A Breakthrough in Creating Affordable Assisted Living | I Advance Senior Care Skip to content Skip to navigation

A Breakthrough in Creating Affordable Assisted Living

April 1, 2006
| Reprints
      In 2001, a statewide study by the Iowa Finance Authority indicated that more than 50% of the elderly aged 75 years and older could not afford what was currently available on the assisted living market. This was based on a comparison between the costs of such facilities and the average area income of sen iors in this age group. At that time, the average monthly costs for market-rate assisted living ranged between $1,472 and $2,517 (amounts self-reported and averages based on efficiencies, one-bedroom, and two-bedroom units ; rents may not include any type of minimal medical care). Yet one in four seniors statewide aged 75 and older had a monthly income at or below $884 (from the U.S. Census Bureau, 2000), and 50% of the annual median area in come ranged from $17,300 to $23,550 (from the U.S. Department of Housing and Urban Development).

Based o n the study's estimate that approximately 5% of the state's seniors aged 75 and older would be willing to move to assisted living and would have need of services, the state needed 3,662 additional units to meet this demand . If more than 50% of this population could not afford market-rate assisted living, then an estimated 1,831 aff ordable units were needed.

This gap between what was needed and what people could afford was accentuated by the inability of assistance programs to make up the difference. Because the Medicaid Waiver Program pays fo r the costs of personal and medical services only, the costs of rent and board are paid by the tenant. Market-r ate assisted living programs at the time of the study rarely had rent and board rates below $800. They were sim ply not purpose-built as affordable properties and, therefore, had capital and staffing costs that significantl y exceeded this amount.

It is well known that the additional services referred to most commonly as bo ard-including activities, meals, and emergency response-help prevent assisted living residents from develop ing conditions that would lead to placement in an institutional setting. Furthermore, reducing social isolation and depression and providing adequate nutrition and hydration clearly benefit elderly and disabled residents.< BR>
A June 2002 report to Congress from the Commission on Affordable Housing and Health Facility Needs for S eniors in the 21st Century, titled "A Quiet Crisis in America," summarized the human side of this critical prob lem in this way:

    ...A large and growing number of seniors will face triple jeopardy: inadequate inco me, declining health and mobility, and growing isolation. ...For some, family supports disappear when they outl ive spouses or when children move to a distant place. For others, old age is a time of discovering that, with d eclining or fixed income, they are simply unable to purchase the goods and services they need.

    ...For th ose fortunate enough to have caring families nearby, their caregivers may face more stress than they can endure . When family, friends or caregivers search for help, they often encounter confusing requirements and eligibili ty standards as well as exorbitant costs. Those in rural areas face a dearth of available services....

    . ..[The] result of this could be a substantial increase in costly and premature institutionalization of older pe ople. ...Nursing facilities should be places that care for the very ill and not the only alternative for people who cannot afford to live elsewhere.

Mirroring these concerns, the home health agency we have collaborated with for our affordable assisted living program was experiencing these problems one-on-one, frequently discove ring that low-income individuals had few choices as their level of care changed. As a home care agency, they we re able to serve clients in their own homes, thereby extending their ability to be independent as long as possi ble, yet there came a time when these individuals needed more assistance or socialization than could be provide d in their own homes. Assisted living was very appropriate for these individuals, but because of the rising cos t of assisted living facilities, they were forced into nursing homes so they could receive services that Medica id only covers if those services are provided in a nursing home. Tragically, the healthcare providers found a d irect correlation between these individuals' entering nursing homes and their declining health.

Through a home health agency's use of Medicaid and the Elderly Waiver, delivery of the same services is allowed in an i ndividual's home or apartment if that person can sustain his or her home and afford the cost, and if his or her condition is compatible with a supportive housing arrangement. Individuals living alone often do not have such a supportive housing arrangement, but it is present in an assisted living facility.

The state program t hat had been designed to assist frail seniors with the cost of assisted living paid such a limited percentage o f the program cost that many-in fact, most-market-rate assisted living facilities did not accept residents usin g the Medicaid Title 19 Waiver Program. Clearly, there was, and still is, a critical need for an effective solu tion to the problems of this vulnerable population.