What’s Shaping Aging Services

As we plan for the year ahead, new developments and risks are set to impact the aging services landscape, especially with the 65 and older population expected to reach 82 million by 2050. Facilities are struggling with a myriad of challenges including a need for infrastructure development and updates, regulatory changes, litigation financing, market conditions and other factors that may influence how they stay afloat.

Indicators to Track in the Year Ahead

Regulatory Changes:

As most long-term care providers receive Medicaid funding on behalf of eligible patients, any potential policy changes to reduce Medicaid spending could significantly reduce revenue streams and create a ripple effect.

Tightened budgets can make it harder to hire and retain staff, leading to understaffing, wage stagnation and higher turnover in an already strained labor market. This, in turn, can increase the likelihood of resident falls, medication errors or other incidents, driving up liability and workers’ comp claims. As claims severity and frequency rise, insurers view the facility as a higher risk, which can trigger higher premiums.

In the most difficult circumstances, facilities may be forced to shut down completely.

Insurers and clients should work closely together to model potential policy shifts and their financial impacts. Proactive measures include identifying additional revenue streams and reinforcing risk management practices to help facilities remain resilient in the event of proposed regulatory change.

Litigation Financing:

With consistent returns for investors and proven value for plaintiffs and law firms now widely recognized, litigation financing may remain a prevalent force in 2026. Rising distrust of institutions – amplified by a host of factors including intergenerational jury pools, increased social activism and greater media scrutiny – has accelerated its use.

Jurors across demographics now bring varied expectations around corporate accountability and fairness, while heightened activism has raised public awareness of inequities. At the same time, constant media coverage continues to spotlight corporate missteps. Together, these dynamics create an environment where litigation financing is viewed not only as viable, but increasingly necessary, to pursue justice.

While aging services providers have not yet seen the hundred-million-dollar verdicts emerging in other industries, the growing severity of claims is driving costs upward, contributing to umbrella-level loss exposure. Risk management tools for aging services providers include strengthening staff training around resident safety and care, regularly reviewing policies and procedures, and maintaining detailed incident reports and compliance records to reduce liability risk.

External Conditions:

With so many external factors influencing current base rates and market conditions – such as rising litigation costs and escalating claim severity – the cost to insure liability exposures for aging services providers is broadly recognized as increasing year over year. One way aging services providers can moderate costs is to proactively engage in risk mitigation strategies that emphasize expectation management with those who care about – and for – residents.

CNA has a library of risk management resources and on-demand training modules that can aid in effectively providing this guidance.

Technological Innovation:

Aging services have been slower to adopt true artificial intelligence (AI) due to challenges such as limited infrastructure and the ongoing need for human empathy, but the use of advanced software tools is growing, particularly to review documentation for gaps or patterns. Advancements in radar-based technology – systems that use radio waves to detect movement and measure distance – are also improving documentation accuracy.

As disruptive technology becomes more widespread, insurers should help clients distinguish between AI and other technologies for optimal use. They can highlight benefits such as verifying timely staff responses, while also addressing risks like the creation of indisputable evidence of missed duties – and should prioritize safe implementation, strong data privacy and mitigation of operational and liability risks.

Navigating the Landscape

Regulatory changes, evolving funding models – such as private equity, joint ventures or creative capital structures – hardening market conditions and technological developments may influence aging services providers in the year ahead. Proactively addressing these factors now can help ensure a strong and smooth start to 2026 and beyond.

CNA is committed to the aging services industry for the long term by providing extensive, specialized risk control resources to all clients. Our ongoing investments are focused on creating a safer, more sustainable environment for the residents and staff in these facilities.

Equally important is our industry-leading claims management: dedicated claims handlers with deep specialization in aging services work to gather information early and advocate effectively for our insureds, ensuring claims are handled accurately and efficiently in the face of a highly specialized plaintiff bar.

The path forward lies in integrating risk awareness into every decision, ensuring aging services providers remain resilient and prepared for the challenges ahead.