The US spends billions on these senior homes in 'huge oversight gap'

The federal health programs Medicare and Medicaid spent more than $12 billion on assisted living facilities for older adults and people with disabilities, according to a new federal oversight report.

The U.S. Government Accountability Office report published July 2 offered detailed findings on federal spending at assisted living facilities, which older adults are increasingly choosing for long-term care. Based on the report's findings of lucrative federal spending, Democrat Sens. Elizabeth Warren and Kirsten Gillibrand called for tougher oversight at these facilities.

Warren said the report identified a "huge oversight gap."

"Assisted living facilities receive billions in federal dollars, but there is no federal role in ensuring that they are providing high-quality care,” Warren said in an email. “Residents of these facilities deserve better, and that starts by making sure that assisted living facilities are making good use of taxpayer dollars and are not leaving our seniors out to dry.”

What's the difference between a nursing home and assisted living facility?

Assisted living facilities house and provide care to seniors and some people with disabilities. Though people typically live independently at these facilities, they can get help with daily activities such as bathing, eating and using the restroom.

Nursing homes often are staffed by nursing assistants as well as higher-skilled positions such as licensed practical nurses or registered nurses. Nursing home residents generally have access to around-the-clock nursing or rehabilitation services.

Though Medicaid in many states pays for nursing homes for low-income residents, little was known about how much the federal government spends on assisted living facilities. The GAO report quantified Centers for Medicare & Medicaid Services spending at these homes.

Medicare spent $8.5 billion on behalf of nearly 830,000 people at assisted living facilities in 2024, the report said. Most of the spending was for hospice care, but residents also received "home health" services such as nursing and physical, occupational and speech therapy. Medicare also paid for home visits to assess people, and for nail care and psychotherapy.

The report also identified $3.5 billion in federal Medicaid spending for services provided in assisted living facilities in 2024. The report didn't tally how much states paid to assisted living facilities.

The GAO report said the $12 billion figure didn't tally spending from other federal agencies such as Housing and Urban Development and Veterans Affairs, which also pay for room and board and other costs at assisted living facilities. It also didn't include spending by private insurance companies that administer Medicare Advantage plans.

Democrats call for more oversight

Assisted living facilities are typically regulated by states. Nursing homes are regulated by the federal Centers for Medicare & Medicaid Services and subject to routine inspections.

Gillibrand, the top Democrat on the Senate Aging Committee, vowed to bolster regulation and oversight of such facilities.

"Seniors and their families deserve protection and peace of mind when seeking care in assisted living facilities," Gillibrand said via email. "Though these facilities receive at least $12 billion a year in taxpayer funding, they are subject to little federal oversight to guarantee resident safety. That’s unacceptable."

Warren has sought more oversight of assisted living centers for nearly a decade. Along with other senators, she requested a 2018 GAO report that documented safety concerns such as medication errors and deaths at facilities in 22 states.

During President Joe Biden's administration, Warren called for federal reporting standards for problems at assisted living facilities.

LaShuan Bethea, executive director of the National Center for Assisted Living, an industry group, said assisted living is a high-quality option for more than 1 million Americans.

Bethea said the GAO report reinforces the idea that a wide variety of assisted living options − and state regulation through Medicaid waivers – is the best approach.

“A one-size-fits-all approach does not fit our assisted living residents who each have unique needs," Bethea said. "States are best equipped to manage their Medicaid programs and oversee assisted living communities."

Affordability concerns persist

Assisted living facilities typically are less expensive than nursing homes for seniors seeking long-term care, according to CareScout's Cost of Care Survey in 2025.

The survey found U.S. families spend on average $74,400 a year for care at an assisted living center. The average annual tab for nursing home care was nearly $115,000 for a semi-private room and slightly more for a private room.

Middle-class families have struggled to pay for long-term care, according to a report from AARP in March.

AARP reported that home care and assisted-living costs for older adults and people with disabilities have surged over the past five years. The AARP report said the cost of the most common type of long-term services – home care and assisted living services − surged nearly 50% from 2019 through 2024, far outpacing median income growth of 22% for senior households.