The American assisted living industry faces its most significant congressional scrutiny in two decades, as U.S. Senator Bob Casey (D-PA), Chairman of the Senate Special Committee on Aging, launched a sweeping inquiry into resident concerns regarding cost, transparency, and adequacy of care.
The demand for assisted living is booming in the United States, driven by a greying population seeking support while maintaining independence. While most long-term care is delivered at home, many people elect to move into assisted living. As of 2023, over 818,800 Americans reside in assisted living facilities, representing a vital sector of long-term care. This figure highlights a 2% share of the senior population over 65 choosing this option.
According to the LTC NEWS Cost of Care Calculator, the cost of all long-term care, including assisted living, is rising sharply throughout the United States. The median base cost in the U.S. is now $52,082 per year. Traditional health insurance, including Medicare and supplements, will not pay for assisted living or most long-term care. Long-Term Care Insurance will pay for all types of care, including assisted living. In 2023, the major insurance companies paid $14.1 billion in benefits to policyholders of LTC Insurance.
Memory care, catering to individuals with dementia, forms a significant portion of this landscape. Around 17% of assisted living residents reside in dedicated memory care units, according to the National Center for Assisted Living (NCAL).
The number of facilities offering this care is also on the rise. Over 30,600 active assisted living facilities operate in the U.S., housing nearly 1.2 million residents. This data shows an 8.5% increase in assisted living communities compared to a decade ago, based on National Investment Center for Seniors Housing & Care (NIC) reports.
This growth reflects the evolving needs of an aging population seeking assistance with daily living activities while maintaining a degree of independence and autonomy. The expanding assisted living landscape highlights the increasing importance of this sector in providing care for America's seniors.
Hearing Highlights Gaps in Regulation and Affordability
The hearing, which Casey described as "the start of the biggest review of assisted living by the Senate in 20 years," featured testimonies from an advocate, an industry representative, and a loved one detailing their experiences. It painted a picture of an industry with significant gaps in federal regulation and affordability issues.
Sen. Casey emphasized the crucial role of public input in informing the committee's investigation. He urged families to share their experiences navigating the assisted living landscape through a dedicated website and email address.
I want to know more about what people are paying for assisted living and to have people tell their stories. We want to hear from you about the true cost of assisted living and understand whether families have the information — the information that they need — to make this difficult financial and health care decision for a family member and for the family.
Sen. Mike Braun (R-IN), the highest-ranking Republican on the committee, voiced support for the investigation while also advising against measures that could increase the financial strain on the federal budget.
When you're promoting transparency, it can bring odd partners together.
In a prepared statement, Braun states that at the heart of the challenges that assisted living facilities face is a chronic workforce shortage that continues to grow.
An overburdened workforce can lead to issues with quality of care, neglect, and safety, resulting in the tragedies that we have all heard about. The federal government should make it easier for people to enter the healthcare workforce and for families to take care of their loved ones.
Braun pointed out that in his state, Indiana, there are state regulations in place for assisted living.
Unlike nursing homes that are regulated by both federal and state agencies, assisted living facilities are primarily regulated by states. To increase safety and transparency, Indiana requires staffing ratios, dementia training and maintains a website that discloses reports and enforcement actions.
Unpredictable and Rising Costs
Casey emphasized the need for clearer estimates and transparency around costs, as residents often face unexpected expenses based on care needs.
Plus, unlike nursing homes, federal oversight for assisted living facilities is lacking. Assisted living facilities lack robust federal regulations, raising concerns by some about quality of care and accountability.
Citing research showing that 80% of adults cannot afford four years in assisted living, Casey stressed the need for solutions to address this growing public concern.
Long-term care costs in all areas have risen sharply due to many factors, including increasing demand, labor shortages, higher labor costs, and other inflationary factors. While LTC Insurance will pay for assisted living and other types of long-term care services, many people fail to think about long-term care planning until it is too late. LTC Insurance is medically underwritten, so a potential policyholder must have reasonably good health in order to get a policy.
Some people cannot afford Long-Term Care Insurance. While many people overestimate the actual insurance cost, insurance is not appropriate for some people. This means if someone wants care in an assisted living facility, those costs will drain assets, often quickly.
Industry Under Scrutiny
The committee also sent letters to three of the largest corporate owners of assisted living facilities, requesting data and information on pricing models, staffing levels, and resident outcomes. Additionally, a request was made to the Government Accountability Office for a comprehensive study of assisted living industry practices.
In a press statement, the National Center for Assisted Living, a prominent industry association, declared that the general standard of facilities remains robust and is most effectively regulated at the state level. The organization recognized that the current system for financing long-term care in the U.S. is flawed, rendering assisted living financially inaccessible for a considerable number of seniors.
Sen. Casey indicated that the committee will continue deliberating based on information gathered and public input. This scrutiny could potentially lead to new federal regulations, industry reforms, and increased transparency to improve the assisted living experience for residents and their families.
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Contributor since April 22nd, 2021
With aging comes a heightened likelihood of facing physical and cognitive difficulties. Aging with a disability introduces additional intricacies into everyday life, underscoring the importance of thoughtful long-term care planning to preserve your quality of life.
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