Assisted Living in the News

Assisted Living in the News Image

Assisted Living has been in the news for at least the past year, both locally and nationally. For our clients this is a prime issue.

Assisted Living is Different

Assisted living facilities are a different kind of long-term care entity. The main reason is that most assisted living facilities are private pay only: they do not accept Medicaid. Only a 1/5 of assisted living facilities nationwide accept Medicaid. This is a key difference.

Assisted Living Is Less Regulated Than Skilled Nursing Facilities

In the most basic of terms, because the federal government is not giving money to a private-pay-only facility via Medicaid reimbursement, the federal government’s “purse power” is not there. The federal government has no Medicaid funds to withhold from the facility as a “stick” to punish the facility for poor care.

States regulate assisted living facilities. Quality and enforcement vary by state.

For assisted living facilities that do accept Medicaid, the federal government does have the “purse power”, but 1) federal quality regulations are much weaker for assisted living facilities than for skilled nursing, and 2) federal enforcement mechanisms are lacking, relying instead on states. The reasons for this are complex and based in arcane federal regulations.

In short: the federal regulatory scheme is designed for skilled nursing, not assisted living.

People are Paying More Attention to Assisted Living

News outlets have been covering this.

And Congress has started to listen.

On January 25, 2024 the U.S. Senate launched an examination of assisted living. The Senate Special Committee on Aging, chaired by Sen. Bob Casey (D-Pa.), held a hearing, the first on this topic in two decades.

Both Republican and Democrat leaders of the committee stated they aim to examine 1) the financial practices and 2) quality levels in assisted living facilities, so consumers would be better able to choose facilities.

Note this stops short of better regulating assisted living facilities. The lawmakers expressed little appetite for Congress to take a more direct role in regulating the sector, such as by setting federal standards for staffing levels and training.

But it’s a start.

Dying Broke Series

Senator Casey was prompted by a New York Times – KFF Health News Series called “Dying Broke” published in November 2023 linked here: It is well worth reading.

That series outlines multiple problems with assisted living both cost-wise and care-wise.

One of the cost issues is the facilities tacking on exorbitant fees for the most basic of care needs: $50 for injections, $12 for a single blood pressure check, $93 a month to order medications from a pharmacy.

This means many residents are private paying thousands (extensive needs can run $10,000 or more) a month for room, board, and care – especially for memory care – and then many facilities tack on these add-on charges.

And resident incomes to pay these charges are not keeping up with inflation. The charges are going up due to 1) inflation and 2) just because the facilities can. But residents’ incomes to pay it are not.

Congressional Reaction is Limited

Prompted by this reporting, Senator Casey put out a call for residents and their families to submit their bills for the panel to assess the industry’s business practices.

Here again, however, the goal is limited to gathering information, not greater regulating: he stated “We want to hear from you about the true cost of assisted living and understand whether families have the information – the information that they need – to make this difficult financial and health care decision for a family member and for the family.” The ranking Republican on the committee, Sen. Mike Braun of Indiana, supported the inquiry while cautioning creating new financial burdens on the federal budget.

Assisted Living Facilities are Very Profitable

The assisted living industry is very profitable, running median operating margins around 20%.

The quality problems in assisted living have been widely exposed by national and state news outlets.

The director of the Gerontology Institute at Georgia State University testified at the hearing that the crux of the problem is that assisted living “is marketed to those who can afford it with a hospitality mindset”. They advertise and compete on the basis of amenities, sometimes called the “chandelier effect”.

Escalating Demand for Federal Involvement

The Executive Director of the Long Term Care Community Coalition, a nonprofit advocacy group, testified there is “an escalating demand for federal involvement.”

On January 24 Casey and other Democratic senators, citing the Times-KFF Health News Series, sent a letter to the Government Accountability Office requesting it study how much Medicaid and other federal agencies pay for assisted living. Indeed, a GAO Report in 2018 called for improved federal oversight of Medicaid dollars in assisted living facilities.

The U.S. System for Funding Long-Term Care is Broken

Even an industry trade group, the National Center for Assisted Living, acknowledges the U.S. method of funding long-term care is “broken” and that assisted living “is out of reach for many seniors.”

We are Paying Attention

We see this brokenness every day in our practice. We use every tool available to get access to care for our clients. Further, we are creative and progressive in finding solutions. As part of our ongoing mission, we are paying attention to assisted living and long-term care and continue to follow and create developments.