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The Medicaid program is one of the major challenges to the provision of affordable assisted living, according to a new white paper from the National Center for Assisted Living. At issue, according to the paper, is chronic underfunding of the program and its access limitations to assisted living care.

More than 15 million older adults — one in three — are economically insecure, with incomes below 200% of the federal poverty level, according to the white paper, “The Importance of Expanding Affordable Assisted Living Options and Proposed Solutions.”

“We know that the 80-and-over population is projected to grow more than 90% by 2027,” NCAL Executive Director LaShuan Bethea said in a statement. “Many of those seniors will not have family caregivers like generations before them, and financial resources will be more limited.”

NCAL noted that one in five assisted living residents relies on Medicaid, which covers only services, not room and board. Home- and community-based services programs offered through the federal Medicaid program also have extensive waiting lists in some states. According to the association, 48% of assisted living communities are Medicaid-certified as HCBS providers, and almost 17% of residents rely on Medicaid to cover daily care in assisted living.

But providers face other challenges to offering affordable assisted living, including the availability of state programs, state reimbursement levels and the availability of waiver spots, according to the white paper. Those issues are in addition to increasing costs due to COVID-19, labor and inflation, the authors added.

“Assisted living, in particular, had to respond to COVID-19 almost entirely on its own,” the report reads. “Federal and state policymakers provided little support to these communities, in terms of personal protective equipment, testing and staff support.”

Waiver initiatives, funding, partnerships among potential solutions

NCAL said it supports enhancing Medicaid HCBS waiver initiatives as well as encouraging policymakers to expand and adequately fund Medicaid. The paper also states a need for public-private partnerships to identify opportunities that increase affordable assisted living options for low- to moderate-income older adults.

NCAL also suggested that coordinating care and bringing additional services into assisted living communities can reduce the overall healthcare spend, freeing up resources to invest in state Medicaid waiver programs.

“When someone can utilize the Medicaid waiver programs that are in place and move into an assisted living community to get the care they need, it offers savings on the part of both state and federal programs,” the paper reads.

In addition, NCAL suggests expanding options through state grants and programs and collaboration among providers, federal agencies, financial institutions and the construction industry to create new financing incentives for low- and middle-income senior housing and assisted living.

Along with releasing the white paper, NCAL said it is developing resources to help its members explore the feasibility of entering the affordable assisted living space, including providing a financial modeling tool, state-specific data and statistics about the increasing older adult population. 

Among the resources is a report from Plante Moran summarizing key operating and potential development characteristics of the assisted living market landscape that can be used by providers looking to expand assisted living services.

“Our work will continue until everyone who needs assisted living care can access it,” Bethea said. “We will advocate, educate and collaborate to ensure our profession can efficiently meet the current and future needs of our nation’s seniors.”