The Lifetime Risk of Spousal Nursing Home Use and its Economic Impact on the Community-Dwelling Spouse

A single person in a nursing home is relatively well-protected financially from nursing home
expenses because Medicaid covers these once assets are depleted. Couples, however, are
less well protected, because the high cost of nursing homes rapidly depletes household assets,
possibly impoverishing the spouse living in the community, despite Medicaid provisions that
shield spousal assets up to some threshold. In this paper, we estimate the lifetime risk that one
spouse will reside in the community while the other resides in a nursing home, and the
distribution of the accumulated number of days spent in a nursing home and costs. We use data
from the longitudinal Health and Retirement Study and follow individuals and their spouses from
age 70 to death. We also examine how spousal nursing home use affects families’ financial
outcomes and to what extent Social Security income protects the community-residing spouse
from the adverse effects of spousal nursing home use. We find that a 70- to 74-year-old married
person who lives in the community faces a 34.3% chance that his or her spouse would move to
a nursing home before death. When they do, spouses spend about nine months, on average, in
nursing homes, and the average out-of-pocket cost is about $19,800 (2019 dollars). We find that
spousal nursing home use significantly decreases households’ assets and increases the risk of
further impoverishment. While Social Security income has an overall positive impact on families’
financial outcomes, it does not mitigate the financial effects of spousal nursing home use.