Is it really as big of a deal as we make it out to be?

By Steve Moran

So . . . I want to say I have no idea if I am right about this, but I have been thinking quite a bit about the lack of and need for affordable senior living. On the heels of NIC it occurred to me that maybe, just maybe, it is a completely 100% bogus problem.

Conventional Wisdom

Conventional wisdom says there are huge numbers of senior who need/want senior living but can’t afford it. Furthermore, there is a belief that Boomers have been much better spenders than savers.This means that when the time comes for them to move into senior living, their bank accounts will be mostly dry and their retirement income puny. Therefore, this need will grow exponentially.

Why This May Be Bogus Thinking

I have been 100% in sync with this thinking . . . but it may be totally bogus. Here is why:

  • We are still largely selling a product that almost no one wants to purchase. Looking at those who can afford what we are selling, only 10%, nationally, are buying what we are selling. So 90% percent are choosing, either deliberately or by default, something else; living with relatives, home care services, cohousing . . . something.

  • The federal and state governments have a deep commitment to keep people out of senior living communities, which to them means skilled nursing. The logic is simple, providing caregiving services at home is a ton cheaper than in a nursing home.

  • The majority of states do have some form of Medicaid waiver program that subsidizes the care of low income seniors in assisted living.  In a few states the program is robust and presumably working well for the state and for seniors. What is challenging is that in most states this is not the case and no one in those states seems to care . . . suggesting the problem is not so big.

  • The biggest single reason it may be bogus is this: There are no horror stories of seniors being left in the streets or wasting away in nursing homes — or dying in their homes for lack of food, ADLs, socialization, activity programs, 24/7 emergency response — because they wanted/needed affordable senior living and it was not available.

The Marketplace Works

The marketplace is imperfect but overall it works pretty well. When there is a real problem, some smart people start looking at the problem not so much as a problem but as an opportunity to make some money and grow a business. We are not seeing a more serious push for affordable senior living because it is, at this point, only a problem in our mind’s eye.

Don’t get me wrong. If someone were to develop an affordable model, there would likely be seniors to move into those communities. But that alone does not mean we have a real problem.