For the seniors housing and care industry, now is the time to invest in and develop more affordable assisted living, or AAL, options. Fortunately, for both the industry and the low- and middle-income seniors of the present and future, several organizations and companies are doing outstanding work to help address the problem.
The need for more AAL options is clear. Fulfilling that demand is a challenging proposition, to be sure. Recent developments, however, indicate that the cause is gaining momentum. Specifically, an AAL working group that likely is the largest such AAL organization in the country is led by Gardant Management Solutions Inc. and the Affordable Assisted Living Coalition. The group held its second annual Affordable Assisted Living Summit in September 2016. At the event, the group outlined what it believes are the characteristics of an ideal AAL model, which it broke into nine categories:
- Political support. To maintain a successful AAL model, a state needs a receptive government at all levels, from the governor’s mansion to municipalities. Cooperative assisted living and nursing home associations as well as housing lobbies also are essential.
- Medicaid authority. This can be in form of standalone home- and community-based services waivers for AL, although the details will vary by state. An established, effective Medicaid eligibility system for long-term supports and services is critical.
- Reimbursement. Reimbursement must be adequate to cover costs, timely, adjust with inflation, allow separate room and board payments, and be as uncomplicated as possible in regard to the billing and claims process. In addition, it should be stratified based on acuity level.
- Financial. Funding sources can include low-income housing tax credits, tax-exempt bond financing, the U.S. Department of Housing and Urban Development / Federal Housing Administration Sec. 232 program, the U.S. Department of Agriculture Sec. 538 program, and conventional bank financing.
- Operations. Some of the ideal operations characteristics include good location, sufficient employment pool and adequate staffing, effective partnerships with managed care, use of data collection and electronic health records, and sufficient marketing resources.
- Demand/market demographics. The area must have sufficient market demand in regard to age and income. AAL facilities can be supported by urban, suburban and rural locations.
- Regulatory. Regulatory considerations are similar to the traditional AL model and will include announced annual compliance audits, a good partnership with technical assistance from state regulatory compliance staff, and a small or no licensure fee, among other characteristics.
- State AL association. State AL associations play an integral role in the development of AAL by providing promotion, protection, lobbying, ongoing education and affiliation with national associations.
- Target states. As the development of AAL facilities still is very much a state-by-state endeavor, the factors that determine which states are conducive to AAL vary widely. In general, states that have committed to increasing access to HCBS waivers for AL and are giving priority to residents who have transitioned from skilled nursing facilities should be among the first considered.
As these organizations and companies continue their work in promoting AAL options nationwide, progress continues to be made, and the momentum builds. The issue of not having enough AAL options for a wave of retirees with insufficient funds is a serious one that will not be fully alleviated any time soon. But thanks to the hard work of organizations such as those discussed above, substantial progress is being made.
Brett Murphy (above) is a vice president with Lancaster Pollard in Chicago. He may be reached at [email protected]. Steve Kennedy (left) is a senior managing director with Lancaster Pollard in Columbus, OH. He may be reached at [email protected].
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