The Assisted Living Facility (ALF) is a housing facility that tends to the need of the elderly population who choose to live in an environment that takes care of all their needs. It provides excellent services for seniors and elderly who wish to live independently but would also like to have someone take care with their daily requirements.
The ALF is a growing industry and is supposed to grow even further in the coming years due to the late ‘baby boomers’ falling into this category. This industry is primarily divided into two categories – continuing care retirement communities which provides on-site facilities and home for the elderly which does not have the care facility.
ALF in North Carolina
North Carolina’s unique demography presents a challenge and an opportunity to its economic system. This state is perfectly divided into two generations, with the median age being 38.7 years, making it the 20th oldest state in the US.
As per the reports released in 2016, Utah is the youngest state while Maine is the oldest state with the median age being 30.8 and 44.6 years respectively.
“Baby Boomers” stepping onto a new stage
As of 2017, it was estimated that more than 59 million individuals belonged to the age group of 65 and above, which is approximately 15% of the total population in the US. In comparison, North Carolina has over 1.4 million individuals belonging to the same age group attributing a little over 14.3% of the total state’s population. The rise in the number of this age group is estimated to increase at almost 3 million a year.
This presents a challenge to the whole US economic system where a significantly large proportion of the population has not prepared themselves financially for this stage.
“Baby Boomers in North Carolina”
Overall, most of the counties in North Carolina saw an increase in the median age with the highest being recorded for Brunswick County – 52.9 years
Costs associated with Assisted Living Facilities (ALF)
The monthly costs associated with Assisted Living are slightly higher than living at home but it does not consider the expenses which are borne by the elderly when they live at home like medical, entertainment and other living expenses.
The costs for ALF are also increasing steadily with the rise in costs of medical and health assisted living for elderlyhcare services, real estate costs associated with the facility and an increase in health insurance premiums.
Paying the ALF
There are a few options through which the ALF can be paid. Rates for each source varies depending on the state and income of the individual person. One can also opt to pay out of their own account if they have a significant amount of savings.
An individual moving to an ALF can choose to sell off their home in order to receive the sum which can be used for paying the facility. If the home is outrightly owned by the individual the transaction becomes easier. However, if the home is on a mortgage then the individual might have to consider a reverse mortgage.
Individuals who have assets worth under $80,000 can qualify for the Veteran’s Aid and Attendance Pension. This is a good source which pays a significant sum every month towards the ALF. There are other state and federal level programs which an individual can opt.
This program is applicable to both state and federal level which helps the senior in paying some of its cost provided they meet the income requirements. The minimum requirements vary from state to state. State-based Medicaid covers many community-based services like personal care and supportive services. However, it does not pay for room and board costs.
Medicare is a federal program that provides assistance to those who are above 65 years. However, it does not cover assisted living if an individual owns the Original Medicare. There is some flexibility which is available if an individual has an extended advantage plan. This plan provides some services like hospital readmissions and access to Medicare Part B therapy.
Economic Impact of Aging Baby Boomers
With the growing population of Baby Boomers, the costs associated with the Assisted Living industry has also increased. This, in turn, has made some deep impact on the US economy.
- With a monthly service fee of $3,550 amounting to annual revenue of $3.2 million, it is the 47th largest economy in the US.
- Not counting the smaller units of Assisted Living facilities, it gives employment to nearly 400,000 individuals
- Over 11,000 Assisted Living communities have more than 80 residents per facility
- Total annual gross revenue is $33.1 billion
- Total annual wages and salaries is $10.6 billion
As more baby boomers start falling into this category, the larger will this industry grow. By 2030, the early Gen X will also fall into the category of 65+ making it even bigger than before. The economic impact of the senior cohort is sizable. Research indicates that direct spending on healthcare and on consumer goods and services will increase.
The Assisted Living Facility is a growing sector which will continue to grow sharply in the coming years. It will have implication on both the US economy and society. Economically it will surpass some of the industries while socially it will become a hub for the elderly where they can experience a new life.
- ALF will have to incorporate new social entertainment sections to meet the demands of the growing baby boomers.
- Costs associated with ALF will increase. This means the baby boomers and the early Gen-X will have to plan ahead to ensure all their requirements are met post retirement.
- The facilities have to be located in neighbourhood having low crime rates and good connectivity to urban centers.
- ALF will have to adopt new methods to meet the demands of the affluent elderly individuals. It is imperative that they have provisions for accommodating the grandchildren or children of the affluent individuals.
As the US transitions towards a senior population, the ALF will become a valuable asset in terms of economic growth and opportunity.