Senior Living Costs Spike, But What About the Value?

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The onset of the pandemic brought intense staffing challenges across all forms of long-term senior care facilities. A 2022 survey from the Agency for Healthcare Administration (AHCA) found that 87% of nursing homes experienced moderate to high levels of staffing shortages and another 98% faced challenges in hiring new staff.

In response, facilities often relied on hiring contract workers at a higher cost than full-time employees which increased operating costs. Today those staffing pressures have eased, but the cost of renting in a senior living facility continues to rise. Just because the price has risen, doesn’t always mean the value rises along with it.

Cost vs value

The National Council on Aging estimates the average cost of assisted living in the United States to be $4,500 per month or $54,000 annually. Increased levels of care (such as memory care for seniors with Alzheimer's and Dementia) typically raise costs even more to an average of $6,160 per month. In addition to a base level of care, the NCOA report found that rents at assisted living facilities typically increase on an annual basis by about 4 to 10 percent.

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These costs are a significant strain on the budget for most families so of course family decision makers want to see added value paired with increased price. According to J.D. Power’s 2023 US Senior Living Satisfaction Study, the rise of senior living costs is on par with the NCOA’s estimations at a 5.4% increase recorded in this year’s third quarter. However, the overall satisfaction levels for the category “price paid for services received” declined from the previous year. On a scale of 1000, satisfaction with value ranked at just 604 points – a 15-point decrease from 2022.

Staffing satisfaction rebounds

Senior living facility staff is an invaluable element in the satisfaction of a resident’s family members. They’re the ones interacting and caring for your loved ones every day, so when the level of care isn’t present, it’s noticeable.

J.D. Power’s study found that staff is twice as important as cost when it comes to a family decision-maker’s overall satisfaction. As such, many long-term care facilities have made focused improvements in this area. In an assessment of the survey results, Andrea Stokes, hospitality and senior living practice lead at J.D. Power, shared her thoughts.

“Coming out of the pandemic, the major challenge for senior living providers was staffing. The good news is that we’re no longer seeing declines in resident satisfaction linked directly to staff reductions or facilities management.”

In 2023, the average satisfaction with community staff rose by 11 points and was one of the largest driving factors in the overall satisfaction score of 837 out of 1000. The next leading factor was community activities which grew by nine points since last year.

Senior living rankings

Out of the four major assisted living providers in the U.S., these are the top-ranked companies for resident satisfaction:

Life Care Services: Highest-ranked for the fifth year in a row. 827 out of 1000.
Five Star Senior Living: 744 out of 1000

The three top-ranked assisted living and memory care providers for family member satisfaction include:

Life Care Services: 869 out of 1000
Atria Senior Living: 855 out of 1000
Frontier Management: 846 out of 1000

Seychelle is a seasoned financial professional turned personal finance writer. She’s passionate about empowering people to make smart financial decisions by combining 10 years of finance industry experience with solid research and a wealth of knowledge. Seychelle is also a Nav-certified credit and lending expert who has explored money topics such as debt consolidation, budgeting, credit, and lending in her work for publications including GOBankingRates, LendEDU, and Credible.