The assisted living sector touts itself as the most cost-effective option to provide quality-of-life care and services for the nation’s older adults. But that value comes at a cost, according to a new report.
Seniorly set out to determine how much assisted living communities actually cost and how those costs stack up against other options, including in-home care, by analyzing the average cost to consumers in all 50 states.
The price of assisted living, as with most business offerings, is increasing. Between 2021 and 2023, 30 states saw average costs for assisted living rise — with Wyoming (a 53% increase), West Virginia (46%) and New Hampshire (46%) seeing the biggest average increases, according to the report. The 2023 national average monthly cost of $4,401 is an 8% increase over 2021.
Costs charged to consumers actually fell in 15 states — Washington saw the biggest decline, at 16% — and remained relatively flat in six states, according to the report.
The average monthly rent for assisted living communities ranged from $2,946 in Louisiana to $8,248 in New Hampshire, where it was almost double the national average. Average monthly costs were more than $5,000 in 10 states, most of them concentrated in New England and the Mid-Atlantic, whereas the most affordable states included Indiana ($3,695), Iowa ($3,420) and South Dakota ($3,378).
Middle market highlighted
The cost of senior living is shining a spotlight on options for the “forgotten middle,” those whose incomes are too low for them to be able to afford current private-pay senior living options but too high for them to qualify for federal assistance.
A recent Milken Institute report, released in partnership with the National Investment Center for Seniors Housing & Care and CVS Health, projected that almost three-fourths of the estimated 16 million middle-income older adults who will be aged 75 or more years will be financially unprepared to afford housing to meet their needs in 2033. Even with home equity, the Milken researchers found, only 39% of those middle-income older adults will be able to afford assisted living.
Another recent study from the Harvard Joint Center for Housing Studies, released last month, found that only 13% of adults aged 75 or more years who are living alone across 97 US metro areas can afford to move into an assisted living community without starting to cash in their assets.
A NIC-funded 2019 study by NORC at the University of Chicago found that 54% of middle-income older adults will lack the financial resources to pay for senior housing and care in 2029, calling for a combination of public and private efforts to address the looming crisis.
The Seniorly study in part used data from the US Census Bureau’s 2022 median annual household income for states and savings rates from the Bureau of Economic Analysis. In doing so, Seniorly estimated that it would take the average American 17.2 years to save for one year of assisted living.
Using those data to look at the affordability of assisted living, Seniorly found that New Hampshire residents would need to save for 26.8 years to cover a single year of assisted living, with West Virginia (26.1 years), Mississippi (24.8 years), Wyoming (24.6 years) and Delaware (21.7 years) rounding out the top five states as far as timing.
Maryland came out at the other end of the spectrum, with residents needing to save an average of 11.7 years to cover one year of assisted living costs, followed by Utah (12.3 years), Minnesota (12.3 years), Georgia (13.3 years) and Washington (13.4 years).
In comparing assisted living with home care costs, Seniorly pointed to a report from Genworth Financial that put the monthly cost of a home health aide at $5,462, although wide variation exists between states. Minnesotans will pay the most for home care, with a median monthly cost of $7,333, compared with $3,472 for assisted living. West Virginia was the least expensive state for home health aides at $3,793 per month, compared with $4,846 average monthly rent for assisted living.
Some question value
The assisted living industry’s pricing structure and providers’ for-profit status were two topics examined in a New York Times and KFF article package in November. Costs also were discussed in a December Washington Post article package looking at the deaths of residents who had eloped from communities.
Those and other lay media investigations into the assisted living industry led the US Senate Special Committee on Aging to launch a review of the industry, including questions to three large providers, and to schedule a Jan. 25 hearing based on “significant concerns” about costs, staffing levels and resident safety.
