founder and Executive Director of OATS,
the organization is seeking to replicate
and expand this model in other states and
outside the U.S.97 In 2015, OATS opened a
second Senior Planet Exploration Center
in Plattsburgh, a town in upstate New York.
OATS is also working with the government
of Israel to develop a model that is tailored
to the needs of older adults in that country.
Developing Technology for Older Adults
Aging baby boomers who have a strong
desire to maintain independence and
stay active while aging are increasingly
recognizing that digital technologies
can be leveraged toward these ends. As
a result, U.S. companies – ranging from
multinational corporations to start-ups –
have been developing new technologies
to tap into this fast-growing market.
97 Interview with Thomas Kamber, Founder and
Executive Director of OATS. February 2017.
“We have established this comprehensive
ecosystem of facilities, methodology, curriculum,
staff, and partners that are all aligned and
collaborating successfully. We are serving tens
of thousands of people in the New York City
every year. We are now seeking to take this great
ecosystem and get it into a new scale and new
geographies, and eventually make it into a social
movement.”
– Thomas Kamber, Founder and Executive
Director of OATS
24
According to a 2017 report by Aging in
Place Technology Watch, the market for
technology to assist aging adults in the
so-called Longevity Economy is expected
to grow rapidly. Though estimates range
considerably, explosive growth is expected
from USD 2 billion today to USD 20 to USD
30 in the next several years. Recognizing
the growing market opportunities for age-
friendly technologies, investors are funding
new start-ups, and tech companies are
rolling out new offerings to cater to the
growing demographic. Tech-enabled home
care start-ups, for example, attracted USD
200 million in funding in 2016.98
Indeed, experts agree that this burgeoning
market has been very private-sector-
driven, with relatively limited government
involvement.99 Given the heterogeneity
of the older adult population, with some
adults more or less familiar or adept with
its use, technologies must be developed
to accommodate a range of abilities.
New technologies were on display at
the 2017 South by Southwest (SXSW),
a cutting-edge tech conference, from
communication and engagement, safety,
and security to health and wellness.
Technologies such as voice-first interfaces
for apps and devices and Internet of Things
devices are increasingly popular. Some
of the companies that are expanding in
this rapidly evolving marketplace include
August Home, which turns a user’s smart
98 Aging in Place Technology Watch (2017).
https://www.ageinplacetech.com/files/aip/
Market%20Overview%202017%20Final.pdf.
99 Interviews with Richard Adler, Gretchen Alkema,
and Thomas Kamber. February 2017.
phone into a key to manage home access
from anywhere, allowing users to manage
codes for family members or service or
care providers. Another company, CareJOY,
is growing its online in-home care platform
and professional caregiver matchmaking,
while Clarity TV Listener provides
headphones for seniors, allowing them
to adjust the volume of any audio device
without affecting others.100
As President Obama’s Council of Advisors
on Science and Technology pointed out,
industry – with its ongoing work to improve
user interfaces and user experience
regardless of age – retains vast knowledge
and expertise in this area and can be a
vital partner in developing more tailored
technologies to older adults with variable
vision, memory, and dexterity.101 To further
encourage research and development
in this space, in 2015, the AARP and
JPMorgan launched a USD 40 million
AARP Innovation Fund to invest in early-to-
late-stage innovation-focused companies
whose mission is to improve the lives of
older adults.102
100 Aging in Place Technology Watch (2017).
https://www.ageinplacetech.com/blog/six-new-
technology-offerings-older-adults-march-2017.
101 “Report to the President: Independence,
Technology, and Connection in Older Age,”
Executive Office of the President, President’s
Council of Advisors on Science and Technology,
March 2016. https://www.broadinstitute.org/
files/sections/about/PCAST/2016%20pcast-
independence-tech-ging.pdf.
102 AARP (2015). https://press.aarp.
org/2015-10-01-AARP-J-P-Morgan-Asset-
Management-Create-First-of-its-Kind-Innovation-
Fund-to-Invest-in-Innovative-Companies-Focused-
on-Improving-the-Lives-of-People-50-Plus.
25
Despite the high level of engagement
from the business community in the
development of technology innovations
for older adults, experts note that
companies, particularly start-ups, tend
to underestimate the challenge of older
people actually adopting their technology.
Limited direct demand from older adults
themselves as well as underdeveloped
distribution channels remain barriers to
broader technology deployment.103 In light
of this reality, a few notable partnerships
have been formed between companies
and NGOs in an attempt to overcome
these challenges. One such effort has been
undertaken at Avenidas, a community-
based nonprofit organization that serves
103 Interview with Richard Adler, Distinguished
Fellow, Institute for the Future. February 2017.
multiple communities in the San Francisco
Bay Area. In 2016, Avenidas launched the
Generations Lab initiative, which takes
advantage of its proximity to Silicon Valley
tech hubs and creates a space where older
adults can increase their familiarity and
comfort with new technologies through
focus groups and pilot testing. In addition
to helping the older adults become more
adept with new technologies, it helps the
companies to refine their products and
develop technologies targeted toward
seniors.104
104 Avenidas. http://www.avenidas.org/assets/pdf/
GenerationsLab.pdf.
http://www.avenidas.org/services/generations-lab.
26
While older Americans’ lifespans have
improved over the past decade, they
remain below the average for high-
income countries. Researchers and public
health experts point to a range of factors
contributing to America’s relatively poor
and deteriorating health outcomes,
including education, income, job security,
food insecurity, and social safety net.
Poverty and the widening income gap are
major factors, as 17 percent of Americans
live in poverty, whereas the median for
OECD countries is only 9 percent.105 A
vicious cycle, growing poverty among
a larger share of the population affects
diet, lifestyle, stress, and ability to pay for
increasingly costly healthcare.
From 2005 through 2015, life expectancy
of Americans ages 60 through 64 on
average increased by 1.1 years to 23.4
years, while their healthy life expectancy
growth lagged behind, with an increase of
0.7 year to 17.7 years.106 By comparison,
the life expectancy of high-income
countries on average reached 24.2 years,
and the healthy life expectancy reached
nearly 19 years as of 2015. The U.S. also
has an estimated 5.7 years’ difference
between life expectancy and healthy life
expectancy among people age 60 through
105 The New Yorker (2014). http://www.newyorker.
com/tech/elements/why-america-is-losing-the-
health-race.
106 Institute for Health Metrics and Evaluation.
64, about half a year greater than the
high-income country average and also
greater than other major OECD countries,
including Japan, Canada, Germany, the UK,
and Korea.
Government-funded entities such as
the National Institutes of Health (NIH)
are increasingly focusing on prevention,
providing supplemental support to
organizations that help older adults to lead
healthier lives and enable them to stay
safely in their homes for longer. One major
effort is the Go4Life Campaign. Launched
by NIH in 2011, this exercise and physical-
activity campaign fosters the integration of
exercise and physical exercise into the lives
of older adults.107 As of 2015, the Go4Life
campaign had developed more than 250
public and private partners, many of whom
host Go4Life monthly activities – including
endurance, strength, balance, and flexibility
exercises, and more than 41,000 people
subscribe to the Go4Life e-mail updates.108
Not only do these types of public-private
partnerships expand the reach of services,
they are not completely reliant on
government dollars and therefore are less
vulnerable to funding cuts.
107 National Institute on Aging https://go4life.nia.
nih.gov/.
108 National Institute on Aging (2015). https://www.
nia.nih.gov/research/blog/2015/08/translating-
research-action-go4life-month-promotes-exercise.
Healthcare and Wellness
27
High Cost of Healthcare
Healthcare is exceptionally costly in
the U.S. and places significant financial
burdens on older Americans. United States
per capita healthcare spending is the
highest in the world and more than twice
the average of other developed countries,
according to 2016 research by the Peter G.
Peterson Foundation.109 According to the
Centers for Medicare & Medicaid Services,
U.S. health care spending hit USD 3.2
trillion or USD 9,990 per person.110 These
costs represented 17.8 percent of gross
domestic product (GDP) for 2015, having
109 Peter G. Peterson Foundation (2016). http://
www.pgpf.org/chart-archive/0006_health-care-
oecd.
110 https://www.cms.gov/research-statistics-
data-and-systems/statistics-trends-
and-reports/nationalhealthexpenddata/
nationalhealthaccountshistorical.html.
increased steadily from 13.3 percent in
2000.111 Spending rates are largely driven
by the more frequent use of medical
technology and higher healthcare prices
rather than more frequent visits.
Despite higher spending, research from
2015 demonstrates that Americans have
lower life expectancies and higher rates
of chronic illnesses than their OECD
counterparts.112 Healthcare expenditure
is the second largest expenditure for
Americans age 75 and older, after housing,
and it is the third largest expenditure for
Americans ages 65 through 74, after
111 National Health Expenditure (NHE)
Tables. https://www.cms.gov/research-
statistics-data-and-systems/statistics-trends-
and-reports/nationalhealthexpenddata/
nationalhealthaccountshistorical.html.
112 The Commonwealth Fund. http://www.
commonwealthfund.org/publications/issue-
briefs/2015/oct/us-health-care-from-a-global-
perspective.
(Source: OECD Statistics, 2016; Peter G. Peterson Foundation)113
113 The Peter G. Peterson Foundation (2016). http://www.pgpf.org/chart-archive/0006_health-care-oecd
28
housing and transportation.114 For older
Americans, out-of-pocket healthcare
expenditures reached USD 5,849 in
2013, representing a 50 percent increase
since 2003 and an increase over the
rate of inflation.115 Concerns about rising
healthcare costs and the associated fiscal
challenges for governments were noted
in almost all conversations with experts.
How to reform the U.S. healthcare system,
however, remains controversial and a
challenge for policymakers.
114 U.S. Bureau of Labor Statistics (2016). A Closer
Look at Spending Patterns of Older Americans.
Retrieved from http://www.bls.gov/opub/btn/
volume-5/pdf/spending-patterns-of-older-
americans.pdf.
115 Administration on Aging (2014). A Profile
of Older Americans. https://aoa.acl.gov/aging_
statistics/profile/2014/docs/2014-profile.pdf.
Need for Expanded Coverage
The United States does not have universal
healthcare coverage. While federal health
insurance programs for older adults
do exist, they only cover a portion of
healthcare-related costs. The federal
Medicare system is available for people age
65 or older, as well as other select groups,
and is generally provided in two parts: Part
A, which provides hospital insurance, and
Part B, which covers physician services.
Older adults are eligible for premium free
Part A if they are age 65 or older and they
or their spouse worked and paid Medicare
taxes for at least ten years. While most
older adults do not have to pay for Part A,
Part B coverage is optional, and people pay
for Part B if they want that coverage. Since
(Source: The Commonwealth Fund)116
116 The Commonwealth Fund (2015). http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/
us-health-care-from-a-global-perspective.
29
2006, basic prescription drug coverage
is included, with additional coverage
available at additional cost.117 Medigap, an
extra, private health insurance, is available
to be purchased to fill the coverage gap
between what Medicare covers and the
full cost of services. People on Medicare
can also receive their coverage through
private health plans, also called Medicare
Advantage plans or Part C. The majority
of these plans provide drug coverage, in
addition to hospital and physician coverage.
A means-tested program, Medicaid, is
also available for people whose income
is under a certain threshold, thus seniors
can be eligible for both Medicare and
Medicaid. To promote affordable and
better-quality care, especially for low-
income people, the U.S. enacted the
Affordable Care Act (ACA), also known as
Obamacare, in 2010. The ACA expanded
Medicaid to adults with income at or
below 138 percent of the federal poverty
line. Though only 32 states (including the
District of Columbia) are implementing
it118, the expansion has enabled more low-
income senior Americans to be eligible
for both Medicare and Medicaid. The ACA
has enrolled more than 10 million low-
income Americans into Medicaid and has
included reforms to improve affordability,
117 Medicare.gov. (Accessed 2017). https://www.
medicare.gov/sign-up-change-plans/decide-
how-to-get-medicare/whats-medicare/what-is-
medicare.html.
118 The Henry J. Kaiser Family Foundation. http://
kff.org/health-reform/state-indicator/state-
activity-around-expanding-medicaid-under-the-
affordable-care-act/?currentTimeframe=0&sortMo
del=%7B%22colId%22:%22Location%22,%22so
rt%22:%22asc%22%7D
quality, and availability of healthcare.119 As
implemented, the reform greatly improved
coverage for older Americans, particularly
those with pre-existing health conditions,
and helped them obtain better-quality care
while reducing out-of-pocket spending.120
Repeal or reform of the Affordable Care
Act is under debate in Congress in 2017.
Proposals floated thus far have indicated
significant cuts in coverage and have
generated widespread public backlash and
resistance from a range of stakeholders
and advocacy organizations.
Long-Term Care (LTC)
Demand for long-term care services
has been increasing and is expected to
rise rapidly in the coming decades. It is
estimated that 70 percent of adults
turning 65 in 2016 will eventually need
some form of long-term care and support
services.121 According to the Centers for
Disease Control and Prevention, 60.5
percent of Americans 65 and older (26.1
million) self-reported to have at least one
physical difficulty or complex activity
limitation.122
Around 3.5 percent of Americans age 65
and older lived in institutional settings such
119 ObamaCare Facts. http://obamacarefacts.com/
obamacare-facts/.
120 Obamacare Facts. http://obamacarefacts.com/
healthcare-reform-seniors-advantage/.
121 U.S. Department of Health and Human Services.
Who Needs Care? (Accessed 2017). http://
longtermcare.gov/the-basics/who-needs-care/.
122 Centers for Disease Control and Prevention
(accessed 2017). http://www.cdc.gov/nchs/
fastats/disability.htm.
30
as nursing homes in 2013.123 As those
numbers rise, the cost of institutional LTC
in the U.S. will place a significant financial
burden on older Americans. According to
a survey in 2016, a private room cost an
average of USD 253 per day, more than
USD 92,000 per year; and the average
cost for a semi-private room (i.e., a private
room that shares a bathroom with another)
was USD 225 per day and USD 82,125
per year.124 This high cost can exhaust
the savings of older Americans and their
families, only 10 percent of whom have
private LTC insurance, and even with these
plans, fully one-third of the expenditures
are still paid out of pocket.125
Medicaid is the only federal program
that provides financial support for long-
term care. The benefit covers the cost of
Medicaid-certificated nursing homes, and
depending on the state where the facility
is located, it may also cover the cost of
long-term care services that are provided
at home. Medicaid is managed between
the federal government and the states
and is a means-tested program for people
whose income is below a certain threshold,
leaving the middle-class at risk of not
being able to afford coverage.126
123 Administration on Aging (2014). A Profile
of Older Americans. https://aoa.acl.gov/aging_
statistics/profile/2014/docs/2014-profile.pdf.
124 U.S. News. How to Pay for Nursing Home Costs
(2016). http://health.usnews.com/wellness/
articles/2016-11-16/how-to-pay-for-nursing-
home-costs.
125 The U.S. National Bureau of Economic Research.
The Market for Long-Term Care Insurance. http://
www.nber.org/bah/winter05/w10989.html.
126 U.S. Department of Health and Human Services.
Medicaid Eligibility. http://longtermcare.gov/
medicare-medicaid-more/medicaid/medicaid-
eligibility/.
Growing Preference for Aging in Place
Given the cost of facilities and loss of
independence, among other factors, older
Americans tend to prefer to age in place.
As the population has aged, this has also
increased demand for at-home care and
care within communities. In a survey
conducted in 2010, three-quarters of
respondents expressed their preference to
stay in their current residence, and two-
thirds expressed their preference to remain
in their local community for as long as
possible.127 The shift toward aging in place
will generate high demand for home health
care workers. According to the Bureau of
Labor Statistics, 1.3 million new jobs in
the home healthcare field are expected to
be created through 2020 – a 69 percent
growth rate, compared with an average 14
percent growth rate across other sectors.128
However, much of the home healthcare
assistance that is being provided today
is falling outside the formal sector and
is unpaid, and the U.S. is less supportive
than most other developed countries in
providing direct financial support and time
away from work. Approximately 34 million
American family members and friends
(equivalent to roughly 14.3 percent of all
American adults) were providing unpaid
care to an adult age 50 or older in 2014.129
127 AARP (2010). Home and Community
Preference of the 45+ Population. http://assets.
aarp.org/rgcenter/general/home-community-
services-10.pdf.
128 MatrixCare (2016). http://www.matrixcare.
com/blog/growth-home-care-industry/.
129 AARP (2015). Caregiving in the U.S.
http://www.caregiving.org/wp-content/
uploads/2015/05/2015_CaregivingintheUS_Final-
Report-June-4_WEB.pdf.
31
The cost of providing free care for family
members is high for caregivers themselves,
carrying substantial financial, medical,
and emotional burdens. U.S. tax policy
provides up to USD 3,000 in deductions
for some caregiving expenses, but it is
not compensation. While the federal
Family Medical Leave Act (FMLA) requires
employers to give workers a minimum of
12 weeks of leave from their jobs to care
for family members, that time is unpaid.
Bills seeking to provide Social Security
earnings credits to caregivers who have
taken off work have been repeatedly
introduced in Congress, but never passed,
leaving informal caregivers vulnerable and
incurring substantial financial burdens.
In the absence of federal leadership, some
employers and organizations are attempting
to address this issue. The employer
coalition ReACT (Respect a Caregiver’s
Time), Care.com, and the Massachusetts
Institute of Technology joined forces to
generate the tools employers need to
effectively support employees who are
caregivers. In 2013, ReACT and Care.
com launched an employer-engagement
effort to drive broad employer adoption
of best practices and effective strategies
that support their employees’ caregiving
responsibilities.130 MIT and Care.com will
jointly conduct a case study based on
MIT’s approach to employer-supported
elder care.
Given a lack of community based
programs, particularly in rural areas,
the integration of technology for both
130 AARP (Accessed 2017). http://www.aarp.org/
react/.
institutional and in-home care setting
has the potential to significantly improve
older adults’ access to healthcare services
and facilitate aging in place. However,
at present, restrictions on physicians’
ability to deliver telemedicine services
across borders are limiting reach and
development of scalable business models
for health-related start-ups. According to
Dr. Elizabeth Mynatt of the Institute for
People and Technology, “Limitations on
cross-state telemedicine are still a real
challenge and one of the policy barriers
that, if addressed, could make a real
difference.” Policies that reduce market
barriers and strengthen the business
case for health-related technologies –
such as addressing existing cross-border
limitations on telemedicine – could
substantially increase older adults’ access
to needed care and improve health
outcomes and facilitate the trend toward
aging in place.
Growth and Potential of
Self-Directed Care
Self-directed care programs, which enable
older adults to more directly manage
and have greater choice over how they
spend their health-care dollars, have
demonstrated early success in the U.S.
“Limitations on cross-state telemedicine are still
a real challenge and one of the policy barriers
that, if addressed, could make a real difference.”
– Dr. Elizabeth Mynatt, Executive Director,
Institute for People and Technology IPaT
32
The programs have grown 30 percent
in the last three years alone to top over
one million in total enrollment, a level that
is higher than any other country in the
world, according to Applied Self Direction,
the technical assistance, training, and
membership arm of the National Resource
Center for Participant-Directed Services
(NRCPDS).131 Still, implementation among
states is uneven, and a general trend
toward Medicaid managed care models
where service companies are being
contracted to manage self-directed care
has presented challenges, particularly
with respect to outreach and clear
communication and education about self-
directed care options.
Self-directed care initiatives have
been an outgrowth of the Cash and
Counseling Program. They are paid for by
participating states under Medicaid and
have grown in popularity over the last
decade, with every state in the country
plus the District of Columbia now offering
a self-directed care program. Started in
1995, the Medicaid Cash and Counseling
Program, a state-level, long-term-care
assistance program, has provided direct
payments to Medicaid beneficiaries that
could be used to pay family members or
other caregivers compensation for the
time they spend providing care. In addition
to allowing for the payment of caregivers,
the program provides Medicaid
beneficiaries the option to manage a
flexible budget and to decide which
131 Interview with Applied Self Direction, March
2017.
healthcare-related goods and services
best meet their needs. An empirical
study has shown that this program
reduces the unmet needs of Medicaid
participants, improves the quality of life
for participants, and results in positive
health outcomes.132 The program is
available at the local level in covered
states; for example, in California, eligible
people can apply through “In Home
Supportive Services,” which are part of
the county-provided service system.133 In
addition, tax exemptions and tax benefits
may be available for a family caregiver
based on individual cases, which depends
on employment status, income, and other
qualifications.134
132 National Resources Center for Participant-
Directed Services. Retrieved from http://www.
bc.edu/schools/gssw/nrcpds/cash_and_
counseling.html.
133 Department of Social Services. Government
of California (Accessed 2017). http://www.cdss.
ca.gov/agedblinddisabled/pg1296.htm.
134 U.S. IRS. (Accessed 2017). https://www.irs.gov/
help-resources/tools-faqs/faqs-for-individuals/
frequently-asked-tax-questions-answers/irs-
procedures/for-caregivers?_ga=1.250473798.198
0189352.1481223511.
“Allowing seniors to be more in control of their
care decisions and the ways in which their care
dollars are spent represents a paradigm shift in
senior care and for the range of stakeholders, but
more work with stakeholders is needed to make
that shift effectively.”
– Merle Edwards-Orr, Senior Consultant at ASD.
33
According to Merle Edwards-Orr of
Applied Self Direction (ASD), “Allowing
seniors to be more in control of their
care decisions and the ways in which
their care dollars are spent represents
a paradigm shift in senior care and for
the range of stakeholders, but more
work with stakeholders is needed to
make that shift effectively.” Edwards-
Orr and other staff at ASD emphasized
that a shift in mindset is one of the most
significant barriers to greater adoption of
self-directed care, and underscored the
importance of stakeholders understanding
that the cash and counseling/self-directed
model is not just a system of giving cash,
but rather one that provides a strong
support architecture with program rules. It
provides counseling on spending options,
and financial services to manage those
resources. This is not always the case in
other countries. The U.S. system provides
a high level of support. While initial
programs have demonstrated success and
hold great promise as a means of enabling
older adults to age in place, experts note
that more research needs to be done on
costs to be able to demonstrate relative
efficiency to institutional care and to
garner the support needed to enable
broader rollout.135
135 Interview with Applied Self Direction, March
2017.
Potential for Technology to Enhance
Health and Well-Being
Where government programs are leaving
gaps, the market potential of aging of
baby boomers is increasingly drawing
interest and investment from the business
community. According to a 2016 study,
people age 50 and older represent an
annual consumption market of USD 5
trillion (including healthcare spending).136
The health market revenue generated
by this population is expected to total
USD 102 billion from 2015 through
2020, with one-third driven by innovative
new products and business models. 137
In addition, technology for the informal
caregiving to older adults is projected to
represent a total market of USD 279 billion
from 2016 through 2020.138
A range of products and services have
been developed to cater to diverse
needs of older adults and caregivers and
to support independent, active aging.
Some of the leaders in the space include
established brands, such as Walmart
and Walgreens, which have attempted to
provide services to improve accessibility
and cater to this age group. For example,
Walmart – a major retailer with stores
across the U.S. – has made advancements
connecting individuals with its telehealth
services provider, which offers customers
constant access to U.S. board-certified
136 AARP (2017). http://www.aarp.org/
technology/innovations/innovation-50-plus/
research/#longevity.
137 AARP (2016). 2016 Health Innovation Frontiers.
138 AARP (2016). Caregiving Innovation Frontiers.
34
doctors. Walgreens, a prominent
pharmacy, and WebMD, an online medical
information provider, have also developed
apps that enable users to track their
health-related choices and behaviors to
monitor wellness.
In addition to these established companies,
start-ups are building technology solutions
aimed at home care, remote monitoring
for family caregivers, and keeping seniors
connected.139 As part of its annual
HackFest, LeadingAge, an association of
6,000 not-for-profit organizations and
businesses representing a broad field of
aging services, will partner with Hewlett-
Packard using the latter’s 3D immersive
computing platform and federal open
data to challenge innovators to create
technology-driven tools to improve the
lives of older adults and their families.
139 Health Standards (2014). http://
healthstandards.com/blog/2014/09/18/trends-
aging-wearable-tech/.