State Assisted Living Policy: 1998. Living Unit Options


Single occupancy apartments or rooms dominate the private market. A survey of non-profit facilities conducted by the Association of Homes and Services for the Aging2 found that 76% of the units in free-standing facilities and 89% of units in multi-level facilities were private (studio, one- or two-bedroom units). A similar survey by the Assisted Living Federation of America found that 79% of units in member facilities were studio, one- or two-bedroom units.

The issue that often creates conflict in policy development is the requirement for the living units. Older board-and-care rules allow shared rooms, toilets, and bathing facilities. Existing facilities that want to be licensed as assisted living would oppose rules requiring apartment-style units and single occupancy. Some states have grandfathered existing buildings or maintained separate board-and-care categories which allow shared rooms.

To some extent, market forces rather than minimum licensing standards will define the type of units built for and occupied by the private market. Older, shared room models will have a more difficult time competing for residents. However, older providers may increasingly seek low- income older people. As the upper-income market becomes saturated and more companies seek to serve low- and moderate-income elders, efforts to develop "affordable" models may compromise on single occupancy. Medicaid policy will play a critical role in shaping the market over time as it serves lower-income residents. Some facility operators contend that shared occupancy is the only way to develop affordable units. While historically, low Medicaid rates are cited as the reason for offering double occupancy, owner pricing policy also plays a role. Offering double occupancy allows an operator to set a higher price for single occupancy and scale prices by room size. The actual cost difference of single versus double occupancy units over the life of a mortgage is minimal. However, the revenue stream that can be generated by shared occupancy may be significant. Some providers contend that shared occupancy models actually require more staff time than single occupancy units because of the problems and conflicts between tenants that must be resolved. Under the guise of affordability, developers may market shared occupancy models to lower-income residents and single occupancy units to people who can afford to pay a higher rate.

Thus far, Medicaid policy in several states has recognized the importance of single occupancy in fulfilling the principles stated in their policy and developed a reimbursement level that allows facilities to contract with Medicaid at the market rate. Other states have required apartments but do not specify that apartment units can be shared only by choice. Whether Medicaid's role in maintaining the apartment and single occupancy threshold for low-income residents continues remains to be seen.

2. Ruth Gulyas. "The Not-for-Profit Assisted Living Industry: 1997 Profile." American Association of Homes and Services for the Aging. Washington DC. 1997. Also, "An Overview of the Assisted Living Industry: 1996." The Assisted Living Federation of America and Coopers and Lybrand. Washington, DC. 1996.

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