Assisted Living Facility Market Expected to Grow in New Year

The significant aging population is increasing the demand for independent living facilities.

By HFT Staff

The U.S. assisted living facility market is expected to grow at a compound annual growth rate (CAGR) of 5 percent during 2022-2027. 

Increased shifting towards independent living by adult older people is delivering high market growth opportunities to the assisted living facility market. The significant aging population is increasing the demand for independent living facilities. In 2019, around 92 percent of the U.S. senior population showed a stabilized occupancy trend for independent living. In recent years, the key players and emerging players have increased their focus on high-end communities, changing the U.S. assisted living facility market landscape. 

Assisted living construction has significantly increased in the past few years and boosted the market growth. The key companies in the assisted living facility market are involved in inorganic growth strategies. The merger and acquisition strategies accelerate the assisted living community's expansion and geographical presence at the industry level. 

Industry regulations 

The regulatory environment continues to intensify in multiple ways. Local officials, state and federal are increasingly focusing on enforcing laws and regulations that directly impact assisted living facilities. 

The higher impact is particularly true for multi-community operators. Some rules and regulations that affect state and local laws impact licensure protect the consumer against misleading scenarios, and influence assisted living communities' management, properties, and equipment. 

Most assisted living communities rely on reimbursement from government funding and programs, such as Medicare and Medicaid, for some of the company's revenues. Medicare and Medicaid do not fully cover assisted living costs or rent, but Medicaid covers the medical expenses at an assisted living facility. Medicare and Medicaid represent some reimbursement helpful for assisted living facilities and seniors who reside in the assisted living facilities. 

Among the report’s other highlights: 

  • More than 28,900 assisted living communities operating in the United States. Healthcare expenditure by seniors is increased in the United States. In 2020, healthcare expenditure rose to $4.1 trillion. This growth is substantially high compared to 2019. In 2022, more than 800,000 U,S, seniors will be living in assisted living communities 
  • The assisted living facilities are undergoing consolidation post-COVID-19 pandemic. Many chains-based assisted living facilities are adding more facilities or breaking them down into smaller entities to handle operational costs and implement changes faster. Smaller independent assisted living facilities are running the industry changes better than the chains. Post-pandemic, the scenario has changed. The number of people enrolling in nursing and long-term care facilities is decreasing. But there is a moderate increase in the number of people registering for the as assisted living facilities. This number of expected to increase in the future 
  • Many U.S.-based assisted living facility organizations are engaged in innovation initiatives. New technologies, ideas and operating models to improve assisted living care facilities and enhance resident engagement and experience are being introduced in the market. With the help of advanced technology platforms, such as remote monitoring, telemedicine and connected devices, assisted living facilities expect to identify solutions to reduced complexity and increased productivity at an affordable cost for people. 

December 28, 2022

Topic Area: Industry News , Maintenance and Operations

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