For Better or Worse, Midterm Political Sea Change Means More Eyes on Senior Living, Long-Term Care
Democrats won governor and congressional races across the country during the U.S. midterms in a political sea change. That will likely mean more eyes on the senior living industry.
The midterm elections Tuesday ended in a political landslide for Democrats. Members of the party flipped seats previously held by Republicans in states like Texas, Georgia, Maine, Kansas and South Carolina. Now, Democrats control both the House of Representatives and the Senate and more than half of governor seats across the country, not to mention new footholds in multiple state governments previously dominated by Republicans.
Some of the scrutiny of the senior living industry in the last few years has stemmed from lawmakers such as Elizabeth Warren (D-Mass.), who have not shied away from highlighting the assisted living sector’s importance in the health care continuum but lack of federal oversight.
A new Democratic majority could embolden those kinds of efforts, and already, lawmakers seem to have their collective eye on long-term care. Last month, Democrats on the U.S. Senate Committee on Finance sought input on policies that would create a universal home care benefit under Medicare and Medicaid programs.
Some in the industry, like Nexus Insights Founder Bob Kramer, believe that Democratic control of Congress could indeed lead to more scrutiny for senior living, but not entirely for operators. Instead, Kramer believes that lawmakers could put senior living owners and big investors under the spotlight.
“It’s going to mean more scrutiny of capital providers, in particular,” he told Senior Housing News.
Along with more scrutiny pointed at senior living capital, Kramer believes that a Democratic Congress could also mean more money for healthcare, and potentially senior living operators by extension. A newly blue majority in the House and Senate could allocate more federal dollars to care by attempting to weaken or undo the looming roughly $1 trillion in federal Medicaid cuts and work requirements set into law under the so-called “One Big Beautiful Bill.” With fewer federal dollars flowing to states, some senior living operators had worried such cuts could force tough decisions for state waiver programs that residents use to pay for their stay in senior housing, for example.
“There will be more money, broadly, for healthcare. That also means for long-term care and potentially for home and community-based services through restoration of the ACA subsidies and through significant rollback of Medicaid cuts, the steepest of which were due to kick in in these later years,” Kramer said. “So, I think there will be more government dollars for healthcare and for long-term care.”
While President Donald Trump still will hold the veto pen over any Congressional action, Kramer believes last night’s midterm elections reflected “populist outrage” against deep-pocketed companies disconnected from the lives of average Americans. That could put pressure on the president and Republicans to find common ground on legislation that helps with kitchen-table issues, he said.
Industry on the radar of lawmakers
If Democrats use their new majority to narrow their collective focus on long-term care, it wouldn’t be the first time. Lawmakers have had the industry in their sights since at least the start of the Covid-19 pandemic, according to ASHA President and CEO David Schless. But what’s different now is that Democrats have the power to impact the senior living industry by advancing certain policies.
“High on the list will be addressing the perceived harms of private equity and REIT investment in healthcare, which may extend to assisted living,” Schless told SHN.
He sees restoring and expanding enhanced Affordable Care Act premium subsidies and expanding the child tax credit expansion as first on Democrats’ priority list. In doing so, he believes they will offset new costs through proposed corporate tax reforms and a wealth tax along with repealing carried interest and pass-through deductions.
“We also know there will be focused attention on tax policies that will help return the Social Security Trust Fund to solvency, which is currently on track to force a 20% cutback if nothing is done by 2034,” Schless said.
He added: “We also know the Senate Finance Committee will take a hard look at expanding long-term care benefits in home care as well as investigating quality improvement measures in nursing homes and reintroducing minimum staffing requirements.”
Schless also believes Democrats will eye strengthening labor protections and union organizing efforts in the workforce.
“We do think there may be an opportunity to focus on reasonable immigration policies to address the workforce shortage now that the border has been secured as well as other workforces development initiatives,” Schless said.
The political change could lead to new questions regarding senior housing ownership, investment, staffing and quality, Argentum President and CEO James Balda said.
“We welcome a thoughtful conversation, but it is important that policymakers recognize that senior living is a distinct, primarily state-regulated and privately financed model that should not simply be treated as an institutional setting,” Balda told SHN.
Industry associations also are keeping their eye on changes at the state level, such as new governors or newly divided state governments, that could affect policies and issues impacting senior living. They include new oversight of ownership and private investment, efforts regarding housing affordability, liability, consumer protections, and expanding access to care.
But the change is not all about oversight alone. Major demographic changes, housing challenges and meeting the needs older adults “will require policies that expand access to quality senior living and support the investment and development necessary to increase supply,” Balda said.
“Our focus at both the federal and state levels will be on advancing practical solutions that improve affordability, strengthen the workforce, encourage investment and development, and do not unintentionally make it harder to build the housing and care infrastructure older Americans will need,” he added.
Leaders of public companies in wait-and-see mode
During earnings calls this week, leaders of public companies indicated they were waiting to see the impacts of the midterm election. Despite the prospect of more oversight, leaders of companies that held post-midterms earnings calls, Omega Healthcare Investors (NYSE: OHI) and LTC Properties (NYSE: LTC) weren’t fazed and they see limited risk that that new regulations are coming in the near-term.
“We expected that this might happen, that the House and the Senate might both go blue, and obviously Democrats have a concentration on regulatory changes,” said Omega SVP, Data, Intelligence and Government Relations Megan Krull during the company’s third-quarter earnings call Tuesday. “But we’ve dealt with that before in the past. It’s not a new issue for us, and quite frankly, we’re somewhat aligned in that the Democrats are really looking from a regulatory perspective to make sure that there’s quality of care in nursing.”
She added: “It becomes how that regulation does get implemented, and making sure that we have a voice in that.”
Similarly, LTC Properties Co-CEO Pam Kessler noted that there is “always” regulatory risk inherent in senior housing and care.
“I don’t see that changing significantly now versus in the past,” Kessler said. “There’s been bipartisan pushback … from the more progressive side, and I think, at the end of the day, cooler heads prevail on that, and a lot of it is headline noise. But it’s certainly something that we keep an eye on.”
