Incentivising Aging in Place for Middle-Income Americans
Public policy and the private sector can work together to meet the future long-term care and housing needs of seniors.
- By Louis Tenenbaum
- Apr 21, 2022
A 2019 report from Health Affairs showed that by
2029 there would be 14.4 million middle-income seniors, 60 percent of
whom will have mobility limitations and 20 percent of whom will have
high health care and functional needs. While many of these seniors will
likely need the level of care provided in senior housing, Health Affairs
projects that 54 percent of seniors will not have sufficient financial
resources to pay for it.
There is currently no government policy in place for middle-income
Americans. This is why the HomesRenewed Coalition is working to
pass legislation that will create tax incentives for older homeowners to
make modifications to their homes so they can safely age at home.
The HomesRenewed Coalition was founded to engage the support of
stakeholders across industries like home modifications, homecare, and
technology to pass legislation and build an aging-in-place industry. Support
is widespread and comes from entities such as VGM Live at Home,
Lowes, Lifewise CHM, Lifeways Mobility, NSM, Age Safe America,
Collins Medical, Handyman Solutions, Seniors Home Services, Access
to independence, Accessible Systems, TrueBlue, Right at Home, and
Axxess, as well as aging issues advocates and consumers.
How This Effort Started
A few years back, solar collectors and hybrid cars were taking off,
thanks to tax incentives. This showed similar funding could become
available for aging in place. That’s important because modifying homes
was an issue that would continue to grow in importance as the number
of Americans over the age of 65 continued to grow.
Living in the DC area, I started working with Tom Sheridan, a top
lobbyist and founder of The Sheridan Group, on a strategy to propel
this issue forward. They wrote a position paper that outlined the problem
and a solution to implement legislation.
With the position paper in hand, we could start working on a bill. In
the past year, we spoke to 28 congressional offices, Senators and Representatives,
Republicans and Democrats alike. While there has been
strong support for the idea, the chaotic political scene and COVID-19
meant most offices had limited bandwidth to pick up another bill.
However, our efforts have been working. Two champions have been
identified: Reps. Charlie Crist (D-Fla.) and Tom Suozzi (D-N.Y.) have
both agreed to introduce the bill.
An important part of that process is the Congressional Budget Office
(CBO) score. The score indicates what Congressional economists think
it will cost to implement a bill over a 10-year window. The idea with
the home modifications tax incentive bill is that if it can be scored close
to “revenue neutral,” meaning the cost to the federal budget is equal or
close to equal to the benefits that will occur. If that is the case, a bill can
easily pass the House and Senate since there wouldn’t be any budget
concerns. Once a revenue-neutral bill is introduced, it can tag-along on
another bill that is already going forward.
Seeing the importance of this factor, the Coalition has published an
economics white paper that shows that the cost of lost tax revenues will
be balanced by people falling less, fewer injuries, and fewer trips to the
hospital, all of which cost the government money.
The proposed bill has made favorable progress and is expected to be
scored and introduced in February or March 2022. The bill language is
ready, and negotiations preparing for the CBO score continue. Once the
bill is introduced in the House and Senate, other members of Congress
will be approached and to sign on to the bill as well.
How The Incentives Work
The bill would incentivize homeowners to make home safety modifications
by making their 401k or IRA funds available without tax or
penalty. The bill recognizes two categories: For people above 59-and-a-half,
the bill will eliminate the tax on funds used to update your home
for aging in place. This is of particular interest for people who are over
70 or 71 and have a required minimum distribution of their 401Ks. If
they don’t really need to take money out of their 401Ks because of other
resources (pension, current income, etc.), this legislation will let them
spend money on modifications without paying taxes on it. For people
under 59-and-a-half who have untaxed savings, the bill would eliminate
the penalties for early withdrawal as well as the tax savings.
Those expected to be early adopters of the new incentives are people
who are already remodeling their homes. Homeowners over 50 years
old annually spend more than $130 billion on their homes. Once more
contractors become familiar with aging in place and help homeowners
save money, incentive use is expected to expand.
The bill would include basic items to help an aging population get
in and around their home, including better lighting, curbless showers,
ramps and doorhandles, as well as technology installations. An extensive
list of typical home modifications for aging-in-place items has been
recommended for eligibility.
The next three months are critical as the Coalition would like to
reach Congress before the mid-term elections. The bill’s two champions
realize the importance of the bill in getting the attention of the aging
voting population. You can help by joining the HomesRenewed Coalition.
There are different levels of support and opportunities to become a
sponsor. Funds are used for lobbying, administration, public relations,
and campaigns costs.
This article originally appeared in the Mar/Apr 2022 issue of HME Business.
About the Author
One of the first contractors to focus on aging in place, Louis Tenenbaum is the founder and CEO of the HomesRenewed Coalition (homesrenewedcoalition.com), which pursues public policies that will drive the development of the home modifications market.