Medicare and Medicaid together spent more than $12 billion on assisted living facilities in 2024, according to a federal oversight report released this week. The Government Accountability Office (GAO) outlined the scope of federal expenditures at these facilities, which provide housing and supportive services to older adults and people with disabilities.

The report, published July 2, revealed that Medicare alone accounted for approximately $8.5 billion covering nearly 830,000 beneficiaries in assisted living facilities. Most of this spending related to hospice care, while other services included home health visits offering nursing, physical, occupational, and speech therapy, as well as assessments and ancillary care such as nail care and psychotherapy. Medicaid contributed an additional $3.5 billion in federal funds for services delivered in assisted living settings. The report did not assess state-level Medicaid spending or outlays by other federal agencies like the Department of Housing and Urban Development or Veterans Affairs, which also support these residents.

Assisted living facilities differ from nursing homes primarily in the level of care provided; residents in assisted living typically maintain independent living but can receive assistance with daily activities such as bathing, eating, and toileting. Nursing homes usually offer more intensive nursing care, including around-the-clock services from licensed nurses and rehabilitation staff. While nursing homes are federally regulated through the Centers for Medicare & Medicaid Services (CMS) and subjected to routine inspections, assisted living facilities remain largely under state jurisdiction.

In response to the report's findings, Senators Elizabeth Warren and Kirsten Gillibrand, both Democrats, urged stronger federal oversight of assisted living facilities. Warren highlighted what she described as a significant oversight gap, emphasizing that billions in federal dollars flow to these facilities without federal mechanisms to ensure care quality. Gillibrand, ranking member of the Senate Aging Committee, called for improved protections, underscoring that residents and their families deserve assurance that taxpayer funds support safe and effective care.

The call for enhanced federal supervision echoes concerns raised by Warren and others over the past decade, including a 2018 GAO report that identified safety issues such as medication errors and resident deaths at assisted living facilities across 22 states. Warren has advocated for the establishment of federal reporting standards to improve transparency and accountability under the Biden administration.

Representatives of the assisted living industry cautioned against uniform federal regulatory approaches. LaShuan Bethea, executive director of the National Center for Assisted Living, stressed the diversity of residents’ needs and argued that state-level regulation combined with Medicaid waivers offers an appropriate framework. “A one-size-fits-all approach does not fit our assisted living residents,” Bethea said, noting that state agencies are best positioned to oversee these communities.

Affordability remains a significant concern for families seeking long-term care. A 2025 survey from CareScout found that the average annual cost for assisted living care was approximately $74,400, compared with roughly $115,000 for nursing home care. Meanwhile, an AARP report in March highlighted that costs for home care and assisted living services surged nearly 50% from 2019 to 2024, outpacing median income growth for senior households by a wide margin. Middle-class families, in particular, continue to face financial strain in accessing long-term care options.

The GAO report underscores the substantial federal investment in assisted living and fuels ongoing debate over how best to ensure quality and accountability while addressing affordability challenges.