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Many senior living operators had hoped that a new Congress and president in 2025 would mean a more favorable business and regulatory environment. But the headlines this week tell a very different story.
Global markets plunged on the news of the Trump Administration’s tariff policy; the S&P 500 experienced its biggest single-day loss since 2020.
Business leaders across all industries are affected by the tariffs and resulting market turmoil and uncertainty, and senior living is certainly not immune. But the sector also was hit with a much more direct development, which shows that even with a new administration in the White House, Democratic lawmakers are still pushing forward with scrutiny that began under President Biden. Specifically, a letter from three senators is calling for a governmental review of assisted living.
The letter, from Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.) and Kirsten Gillibrand (D-N.Y.), asks the Government Accountability Office (GAO) to review and update its 2018 report on state and federal oversight of assisted living facilities that participate in Medicaid. The letter specifically tasks the agency with reviewing how well CMS and state Medicaid programs care for and “protect the hundreds of thousands of seniors and individuals with disabilities who reside in these facilities.”
A request of this nature could take months or years to complete. And senior living industry industry associations believe it’s not likely the current administration would enhance federal oversight of assisted living communities that take Medicaid dollars.
Despite these caveats, this letter shows the spotlight is still very much on senior living operators in 2025. And while I agree the current administration and Congress probably won’t do much with current calls for more federal oversight, I think it’s only a matter of time before that changes, given the industry’s interest in such services to serve a wider group of older adults.
The industry is facing an “intensive education battle” in 2025 amid continued scrutiny from lawmakers, not to mention the general public, Argentum Senior Vice President of Public Policy Maggie Elehwany recently told SHN. As I’ve said before, I think that is both a risk and an opportunity. And I think that the senior living industry’s battle for better PR is only getting started.
In this week’s members-only SHN+ Update, I analyze the recent call for more oversight on Medicaid assisted living and offer the following takeaways:
- Inside recent oversight trends in assisted living
- Why lawmakers have renewed calls for federal oversight of assisted living in 2025
- The risk and opportunity of senior living’s ongoing “education battle”
AL oversight trends and what could come next
Although assisted living communities are subject to federal regulations relating to employment and discrimination, they lack the more extensive regulations governing skilled nursing operators. Instead, assisted living is largely regulated at the state level.
Medicaid doesn’t cover room and board costs, but certain states allow eligible residents to use Medicaid waivers to cover personal care services. Almost 18% of assisted living residents currently rely on Medicaid to cover daily care, according to AHCA/NCAL.
More than a quarter of states (29%) made regulatory or legislative changes that impacted assisted living residents, staff, and facility operations between July 2023, and July 2024, according to AHCA/NCAL stats. A total of 45 states and Washington, D.C., have infection control requirements for assisted living, while 25 have quality measurement, data collection, or quality management requirements for such operators.
This patchwork of regulations is partly why some lawmakers are so focused on enhancing federal oversight. According to the letter from Warren, Wyden and Gillibrand, that “lack of federal requirements and variation in state requirements may impede efforts to identify patterns of incidents in assisted living facilities that affect resident health and welfare, such as abuse and neglect, or other problems affecting residents, such as evictions.”
The senators cited the 2023 reporting from the Washington Post showing thousands of cases where senior living residents wandered away from their communities – reporting that eventually helped prompt a 2024 Senate review that included testimony from Gardant Co-President Julie Simpkins.
A 2018 GAO report found that the majority of state Medicaid agencies didn’t track “critical incidents” affecting Medicaid beneficiaries living in assisted living communities. The recent letter from the trio of lawmakers is meant to change that, and they are seeking more information on how states oversee residents’ health and wellness, how they track deficiencies and other incidents, how CMS is implementing requirements for state Medicaid programs and whether there is a need for more federal oversight of assisted living.
These kinds of calls for oversight aren’t particularly new, and Warren and others have urged the federal government to consider more oversight of assisted living in the past. But I think they will only continue and grow as more baby boomers move into senior housing – or don’t, due to affordability issues.
For now, there has not been much political will to enact assisted living oversight at the federal level. But as more boomers move into senior living communities, they will no doubt expect legislators to address their needs.
I also think about the number of senior living operators growing with the middle-market in mind. As Simpkins noted during the Senate hearing last year, programs like Medicaid waivers could help operators lower their rates and widen the number of people who can afford their services.
“With a rapidly growing elderly population, we need a public and private partnership to incentivize more providers to develop these models,” she said.
I agree – but I think the tradeoff to these kinds of arrangements is allowing more oversight in assisted living.
The catch here could be that Medicaid is very much in the crosshairs of drastic federal budget cuts that are being pursued. So, assisted living providers involved in the Medicaid market are in a bad position, facing the prospect of potential reductions in Medicaid revenue or changes to waiver programs due to the GOP-led budget cuts, as well as Democratic calls for tighter oversight and regulation. The real losers here could be older adults, if these actions from both sides of the aisle stifle Medicaid-related middle-market innovations while squeezing existing providers in the Medicaid market so much that they pause growth, shrink their footprints, go out of business, or pivot to different models, further limiting access to AL at a lower price point.
Senior living’s education fight just getting started
To me, the current spotlight on senior living is unwelcome but could be turned to providers’ advantage.
On the one hand, senior living operators find themselves grappling with a skeptical public about the quality and cost of their services. That is not an easy conversation to have, especially as operators justify why senior living is worth its relatively high cost.
Polling from Gallup in 2023 showed that more than 40% of Americans give nursing homes a D or F rating. To be clear, this was a poll about nursing homes, not assisted living. Although I suspect their perception of senior living is slightly better given the more lifestyle-oriented nature of private-pay communities, I also assume recent stories from the Post and elsewhere have led to a less than stellar reputation in the public’s eyes–and as Skilled Nursing News recently reported, consumers still largely conflate nursing homes with other types of senior living and care, as reflected in their internet search habits.
On the other hand, that spotlight on the industry means operators have a chance to showcase what they do best. If senior living companies truly can demonstrate that their care is relatively affordable and high-quality for the services they offer, I think they have a real opportunity to turn around the conversation.
To that end, some senior living operators, including Sonida Senior Living (NYSE: SNDA) and Brookdale Senior Living (NYSE: BKD) already are trying to appeal directly to consumers by growing in-house marketing and relying less on national third-party referral sources.
As I noted, I think the industry’s public perception battle is only getting started, and will intensify in the coming years as more older adults learn about senior living services firsthand. The challenge for operators will be to not hide from the spotlight, but to thrive in it and show the public they are well-equipped to care for a new generation of residents.
