With the new year comes a long-awaited demographic milestone: in 2026, the oldest baby boomers finally turn 80, heralding the silver tsunami that promises to reshape senior living. Over the coming year, providers will face intense pressures and foster exciting innovations as they strive to deliver quality care to the next generation of customers.
“In 2026, long term care is sitting at the fulcrum of change: on one side are the pressures of the here-and-now; on the other, the blue-sky potential of what lies ahead,” said Clifton Porter II, president and CEO of AHCA/NCAL. “Our constant challenge is to deliver for our residents in our current environment while also shaping the future. AHCA is focused on helping providers strengthen our workforce, address concerns around Medicare Advantage, and rationalize the regulatory environment. As we pursue a better way forward, long term care will come out stronger, wiser and even more prepared to answer the nation’s call for care.”
As they answer that call, providers will negotiate a complex array of trends and challenges, including evolving care models, cutting-edge new technologies, and dynamic new design paradigms.
Mastering New Care Models
One of the most significant trends is the growth of value-based care and managed care models, fueled by the expansion of Medicare Advantage (MA) and Managed Medicaid. In early January, the accounting and business advisory firm Plante Moran released its 2026 Skilled Nursing Facility Medicare Benchmarking Report, based on data from 2023-2024. “MA penetration has surpassed traditional Medicare enrollment and is expected to keep climbing,” the report found, meaning tighter margins and higher administrative burdens for providers.
Denise Leonard, a partner at Plante Moran who specializes in senior care, acknowledged that it can be challenging to navigate this new terrain. When it comes to Medicare Advantage, she recommends providers ensure their entire teams have a granular understanding of their Medicare contracts. “They need to know which days and services are covered and work with the plan if additional days or services are required,” she said. “Otherwise, you’re likely not going to get paid for those services.”
As providers are likely all too aware, MA rates have stagnated and in many cases are simply too low to cover expenses. “I would recommend that people be proactive with those contract negotiations—ask for rate increases, share your five-star ratings, your quality results, and what your hospital readmissions look like,” Leonard advised. “Be prepared, going into those meetings, with your data and your story, and also understand financially what your expenses look like. What is your margin on providing care? I find often that the team or the facility don’t have the contract data, and it’s important for them to understand that.”
Much of Leonard’s advice for providers embracing value-based care (VBC) models boils down to something simple but vital: do your homework. “Organizations need to be intentional and educated on the drivers of these different VBC programs, because they’re all different,” she said. (AHCA/NCAL has rolled out provider toolkits for some of the new VBP models.)
Depending on the program’s metrics, providers may need to adjust their workflows accordingly. Adapting to a program that relies on staffing data, for example, would require timely, accurate PBJ submissions—an area where Leonard sees a surprising number of organizations fall short, for reasons as simple as technology hiccups or a staff member going on vacation.
“Invest in staff education and have a backup plan during times of vacation, medical leave, or turnover,” she advised. “We often see these being the issues when an organization suddenly has a dip in their quality results.”
Plante Moran’s data point to another means of bringing in additional revenue while improving clinical outcomes: participating in Institutional Special Needs Plans, or I-SNPs, which are MA plans for individuals who require long term institutional-level care. I-SNP enrollment has seen marked growth over the last decade, from 50,000 in 2015 to 130,000 in 2025, according to the report. For providers, these plans help create value-based revenue streams inaccessible in fee-for-service models.
“There are definitely a lot of benefits to an I-SNP,” Leonard said. “This is an opportunity to be compensated for the great care that you're already providing. It means working to keep the individual in the facility versus sending them to the hospital, skilling in place, and improving outcomes.”
In addition to the revenue opportunities, I-SNPs typically place a nurse practitioner in the facility, benefitting residents and staff alike. “The families appreciate having a nurse practitioner involved,” Leonard explained. “From the nursing staff standpoint, it's a great opportunity to have them learn from someone with incredible clinical knowledge.”
Clinical Diversification and High-Acuity Care
As the population ages, the complexity of care required in long term care settings will grow accordingly. “For nursing homes, the headline trend is acuity and complexity,” said Mark Prifogle, chair of the American College of Health Care Administrators (ACHCA). “Providers are increasingly asked to serve residents with greater clinical and behavioral needs, while demonstrating measurable outcomes and reliably managing transitions to and from hospitals."
With greater complexity come greater costs. To meet evolving clinical needs while mitigating financial pressures, providers are finding new, innovative ways of diversifying their revenue streams. As the Plante Moran report highlights, some expansions include the addition of high-acuity services like memory care, ventilator units, and onsite dialysis. “With the ventilator services specifically, it provides a better placement option than a hospital for those individuals who have a prolonged need for ventilator use,” Leonard said. “Onsite dialysis is less taxing on the individual, as they are able to avoid transportation and remain in the nursing community.”
A successful diversification strategy is intentional and data-informed. Leonard advises providers to complete a robust due diligence process before expanding, including market analysis, competitor analysis, and a careful look at state Medicaid reimbursement models for specialized services. She also recommended speaking with hospital and health system partners to understand their needs and identify potential avenues for collaboration.
The pressure to innovate extends across the care spectrum, from skilled nursing facilities to assisted living. “Assisted living continues to play an important role in the long term care continuum,” said LaShuan Bethea, executive director of NCAL, in a statement about the challenges ahead. “We know the population is aging, and an increasing number of people with a focus on preserving health and wellness will need our care. We will continue to advocate at the state and federal levels for impactful change, offer solutions for more affordable assisted living options, and innovate in ways that allow providers to deliver the highest quality care to current and future residents.”
Leveraging Artificial Intelligence, Intelligently
Caregiver technologies continue to advance, powered by the rapid clip of new developments in artificial intelligence. Consider fall detection technology, which typically uses accelerometers to measure abrupt changes in speed. Chia-Lin Simmons, CEO of the personal safety, health, and caregiver tech developer LogicMark, suggested that AI can help capture the broader range of experiences involved in falls.
“Falls, for the elderly, are not just a one-dimensional experience,” she explained. “It’s not just about speed and then a stop: a lot of seniors slump, for example. How would you capture that in an accelerometer-based algorithm? We’re interested in understanding how that is applied to caretaking technology.”
Another frontier is the use of predictive AI to make sense of massive datasets and flag potential health risks, facilitating the broader shift from reactive to preventative care. One example Simmons offered is whether medication adherence data, or subtle changes in daily activity, might be able to identify patients at increased risk of falls and other serious conditions.
“Our job is to focus not just on figuring out if someone had a fall and getting them help as soon as possible—that’s a 100 percent table stakes, must-be-done kind of thing,” she said. “But are we seeing someone who is less active or are we seeing a pattern of inconsistencies that can give us a marker for potential early mental health deterioration, early Alzheimer’s, or dementia? Those things are, I think, the most exciting parts of what we can expect to see.”
“Can we try to look for a problem before it occurs?” Simmons added. “What are the markers that we can reveal using AI from a dataset perspective to say, ‘This looks like a risk for heart conditions,’ for example? I see 2026 as a year where a lot of companies are going to put more focus on that.”
Bruce Rosenblatt, owner of Senior Housing Solutions, echoed Simmons’ prediction that AI will play more of an active role in resident monitoring and safety. At the same time, he cautioned providers to bear in mind that their customers may be wary about new technologies, and to integrate them carefully. As an example of thoughtful, patient-centric design, he described one community that installed movement sensors in light fixtures.
“It’s noninvasive, but it’s a way to keep track of whether someone has fallen, or if they’re not moving in their residence,” he said. “We're with a generation of people that are not so familiar with technology and it could be frightening to people, so I would say take it slow.”
Higher Quality Environments
As industry leaders are well aware, the modern senior living consumer is in search of a lifestyle product as well as a care product. In 2026, the demand will only increase for resort-style communities with wellness amenities, opportunities for social engagement, and beautiful design.
“In senior housing, the pressure is on to prove value,” said ACHCA’s Mark Prifogle. “Older adults and families are more discerning about pricing, experience, wellness offerings, and flexibility—so operators must connect lifestyle, community, and access to supportive services in ways that feel simple and trustworthy.
As Rosenblatt looks to the year ahead, he anticipates more spacious living spaces, including ones that blur traditional boundaries. “I’d say larger residences are on the horizon, which is a great trend where they’re offering larger two-bedrooms and three-bedrooms,” he said. “The other trend that is occurring is that independent living and assisted living are being combined so people can age in place in their residences and not have to transfer to a separate wing or a separate building.”
Martin Kimmel, president of Kimmel Architecture, hopes providers embrace those blurring lines. “It is important that communities get better at allowing residents to age in place and receive care in their home rather moving folks into different levels of acuity care. It improves residents’ sense of well-being when they have in-unit care instead—when residents don't feel like they have to move to a new wing, their anxiety levels go down. Staying at home eliminates the trauma and indignities associated with a move,” he said.
“Conventional thinking has been that in-unit care is more expensive than consolidating all those that need care into a dedicated wing,” said Kimmel. “I think that people are starting to embrace the reality that it is not more expensive when you look at ALL of the costs. When you consider the true cost of dedicated units including staffing and keeping them full to optimize labor versus the stabilized costs of keeping residents in a unit, it can level or even lower the costs,” Kimmel added. “I believe the best operators are starting to embrace this and moreover, it creates a market advantage when considering how much peace of mind it gives residents and family decision makers. There may be some small risks in a new approach, but there’s great opportunity too.”
As a designer, Kimmel predicts another important trend in senior living spaces: more sunlight. Whereas it used to be prohibitively (or at least significantly) expensive to provide ample natural light, the cost of windows has come down, making it easier for communities to give their residents bright sunlit interiors.
“With the way building codes have evolved, windows now cost equal to or less per square foot than walls do, which is kind of counterintuitive,” Kimmel explained. “The window industry has become so mechanized that you can now buy windows very cost effectively. Walls include huge amounts of labor, materials, layers and moisture protection, even the insulation that’s required. Over time, walls have gotten more expensive while window costs have proportionally declined.”
Crucially, the economics favor larger windows rather than more windows. “Lots of openings cost more money, because each opening has to be individually treated, flashed from the outside, and trimmed from the inside,” Kimmel said. “But if you can have fewer larger window openings where manufactured units are grouped together, you create a double benefit: it costs less and it's more daylight. It's beautiful and the units are more attractive.”
Beautiful, well-designed environments don’t have to cost more when creativity is used to design waste out. Kimmel argued that when you choose to invest more in a particular area, it can be well worth it. “The owner operators that we know of are embracing the idea that making a better, higher-quality environment is worth the investment on all levels—absorption, retention, well-being, and wellness,” he said. “I think it's easier to keep people employed in facilities that feel better than ones that feel not so good. And I feel like the industry pivot to that is good on all levels.”
The Path Forward
As the senior living industry enters 2026, it still faces real challenges in the form of workforce shortages, changing regulatory frameworks, and funding cuts. Still, providers and experts see immense opportunities to innovate, adapt, and transform the standard of care for a rapidly growing elderly population.
“Across the continuum, the winning organizations will be the ones that treat workforce stability as a core strategy, equip frontline leaders with real decision-making tools, and use technology to remove friction, rather than replace relationships,” Prifogle concluded. “I’m optimistic about 2026 because the path forward is clear: deliver a consistently excellent resident experience, communicate transparently, and partner effectively across settings so that every transition feels safe, coordinated, and human.”
Steve Manning is a journalist based in New York City.
Provider magazine includes information from a variety of sources, such as contributing experts. The views expressed by external contributors do not necessarily reflect the views of Provider magazine and AHCA/NCAL. Learn how to submit an article.