The Supportive Living Program in Illinois

1. The Supportive Living Program in Illinois Sara Lindholm, Program Manager NCB Development Corporation Midwest Regional Housing Forum Des Moines, Iowa September 11, 2003

2. Illinois Affordable Assisted Living Initiative (IAALI) • Three year program co-managed by NCB Development Corporation, National Equity Fund, and LISC/Chicago • Objective: promote development of affordable assisted living for frail low-income seniors by non-profits throughout the State of Illinois • Tools: TA, feasibility grants, predevelopment loans

3. IAALI, cont. • Funded by three Illinois foundations • Chicago Community Trust • Retirement Research Foundation • Community Memorial Foundation • Currently working with twenty-five not-for-profit sponsors • Local CDC’s • Community based and county nursing homes • Public housing authorities • 202 owner/operator • Area Agency on Aging

4. Overview • What is Illinois’ Supportive Living Program • Why has it been such an effective production model? • What are the possibilities, if any, of applying this to the younger disabled population? • Why is there a moratorium on accepting new applications to this program?

5. Brief Digression: What do we mean by “Assisted Living”? • Assisted Living Work Group for the Senate Special Subcommittee on Aging spent eighteen months discussing this • Once regulated by state, the state defines its content

6. A Residential LongTerm Care Option for Frail Seniors to Prevent Premature or Unecessary Institutionalization • Residential setting with private apartments • Meals, transportation and activities • 24 hour response for unscheduled needs • Medication management/oversight; health related services may be available • Flexible personal care available according to needs and desires of resident • Integral concepts of resident, autonomy, choice and negotiated risk

7. A Needs Driven, Niche Market • Seniors who are too frail (mentally or physically) to live alone, but not in need of skilled nursing care • Affordable Assisted Living opens the opportunity for those seniors most at risk of unnecessary nursing home placement • Low income---translates to early onset of frailty and disability due to history of poor health care • Living alone, often without family support networks

8. Assisted Living is Expensive • Approximately 1 million residents in AL nationally • Nationally AL charges range from $2,200- 5,000/month (high capital and operating costs) • Affordable to residents earning between $33,000 and $75,000 • Nationally, 64% of seniors over 75 years have incomes less than $25,000

9. In Illinois, the Supportive Living Program provides Medicaid reimbursement for costs of services • State Medicaid Waiver Program initiated in 1999 • Permits use of Medicaid funds to reimburse services to Medicaid eligible residents of “assisted living” facilities certified by Department of Public Aid as “Supportive Living Facilities” • Serves persons 65 and older OR 22-64 years with physical disabilities • These facilities are exempt from the other assisted living licensure in Illinois: Assisted Living and Shared Housing Act (no Medicaid)

10. Overview of the Supportive Living Program

11. Physical Plant Requirements • Fire Protection: NFPA Life Safety Code 101, Chapter 22 Residential Board and Care Occupancies. and Care Occupancies). • Minimum 10, maximum 150 units • Private apartments with kitchenettes, baths with shower and grab bars, lockable doors, heating/cooling controls • 300 s.f. single occupancy • 450 s.f double occupancy • Full service kitchen (food to be prepared on site) • dining room, common room • One common bathing room with tub • All doors wheelchair accessible • Laundry room for resident use • Emergency communication response system in units & baths

12. Mandatory Services in SLF’s • Medication Management/oversight/reminders • Wellness nursing/ intermittent nursing • Personal Care (bathing, toileting, transfers, grooming) • 24 emergency response • Recreational/social activities • Housekeeping/laundry • Transportation--scheduled • Three meals daily ( prepared on site)

13. SLF Resident Eligibility • 65+ years of age or 22-64 with physical disability • Screened by IDHS to be in need of nursing facility level of care (only Medicaid recipients must meet threshold) • Physician certified to need level of care provided by SLF • Typical DON 29-47; need assistance with 1+ ADL • Not mentally ill, with DD or danger to self or others • Can exit facility with minimal assistance in emergency

14. Assessment and Service Plan Requirements • SLF: Initial assessment upon admission and comprehensive within 14 days by RN; thereafter annually and as needed • Health status evaluation by RN quarterly • Service plan within 7 days of assessment and updates

15. Integral Concepts of Choice andNegotiated Risk • Needs assessment is performed by RN and proposed service plan is drafted • Resident need not accept services • Resident agrees to assume risk for departing from recommended services/care • Facility responsible for ensuring informed decision making

16. How Does the Supportive Living Program Work from a Financial Perspective?Sub-Text: Why has it Been Such an Effective Production Program?

17. Most Effective Production Model in the Nation • 3 year waiver for 2750 Medicaid slots, June 1999-June 2002, extended for five years till June 2007. • DPA invited applications on a rolling basis • Overwhelming response: nearly 100 applications by November 2001. • Currently 69 approved sites (5564 units), of which 25 are operational • Overwhelming participation by for profit developers (85%) • Moratorium on accepting new applications since November 2001

18. Key to Production: SLP does not rely solely on scarce affordable housing financing resources • Reimbursement rate plus other income sources is adequate for light care model of AL • Contract for service reimbursement is with the building owner/operator (may subcontract)—business and real estate can be underwritten as one package • Having Medicaid waiver available essentially doubles the potential market for AL in many areas—no income gaps

19. Key to Production, cont. • SLP allows for mixed income projects, number of Medicaid units can fluctuate with income mix of residents, or as spend-down of assets occurs among residents • Income eligibility for Medicaid is surprisingly high and roughly coterminous with income ceilings for affordable housing programs

20. Revenue Sources for SLF Operations/Income Eligibility(See handout) Rent: Uniform charge across the state, set at SSI payment less $90 personal needs allowance: $462 Food Stamp Income (Medicaid -eligible residents in SLF almost automatically eligible)---SLF become Electronics Benefit Transferee Service Payment/Reimbursement: Flat, capitated rate varies only by location in state: $45.54-61.94/day or $1384-$1883/month. Does not provide for tiered levels of services.

21. Income Eligibility, $6,624 and up • Lower income threshold: If resident’s only income is SSI, can live in SLF, retain $90 personal needs allowance and State will pay for all services • Upper income limit for Medicaid eligibility: 12 times the Room and Board plus service payment, less $1. ($22,152 in Southern Illinois, $28,140 in Chicago SMSA) • Upper limit for private pay: none • Medicaid beneficiaries must meet asset test ($2,000/$3,000)

22. Income Mix • Number of Medicaid units can fluctuate • If private pay residents are charged higher rates 25% of units must be reserved for Medicaid eligible residents (counting those in spend-down) • If private pay residents are charged on sliding scale for tiered services, Medicaid eligible residents must receive highest level of services. • Most operating facilities are charging equivalent rates, and operate at about 55% Medicaid occupancy

23. Compare Income Eligibility for Medicaid in SLF to HUD’s “Low Income” Category Chicago SMSA ($28,140 for Medicaid eligibility “Low Income” (60% of area median for a family of one)--- $31,680. “Very Low Income” (50% of area median for a family of one)---$26,400

24. How are SLF’s Being Financed? • Many rural SLF’s are being financed by conventional means (local banks, 501 c 3 bonds): low land costs, low cost of construction, good interest rate environment • Metropolitan area SLF’s face higher construction, land costs • With existing land, strong borrower and current interest rates, can still work conventionally, especially with mixed income projects and minimal developer fee requirements

25. How are SLF’s Being Financed, cont. • In other cases, affordable housing financing tools help reduce debt service by “lasagna layering” • These tools add costs (developer’s fees, syndicator required reserves) • Approximately 45% of SLF’s in pipeline expect to utilize LIHTC in some form (4% or 9%) • Over past five years IHDA has approved financing or financed 23% of approved or operational SLF’s • QAP changed this year to enhance competitiveness of family housing—fewer SLF’s will be financed with LIHTC

26. Other Financing Strategies • New 202 (1999 award—74 units)—conversion of hospital wing ($10 million) • Public housing authorities are arranging pooled bond issue to be retired by forward pledges of HUD capital grant funding and income stream from services • One 202 Assisted Living Conversion Grant (2000 award) of $4 million

27. Issues/applicability to a Younger Disabled Population • Restriction on housing mentally ill (fine line with Alzheimer’s) and developmentally disabled—essentially limits occupancy to physically disabled • Structure of financial arrangements leaves resident with $90/month, no incentive to enter work force • Limited interest among disability advocates: segregated housing, but serious interest among some advocates/service providers in providing this type of housing as their population ages. • Special cases: one NFP serving the visually impaired

28. Now the Bad News • Moratorium on accepting new applications since November 2001 • Victim of its own success…need to roll-out production to evaluate regulations and product before accepting new applications • Huge back log of interest and pressure on Department of Public Aid

29. For More Information • SLF Program- http://www.state.il.us/dpa/html/slf provider.htm • Illinois Affordable Assisted Living Initiative • Sara Lindholm (312-697-6473) lindholm@nefinc.org • Claudia Saravia (312-697-6117)csaravia@nefinc.org