Senior Housing Funding Study Shows Major Funding Challenges

The National Investment Center for the Seniors Housing & Care Industry (NIC) released a comprehensive study of long-term care financing in the United States last month. The study addresses the combination of public- and private-sector funding that will be needed to pay for the nation’s growing care needs, especially when Baby Boomers reach their 70s and 80s. Robert G. Kramer, President of NIC, stated in their press release that “The real impact of long-term care needs won’t be felt until 2030-2050. How much will this care cost? How will the nation pay for it? And how can policymakers, seniors housing and care industry leaders, researchers and other decision-makers agree on the best plan to meet those needs? This Compendium will focus attention on the need for long-term care research and help stimulate a policy debate at the national level.”

Some bullet points from the report include:

  • 70% of seniors will need some kind of long-term care before they die
  • The number of people with disabilities will likely increase
  • The demand for long-term care services will double by 2040
  • Less than 20% of people will have private long-term care insurance because of its high/rising costs
  • The financial status of older people will improve over time

All the points are logical but the final point is a stretch. Does this mean that there level of expenditures will be the same or will state and federal entitlement programs rise in or a combination thereof? The press release notes that a major flaw of the study which they cannot get firm data on for future projects is the increase in costs and the “elasticity” of demand for such services based upon substitutability. The most interesting and poignant point of view to be pulled from the information presented is that the real strain won’t be really felt until 2030….but why do something today that can be put off until tomorrow?


For more information on the study and models for long-term care financing, click here.