How Baby Boomers are Defining the Long-Term Care Space
Content from this blog post was originally published in Insurance Journal West’s November issue.
A recent article published by the Insurance Journal titled, “Young Agents and the Senior Market” showcases the changes and opportunities in the long-term care space for both entrepreneurs and insurance professionals as a result of the aging baby boomer generation. With 40 million people in the U.S. over the age of 65, which is expected to increase at least 20 percent over the next 25 years, more demand is placed on long-term care (LTC) industry.
One of the biggest trends affecting the LTC industry today is how it caters to those demands. Over the past few years, many “progressive facilities” have moved toward a hospitality-focused business model as opposed to a standard nursing home atmosphere. Baby boomers want quality and services. They want the benefits of living in a green building facility with gardens, solar power and everything in between. Think a hotel or college campus. Many of today’s progressive facilities also offer the entire continuum of care for aging individuals. This way, as residents continue to age, there are services and options available for the transition.
Marty Butler, Senior Vice President, Practice Leader of the senior living team at Assurance, says it best in the article, “Consolidation within the LTC market is probably the number one trend right now. The industry as a whole, including home health and hospice, is growing by leaps and bounds.” However, the biggest challenge in the LTC industry is finding facilities that are open to accept new residents as the demand is extremely high. As a result, consolidation is becoming common to combat the government’s changes to reimbursement rates for nursing homes. A drop in interest rates, available capital and increased demand in occupancy rates is driving that trend. In consolidation, it’s important to be mindful of the professional liability coverage that the seller has. Any known incident should be reported and an extended reporting period should be given to the insured to ensure a time frame for reporting claims after the sale is set.
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