As the “baby boom” generation edges closer toward retirement years, running alongside the large, post-World War II demographic will be an increase in the demand for elder care services.
Through 2016, revenues for elder care are expected to reach $319.5 billion, growing at a rate of 5.2% each year, according to a recent study from Cleveland-based industry market research firm Freedonia Group, Inc.
Driving this growth are a number of factors. First and foremost is the observation that as the average life expectancy continuously increases in the United States, then so will the number of older individuals requiring elder care as they age.
As more Americans age in the coming years, there will be a responding demand in the need for elder care services, the study notes. Limiting this sustained growth will be continued efforts on the state and federal level to curb Medicare and Medicaid spending.
Despite potential threats to lessen spending from these assistance programs, the study expects Medicaid will continue being the leading payment source for the industry. Medicare, on the other hand, will experience faster annual growths, and out-of-pocket spending will also continue being critical in the continuing care and assisted living industries.
Second, economic boosts in the housing market will also provide seniors with easier access and affordability to care.
Though 2012 marked promising progress toward a full recovery, an upturn in the housing market will also play a pivotal role in continued revenue growth, suggests Freedonia.
With many Americans wanting to age at home, future advancements for home and community-based services will be driven by state and federal efforts to shift Medicaid payments away from skilled nursing facilities.
However, continuing care revenues will continue growing, the study suggests, as a rebound in the housing market will enable many seniors to sell their homes to pay for steep entry fees associated with continuing care communities.
Written by Jason Oliva