USA Skilled Nursing Facility Market to Reach USD 279.9 Billion by 2035 at a CAGR of 3.3%, Driven by Aging Population and Medicare Advantage Penetration | FMI

The USA skilled nursing facility market is poised for steady growth over the next decade, with market size projected to rise from an estimated USD 202.4 billion in 2025 to USD 279.9 billion by 2035. This growth reflects a compound annual growth rate (CAGR) of 3.3% over the forecast period. In 2024, the SNF market generated revenues of approximately USD 194.2 billion, signaling continued demand for high-quality post-acute and long-term care services across the country.

Skilled Nursing Facilities (SNFs) are critical healthcare institutions that provide 24/7 nursing care, rehabilitation, and assistance to individuals recovering from surgery, managing chronic conditions, or requiring specialized long-term care. These facilities serve as a vital bridge between hospital care and home, ensuring patients receive the intensive support they need to recover and maintain quality of life.

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Aging Population Fuels Demand for Skilled Nursing Services

One of the primary forces driving the expansion of the SNF market is the rapidly aging population in the United States. As baby boomers continue to enter retirement age, the need for specialized rehabilitation and long-term nursing services is increasing at a steady pace. This demographic shift has intensified the demand for skilled care services, prompting both public and private investments in facility upgrades, staffing, and service innovation.

States that have taken proactive steps to improve Medicaid reimbursement rates have further enhanced the financial sustainability of SNFs. These changes not only improve operational margins but also enable facilities to meet rising care standards and invest in better infrastructure and patient outcomes.

Medicare Advantage Plans Reshape Skilled Nursing Utilization

The growth of Medicare Advantage (MA) plans is also reshaping the landscape of skilled nursing facility utilization. With MA enrollment nearing 30 million beneficiaries in 2023, these plans are becoming an increasingly dominant player in the post-acute care market. Unlike traditional Medicare, MA plans often incorporate cost-effective care coordination models, which prioritize referrals to SNFs for short-term rehabilitation and extended care.

This trend has fueled consistent occupancy rates and a more predictable revenue stream for providers. Furthermore, some states are reporting MA reimbursement rates that are up to 3% higher than traditional Medicare, providing a critical boost to facility revenue. These developments have improved the financial outlook for SNFs and have led to a modest increase in operating margins, which reached a median level of 0.6% in 2023.

Opportunities in Payment Diversification and Enhanced Care Models

As MA penetration increases, the diversification of payment structures is creating new opportunities for skilled nursing operators. Many SNFs are now aligning their care models with MA plan requirements to maximize referrals and improve patient outcomes. Facilities that integrate advanced care coordination, data-driven outcome tracking, and patient-centered care planning are better positioned to attract contracts from MA providers.

This shift is also prompting a greater emphasis on value-based care, where performance and quality outcomes determine reimbursement. Operators that adapt to these models can gain a competitive edge and strengthen their role within the broader healthcare delivery system.

Innovation and Technology Supporting Quality of Care

Advancements in medical technology and digital health solutions are further enhancing the value proposition of skilled nursing facilities. From remote monitoring to AI-driven care planning, new tools are enabling SNFs to deliver more personalized and effective treatment while improving operational efficiency. These innovations support better patient experiences, reduced readmission rates, and compliance with emerging regulatory and payer requirements.

With a growing focus on quality, transparency, and accountability, SNFs are evolving from traditional care centers to dynamic hubs of medical and rehabilitative excellence.

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Key Takeaways – U.S. Skilled Nursing Facility Market Outlook

• Freestanding Facilities Dominate: Freestanding skilled nursing facilities are projected to hold 77.1% value share by 2025, reflecting their wide availability and infrastructure advantages.
• For-Profit Ownership Leads: Facilities under for-profit ownership are expected to command 74.3% of the market share in 2025, driven by aggressive investment strategies and scalability.
• Federal Staffing Mandates Fuel Industry Debate: Proposed CMS mandates requiring increased nurse staffing may cost the sector $4.2–$7.1 billion annually, posing financial and operational challenges—especially for rural and small facilities. However, they are indirectly spurring market growth through increased investments in staff development and retention.
• AI Emerges as a Market Catalyst: The adoption of AI technologies is transforming operations, enhancing clinical decision-making, and reducing dependency on agency labor. From predictive analytics to robotic process automation, AI is becoming central to maintaining care quality amid staffing shortages.
• Hospital Partnerships Create Growth Pathways: Collaborations with hospitals and health systems offer steady patient inflow, higher occupancy, and improved patient outcomes. This integration boosts both revenue streams and facility reputation, reinforcing long-term market sustainability.
• Workforce Shortage and Financial Constraints Remain Key Barriers: The industry continues to grapple with Medicaid underfunding, staff shortages, and rising wages, leading to closures of over 450 facilities post-pandemic. Nearly half of residents in 2022 lived in facilities at risk of shutting down, spotlighting the sector’s ongoing fragility.

Outlook

The skilled nursing facility sector in the U.S. is entering a transformative era, backed by strong demographic demand, favorable reimbursement trends, and innovations in care delivery. As the market expands to an estimated USD 279.9 billion by 2035, stakeholders across the healthcare continuum—payers, providers, policymakers, and investors—are expected to play a crucial role in shaping a resilient and patient-centric SNF ecosystem.

As SNFs continue to align with the evolving healthcare landscape, the sector is well-positioned to deliver both sustainable growth and high-quality care for millions of Americans.

Competitive Landscape

Key players in the skilled nursing facility market are employing various strategies to maintain a competitive edge. These include product differentiation through innovative care models and formulations, as well as forming strategic partnerships with healthcare providers to strengthen distribution networks. A major strategic priority for these companies is expanding their global footprint and enhancing their service portfolios through targeted collaborations and acquisitions.

Recent Industry Developments in the U.S. Skilled Nursing Facility Market

• August 2024 – Genesis HealthCare, Inc., one of the largest post-acute care providers in the U.S., was honored with the 2024 Gold – Excellence in Quality Award by the American Health Care Association/National Center for Assisted Living (AHCA/NCAL).
• August 2022 – Sunrise Senior Living expanded its U.S. operations by launching The Apsley, its second luxury senior lifestyle community in New York City.

U.S. Skilled Nursing Facility Market Outlook – Key Players

• Genesis HealthCare
• Brookdale Senior Living Solutions
• Lincare, Inc.
• The Ensign Group, Inc.
• Extendicare
• Sunrise Senior Living, LLC
• Life Care Services
• Golden Living Centers
• LifeCare Centers of America Corporate
• Peninsula Behavioral Health
• Sava Senior Care Administrative Services LLC

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Key Segments of USA Skilled Nursing Facility Market

By Type:

In terms of type, the industry is divided into- freestanding and hospitals.

By Ownership:

In terms of ownership, the industry is segregated into- For-Profit, Non – Profit and Goverment.

By Region:

Key regions of USA includes Northeast United States, Midwest United States, West United States, Southeast United States, Southwest United States have been covered in the report.

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