This report examines the number and characteristics of older California residents who need help with basic personal care or have serious cognitive impairment and assesses their ability to afford paid long-term services and supports (LTSS). The analysis focuses on the “overlooked middle,” people who have too much income to qualify for Medi-Cal, California’s Medicaid program, but not enough income to cover paid LTSS out of pocket without cutting back on basic living expenses. This group includes people with income between 139 and 500 percent of the federal poverty level (FPL).

Why This Matters

Developing physical or cognitive limitations that require LTSS is one of the greatest risks older people face. Because of population aging, the number of those with LTSS needs is rapidly growing. Paid LTSS is already expensive, and its cost is rising faster than inflation. Both of these trends contribute to the increase in the number of people who cannot afford the LTSS they need. Understanding the scale of the problem and identifying those who are most at risk can help policymakers design adequate solutions.

What We Found

• Among Californians ages 50 and older, about 1.4 million, or 10 percent of this population, had LTSS needs in 2024 and 41 percent of them were part of the overlooked middle. The number of those with LTSS needs will roughly double by 2050, both in the general population and in the overlooked middle.
• LTSS needs are concentrated among low-income older adults. Among California residents ages 75 and older in 2024, 41 percent of those with income below 139 percent of the FPL had LTSS needs, compared with 28 percent of those with income between 139 and 500 percent of the FPL and 19 percent of those with income above 500 percent of the FPL.
• Women, unmarried adults, and Black adults are also more likely than other groups to develop LTSS needs.
• In 2024, only 37 percent of the overlooked middle could cover two years of high-intensity care for themselves, and 28 percent could cover it for themselves and their spouses. In 2050, these percentages are projected to decrease to 32 and 24, respectively.
• Many LTSS users become eligible for Medi-Cal because they spend down their resources on LTSS and other medical expenses. Among those who use LTSS in the overlooked middle, about one-third can expect to become eligible for Medi-Cal through this path.

How We Did It

Our results are based on the Urban Institute’s Dynamic Simulation of Income Model 4 (DYNASIM), which generates projections for a wide range of economic, demographic, and health outcomes, including activity limitations and cognitive impairment. In 2024, we set the cost of moderate paid LTSS at $50,000 annually and double that amount for high-intensity LTSS. We assume that the cost of LTSS increases at the same rate as average earnings. Our simulation makes only resources in excess of basic living expenses and $25,000 in emergency savings available for LTSS use. Basic living expenses come from the Elder Index™ for California.

For information about the LTSS Initiative and the full body of work, please click here.