There will always be a market for high-end assisted living (AL) facilities. However, demographics are shifting, and a growing population of older adults need AL care but can’t afford the price tag. As a result, more builders, owners, and operators are creating facilities that are affordable for middle- and low-income people.

“There are a few factors playing a role in the need to address affordable AL. For one, there is a growing number of older individuals who don’t have children to care for them.” LaShuan Bethea, executive director of NCAL, explained, “the number of older adults needing assistance will grow, but the number of unpaid family caregivers will decline.”

Another factor involves home ownership, a key social determinant of health. “We are seeing more people who don’t own a home that they can use as an asset if they need AL. There also is a significant population that relies solely on Social Security and will require some kind of financial assistance to support their care. Finally,” Bethea said, “people are growing more medically complex and have a growing need for medical assistance as they age.”

The numbers are alarming. Currently, over 15 million adults aged 65 and older are economically insecure, with women as the majority of these. Millions of older adults are struggling to meet their monthly expenses but aren’t considered “poor” because they live above the poverty line. Social Security represents half or more of the income for 37 percent of men and 42 percent of women.

Affordable Models of Care

Many states are prioritizing affordable care for older adults via Medicaid waiver programs. “We need to get proactive and advocate for smarter Medicaid, or we will have large volumes of low-income seniors ending up in hospitals, emergency rooms, and nursing homes,” said Rod Burkett, chief executive officer of Gardant Management Solutions. “We need to ensure policymakers understand that Medicaid waivers won’t impact state budgets but will contribute to better quality of care and dignity of life.”

The reimbursement level has to be adequate, he added. “It’s important to have reputable operators, investors, and lenders who are willing to take on the risk of the Medicaid program, but reimbursement has to be robust enough. This needs to be a priority,” Burkett stressed. When a family in crisis is looking for affordable, appropriate care and they are put on a waiting list, this puts a burden on them and potentially puts the patient at risk for issues that can lead to an emergency room visit or hospitalization. “There can be unintended consequences of someone not being able to get into an AL facility they can afford, so we need capacity,” he said.

Bethea noted that there are options such as low-income tax credits and low-interest loans that can help eliminate some of the costs for residents and facilities. “To start, we need to have conversations with state Medicaid offices and find out what options are available for middle- and low-income older adults in your state,” she said.

Design and Affordability

In considering how to design affordable AL, Burkett suggested, “if you take the hospitality model as an example, we’re more Holiday Inn Express than Hilton. You won’t get fancy meals, huge rooms, or extravagantly elegant surroundings, but you’ll get basic amenities that focus on comfort, safety, and quality of care. We can take that attitude to operate and develop an affordable AL model,” said Burkett.

“We don’t need the biggest or ‘sexiest’ piece of land. We want the building to look nice inside and out, but we don’t need things like fresh flowers in the dining hall every day or four menu choices for every meal.”
Darren Azdell, AIA, NCARB, LEED PA, an architect and consultant, noted, “square footage is a distinguishing feature between high-end and middle-market buildings. However, we can use connections to exterior spaces to make the indoors look more spacious.” He added, “there also are things like finishes and types of flooring that are less costly but still look good.”

Staffing is a high cost for any facility. While cutting back on staff isn’t an option to reduce costs, there are ways to make staff more efficient and reduce the number of workers necessary to handle certain tasks, added Azdell. For instance, the kitchen can be designed efficiently so the chef can run a snack shop or bistro during down time.

Building an affordable AL building takes planning from day one and should involve the entire team—including contractors, architects, and others. “These individuals can help balance cost with aesthetics and functionality. They also can help prevent owners from going down a path that may seem cost-effective at first but ultimately may be more expensive,” said Azdell.

One State Report Outlines Strategies to Increase AL Affordability, Accessibility

Partnerships for Programming

“Efforts such as exercise and wellness programs can be provided through local community groups, such as churches or local colleges,” said Azdell. Community connections and partnerships with nonprofit organizations can help cut costs for programming and even supplies. At the same time, volunteers can fill in for some staff to organize and oversee these events. Burkett observed, “we have a full-time resident services coordinator to oversee things like activities, social services, and transportation. Then we extend what they are able to do with volunteers from church groups, Girl Scouts, local entertainers, and community organizations.”

Marketing Without Judgment

When marketing middle-market and low-income AL, it is essential not to make potential residents feel blame or shame because they can’t afford a high-end community. Most older adults can’t afford high-end care through no shortcoming on their part. Instead, they’ve had to support parents and/or adult children, they have significant medical debt, or they’ve worked hard but are living paycheck to paycheck.

“Our marketing doesn’t lead with affordability, and we include the need for financial assistance as just another asset the resident needs—not unlike help with medication management or housekeeping,” Burkett said. Such a marketing approach is significant, Bethea said, noting, “there are stigmas that exist regarding money. Imagine working your entire life and needing assistance when you get older. We need to make sure people don’t hesitate to ask for the assistance they need because they are embarrassed or ashamed.”

Taking Charge of a Growing Trend

Burkett said, “There is no question that there is a growing need for affordable AL. It’s a huge market.” However, he added that it’s a state-by-state decision about how aggressively each locality wants to support this market. He concluded, “we have astute investors who are putting funds into this market and want to be part of affordable AL. We can all work together to help federal and state policymakers see the value of and need for these types of facilities and the urgent need to support them.”

NCAL sees affordable AL as an important issue. Bethea said, “we have a responsibility to accommodate these older adults. As an industry, we should see this growing middle- and lower-income market, identify barriers to overcome, and help provide solutions.”

Joanne Kaldy is a freelance writer and communications consultant based in New Orleans.​