The Nursing Home Boom

This post is an entry for our $25,000 scholarship contest. The post was created by Summer Davis and may not always reflect the views of JW Surety Bonds.


“Each day, 10,000 baby boomers retire and begin receiving Medicare and Social Security benefits.”

–Sen. Rob Portman (R-Ohio),  The Wall Street Journal

The post-World War II G.I. Bill, passed in 1944, granted returning soldiers benefits like lower mortgages for their homes, lower interest rates on their businesses, and paid tuitions at universities. The immediate effect was a bolstered American economy and the idealistic “Leave It to Beaver” 50’s suburban life. An unforeseen, long-term consequence was the population explosion that followed. When the costs of owning a house, starting a business, and receiving an education are covered, people will focus on building a family. In the 40’s, everyone decided to do just that – all at the same time.

There were a whopping 76 million Americans born between 1946 and 1964. Combined with the swell of immigrants who will contribute to the baby-boomer population, there are approximately 80 million adults who are able to retire now – and who will continue to retire over a 19-year period. In 2010, 13 percent of the U.S. population was 65 or older. By 2030, that number will rise to 20 percent. Where will we keep our retired citizens? While the Social Security Administration and Medicaid struggle with the financial burden of covering 80 million people, one industry will experience a growth not unlike that of the 1940’s population – nursing homes.

Are nursing homes going to be popping up on every street corner like Starbucks? No, because there is always the option of caring for your loved ones at home or in a community (an increasingly popular option as public policy shifts to the “rebalancing” of the long-term care system). And certain demographics are more likely to avoid nursing homes. For instance, the population of nursing homes is overwhelmingly female – only 32.8% of residents in 2011 were male. And 78.9% of residents in 2011were whites of non-Hispanic origin, meaning non-whites make up 21.1% of nursing home residents. However, there was an increase of 54.9% in the number of Hispanics and an increase of 54.1% in the number of Asians in nursing homes, measured from 1999-2008, and a 10.8% increase of black residents. An increase in immigration led to this statistic, especially the entrance of elderly immigrants into the country, as well as easier access to long-term care for minorities. Another interesting fact? Overweight adults are more likely to be admitted to a nursing home. Currently, more than one-third of adults are obese – that’s one-third of adults that have a higher chance of moving into a nursing home after they retire.

The nursing home industry will experience a growth in business as baby boomers reach retirement age. While other options are available, a heightened focus on offering minorities greater access to the services of nursing homes will add to the number of residents. In this way, the fate of the nursing home industry is bound to the fate of immigration reform and economic reform in America. The policies we vote on now, although seemingly unrelated, will affect our lifestyles when we reach retirement age.

Sandy is an in-house author and surety bond expert at JW Surety bonds, the largest bond agency in the U.S.

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