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The senior living industry has a real chance to differentiate itself against the concept of aging at home, not only through a different lifestyle, but through cost.
Earlier this month, a report from the American Seniors Housing Association (ASHA) and prepared by ATI Advisory noted that many families still believe that accessing home care is easy and cost-effective compared to senior living. And for many of them, that is true, according to the report’s authors.
As senior living operators well know, services for aging people are not universal in nature. As older adults grow older, their acuity needs typically increase, necessitating a higher – and usually more costly – level of care. What started as personal care and help with a few activities of daily living can turn into home health care in a matter of a few years.
It’s a simple fact that growing old and accessing senior care in the U.S. is expensive, no matter how you slice it. One month of 40-hour-a-week home care and a month of assisted living rent cost about the same on paper. Data from the most recent Genworth Cost of Care survey showed those services cost $6,300 per month and about $6,400 per month, respectively.
When factoring other costs of living at home such as mortgage payments, property taxes, utilities, groceries and maintenance, living at home can quickly match or exceed the cost of assisted living, the ASHA report authors wrote. As far as senior living operators have come differentiating their communities and lifestyles from their at-home competitors in recent years, I still think the industry is failing to set itself apart with regard to the cost of its services relative to the home.
Making all of this hard is that, at least in the short- and medium-term, developing new middle-market senior housing is still out of reach for most companies seeking to do it. I still think the senior living industry can do a better job advocating for its current value to prospective residents, even while it can’t substantially expand the number of truly middle-market communities today.
In this members-only SHN+ Update, I analyze the recent ASHA home care report, new Pew Research data and other information to offer the following takeaways:
- Senior living is not necessarily more expensive than home-based services
- Why I think senior living operators struggle to compete against the idea of living at home
- How operators can better present their value proposition to prospective residents
Cost of senior living versus living at home
For years, senior living operators have differentiated themselves from living at home by showing off their saltwater pools and chandeliers, access to new friends and activities and high-quality clinical services. I think resort-style amenities, access to social networks and quality care are obviously appealing to prospects, but not if they think they can’t afford it.
Pew Research data from earlier this year showed that most older adults still want to live in their homes. Just 18% of adults age 65 and older responding to a Pew survey said they want to move to assisted living, compared to 60% who said they want to live at home with a caregiver.
The survey showed that 28% of adults with higher incomes said they wanted to move into assisted living when they need care, compared with 19% of those with middle incomes and 13% of those with lower incomes who said the same. That data says to me that cost is a significant factor for older adults when factoring a move to assisted living.
More recent Pew Research cited data from AARP showing there are about 56 million U.S. workers of all ages who do not have access to workplace retirement plans. The researchers also cited a 2022 Federal Reserve survey showing that about 75% of non-retired Americans had some retirement savings but fewer than a third believe they are “on track for retirement.”
The gap between the number of people who have saved for retirement and the number of people who believe they are on track for it indicates that many people don’t feel like they’ll have enough to live on when it comes time to retire.
Furthermore, as senior living operators raised rates to match care expenses in the last six years, it “led some residents to perceive reduced value in their communities, though many residents report that their perception of value has not changed,” read a separate, more recent ASHA report on resident financial profiles.
More than a third of older adults who want to stay in their home with a caregiver (37%) see that outcome as extremely or very likely in the future, while 18% said it’s not likely to happen, according to Pew data. A similar number of older adults who want to move into assisted living see that outcome as extremely or very likely in the future (35%) while 16% say it’s not likely to happen.
About 59% of respondents to a 2025 survey from Whittington Consulting said they thought senior living communities are not affordable, while just under half said they think senior living would cost them “much more” than aging in their own homes.
Senior living operators know well that cost perceptions don’t always match up with reality. On paper, the monthly rate of assisted living and at-home care might be the same, but senior living is actually sometimes the cheaper option when factoring in paid caregiving, housing-related expenses, and caregiver strain, according to the ASHA report.
According to the ASHA report, 12 hours a day of home care, totaling 84 hours per week, costs roughly $12,000 per month, which is twice the cost of assisted living in multiple markets. Around-the-clock home care can exceed $20,000 per month.
Via ASHA “Home Care vs. Senior Living Research Study”So, if it’s not much more expensive or even cheaper, why don’t more people see a move into assisted living as a more likely outcome?
For older adults already aging at home, I think the status quo is a powerful and underlooked factor. An otherwise sensible move to senior living can seem like a financial risk for an older adult currently making ends meet, even if their current living situations aren’t perfect from a budgetary perspective. If both senior living and living at home are perceived as having the same cost, it’s no surprise to me that someone would choose the devil they know over the devil they don’t, so to speak.
I think the sense of control, or lack thereof, is a big factor. Many older adults still can’t picture themselves moving into senior living for the simple fact that they don’t know what goes on inside communities’ four walls. During the Senior Housing News Sales and Marketing Conference earlier this year, multiple panelists noted their prospective residents still think their private-pay communities are akin to nursing homes. To me, that is even more evidence there’s still a big gap between what older adults think senior living is and what it actually is.
Presenting the value of senior living lies in education
Penetration rates for senior living have long hovered at about 10% to 11%. If operators can’t serve enough older adults, penetration rates could actually decline, not grow in the years ahead.
Developing more middle-market senior housing and coming up with more creative payment solutions is part of the puzzle. Both are important, but I think operators also can present the value of senior living as it exists today in a better way, and not just with web-based cost of living calculators.
The ASHA report, hosted on its Where You Live Matters site, is part of that effort. The report concludes with a handful of scenarios for older adults exploring senior living, such as a healthy 80-year-old planning ahead for independence or a relatively healthy 79-year-old with strong family support. The older adult in the first hypothetical example moved into independent living to maintain her lifestyle and avoid loneliness, while the second stayed at home.
Of course, as the old saying goes, you can lead a horse to water but you can’t make it drink. In a similar sense, ASHA and other industry stakeholders can provide all of this information on their websites and online, but prospective residents must actually read and take note of it.
The harder task for the senior living industry now is to educate members of the public who aren’t as engaged in the senior living discussion or planning for a move. Regardless of reality, the recent survey data from AARP, Pew and Whittington Consulting tells me that the public still believes that senior living communities are prohibitively expensive and out of reach.
It’s a good step to offer resources for curious prospects planning for the future. But I think the industry must widen its focus through education. To that end, marketing and advertising can only go so far.
Earlier this year, Arnold Whitman and Vitality Society Founder Meredith Oppenheim proposed a new framework for increasing senior living penetration rates that would shift operator priorities from occupancy to improved health outcomes of residents, data, broadening access and affordability and rebuilding trust. That would include “demonstration pilots” and showing data that the “measures the quality of life” senior living operators can provide.
And indeed, that is what some senior living operators are doing as they grapple with the fact that their services are seen as just not affordable for a swath of their prospects. The senior living industry must “shift from selling units to explaining outcomes” in order to show the benefits of their services compared with the cost, Priority Life Care CEO Sevy Petras told my colleague Austin Montgomery earlier this year.
At the end of the day, I think there are multiple avenues for operators to better justify – not to mention help prospective residents understand – the cost of their services. But it will require the senior living industry to get a little more proactive about what they offer and why it’s a good value relative to the high cost.