The Government Monitors America’s Aging Population

The Department of Health and Human Services (HHS) measures data on growth of elderly populations seeking assisted living care. For smart investors, HHS data is not just government data thrown online, but it is interpreted as a flagged market for growth and demand for senior living. In 2004, HHS reported that an upswing in senior housing was experienced near capacity in major markets, and some national cities and locations experienced an increase in senior populations as much as 214%.

“[G]rowth was considerably higher between 1998 and 2000 – 30 percent nationwide – much of that increase resulted from high growth rates in a few states (214 percent in Delaware; 144 percent in Iowa, 139 percent in New Jersey, and 119 percent in Wisconsin); and ten states with growth rates between 40 percent and 100 percent (Alaska, Arizona, Kansas, Indiana, Massachusetts, Minnesota, Nebraska, New York, South Dakota, and Texas). Between 2000 and 2002, only two states, Arizona and Kansas, reported growth above 40 percent, and three–Nebraska, Nevada, and New Jersey–above 36 percent.”  Read the report here.

Obamacare, or the Affordable Care Act, and How it Addresses Long-term Assistance for Seniors

Currently, the political climate shows there is bipartisan consensus that further action relating to the Affordable Care Act (ACA) would not likely affect the end-user of retirement centers and senior living development, stating that any repeal of community assisted living programs would not affect deficits. This is to mean that the market will be as steady as in decades past as federal healthcare subsidies have not functioned to displace the typical funding sources from private insurers; however, pending legislation should be observed with caution.

Paying for Seniors’ Long-term Care

Notwithstanding legislative climates, economic indicators show that supply and demand are independent of Congress and therefore would be unrelated to any ACA provisional shifts. The Congressional Budget Office’s (CBO) memorandum among congressional leadership provided, “Repeal of the Community Living Assistance Services and Supports (CLASS) provisions would have no impact on projected federal deficits.” The ACA established the CLASS program as a national, voluntary long-term care insurance program for providing community living assistance services and support financed through insurance premiums. Two Octobers ago, Secretary of Health and Human Services Kathleen Sebelius and her office explained to the public that the CLASS program was unsustainable, and she that she hadn’t “see[n] a viable path forward for CLASS implementation at this time.” CBO’s baseline incorporates no spending or premium collections for the CLASS program. Consequently,legislation to repeal the CLASS program is estimated to have no budgetary effect relative to current law.”

However, this should be considered an opportunity, not a setback, and this also means that our aging national population will drive the government to address a viable and sustainable program for financial assistance for suitable senior housing. In addition to evolving government legislation, frontline measures must be taken by businesses in senior care, and they must adapt payment methods necessary through the resulting government subsidies and programs for long-term senior care.

As HHS data and legislation suggest, the senior housing market has weathered the turmoil of Congressional debates and the tectonic shifts of recent legislation impacting seniors. But don’t forget this is an opportunity waiting to be realized for the senior housing market. This is because the senior housing market remains a steadfast, reliable real-estate investment product within real estate and capital markets, and Cambridge Realty Capital’s programs provide those resources necessary for realizing such deals and opportunities.

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