Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. General Comments About the State's Residential Care System


Because many of the same residential care facilities serve both private pay and Medicaid residents, most respondents expressed views about the industry as a whole.

A few stated that the state's residential care system provides options for those with the money to pay privately and for the very poor but not for elderly persons with low to moderate incomes.

  • There is a huge middle group of people who can't pay for the expensive places. There is a big unmet need for places between the high end and the low end. The new Multi-Unit Housing with Services model is for those who can't afford high end assisted living and it works well for people who can direct their own care or who have someone to provide oversight, and who can afford to pay extra for overnight unscheduled needs.

  • Assisted living for the private pay market responded to people's desire for options and control. If public funds are paying for the majority of long term care--we need to fund the system people want.

Two respondents expressed views about the state's Certificate of Need program for assisted living facilities, one noting that it needed to be better targeted.

  • The Certificate of Need program does not distinguish between different models of assisted living, or between non-profits and for-profits. There is a cap on beds by county, but there is a shortage of beds for people who are difficult to place, such as people with HIV AIDS or behavioral problems.

  • The industry supports the Certificate of Need program because it reduces competition; over-bedding is considered a problem by some in the industry because it costs a great deal of money to maintain unoccupied beds.

  • When the state established the moratorium on assisted living facilities, industry lobbyists supported it saying they didn't want competition, and it would save the state money. They got the moratorium, but a number of developers came in under the wire--with 14,000 beds. There is probably some overbuilding and bankruptcy--some facilities are struggling to find residents.

  • The Certificate of Need program does not distinguish between different types of beds. There could be a county that has only two very old facilities in which no one wants to live. If someone wanted to build a better adult care home in that county, as long as the existing facilities had vacancies, the permit would be denied.

One expressed concern about the lack of oversight of Multi-Unit Housing with Services facilities

  • No one in North Carolina knows how many Multi-Unit Housing with Services units there are and how many people are being cared for in them. They are required to be registered, but there is no oversight of these facilities.

Others criticized the state's moratorium and Certificate of Need program for nursing homes.

  • The nursing home Certificate of Need program has had a negative impact on consumers. There are not enough nursing home beds and people who should be in nursing homes wind up in adult care homes.

  • When North Carolina had the moratorium, for the better part of a decade there were no new nursing home beds in North Carolina. During that time there was a large increase in domiciliary care home beds. In effect, these beds substituted for nursing homes. Then in the early 1990's there was a large rush to build assisted living facilities that would cater to the private pay market. This was disconcerting to the traditional homes who depended on some private pay residents.

One mentioned that the overbuilding of market rate assisted living facilities could result in a larger number of Medicaid clients being served in these newer and "nicer' settings.

  • Very few market rate facilities take Medicaid clients. In one county, the developers had to pay such a steep price for land that their debt service is very high. They overbuilt the market--in one year over 20 facilities went up--now there are too many beds, which could lead to their taking Medicaid residents.

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