Although the long-term services and supports sector faces several challenges to meet the needs of a rapidly increasing older adult population, assisted living’s low cost and gains in workforce levels make it an appealing choice, according to data from a new KFF issue brief.
Coverage, affordability, financing and workforce shortages exacerbated by the COVID-19 pandemic are weighing on providers across the LTSS continuum.
The good news for assisted living is that when compared with the median income for a Medicare beneficiary for 2023, the setting comes in as a far less expensive option, at $64,200 annually for a private one bedroom unit, than some alternatives. Only care at an adult day center is less expensive, at $24,700 for five days a week.
Comparatively, 40 hours per week for a home health aide came in at $68,640 annually, following by a semi-private room in a nursing home ($104,025), a private nursing home room ($116,800) and a 24/7 home health aide $288,288.
More than 6 million people use long-term services and supports delivered in home- and community-based settings, and more than 2 million people use LTSS delivered in institutions settings, according to Congressional Budget Office estimates.
The bad news is that the number of workers in the LTSS sector overall was 4% lower in January 2024 than in February 2020, according to a recent analysis on the Peterson-KFF Health System Tracker. The reduction in workers was largest in the skilled nursing setting, where the workforce remained 9% lower compared with February 2020 levels.
Assisted living, on the other hand, saw a 5% increase in the number of workers in January compared with February 2020, reaching a negative 7% low in employment in September 2021 and January 2022. Employment in continuing care retirement communities remained 6% below pre-pandemic levels.
A 50-state survey of Medicaid HCBS programs found that all states reported shortages of HCBS workers, most frequently among direct support professionals, personal care attendants, nursing staff and home health aides. Most states also reported closures of HCBS providers within the last year.
The Biden administration finalized the Medicaid Access Rule establishing mandatory quality measures for HCBS and requiring providers to allocate 80% of HCBS payments to direct care work pay. Senior living experts criticized the rule, questioning whether it actually would increase transparency in Medicaid payments and improve worker wages.
In addition to the federal action, many states have adopted rate increases for HCBS providers with a goal of boosting staffing levels. According to KFF data released this past fall, more than half of the states have increased payment rates for Medicaid HCBS to address workforce challenges after assisted living communities closed.
