The Seniors Game.

Finding housing for seniors on fixed incomes can sometimes be tricky, but several states are experimenting with a cutting-edge program which could be the catalyst in solving the financial hole Medicaid is chewing up in the health care industry

Dorothy Bretz could be symbolic of the dilemma facing many of today's senior citizens: independence versus isolation. The 71-year-old didn't want to be a burden on her family, yet was still healthy enough where she could live alone with relatively little assistance. But with a small monthly Social Security check as her only means of income, Bretz was left with few choices. Financially, about her only alternative was staying with family, which she did for a while.

Soon, however, she found herself missing the independent lifestyle she'd maintained for so long before. Says Bretz, "It's better to be on your own and do what you want to do and do it when you want to do it."

Bretz's solution came earlier this year when she moved into the three-story Victory Senior Centre, a renovated Catholic high school and rectory in suburban Chicago, Illinois, whose two-phase development is serving as the state's model in finding affordable multifamily housing for indigent seniors.

Victory Senior Centre is part of a cutting-edge Medicaid waiver pilot program offering housing to seniors with low to moderate incomes in assisted living care or independent care facilities, while providing substantial savings to Medicaid-backed health programs. It's an untraditional--but growing--source of Medicaid funding governed by state-run programs which offer an alternative venue, other than a nursing home, to send senior residents who can no longer live at home alone, fund their own care, or have limited savings budgets to begin with.

Two of the charter programs, Associated Ventures of Chicago and American House Senior Living Residences, near Detroit, Michigan, have used this unique mix of private and public-sector financing to fund several assisted and independent living facilities throughout the Midwest. More states are following that lead. So far, eight have initiated legislation for these waivers; another 22 are petitioning to do the same.

"We feel it's the right thing to do, it's where the industry is headed, and it addresses a lot of the problems facing the elderly population," says Rob Gillette Jr., vice president of American House, which has 54 residents on the waiver program spread throughout three of its 20 facilities where this type of funding is available. "You take people who are living alone and put them in a community setting with the socialization they need, and it's a much better living environment."

Adds Jim Kaledjian, managing member of Associated Ventures: "These facilities are designed for the poor, frail, elderly who either have to live with relatives or be put in nursing homes because there's nowhere else to get assistance."

In Michigan, the Medicaid Home and Community-Based Services Waiver (HCBW) is a part of the broader Social Security Act designed to, "afford States the flexibility to develop and implement creative alternatives to institutionalizing Medicaid-eligible individuals," according to a release from the Health Care Financing Administration (HCFA).

To participate in the waiver program, seniors must be eligible for Medicaid, be in some sort of incapacitated condition which would otherwise require placing them in a nursing home, and live within an area targeted to their disability.

Developers and managers say the Medicaid waiver program is tailored toward the most destitute elderly, those with incomes typically under $20,000, including Social Security and Medicaid benefits, who require assistance with daily living functions (ADLs) such as walking, bathing, or eating.

These assisted living facilities aren't nursing homes, but maintain a 24-hour-a-day medical staff and provide amenities such as housekeeping, laundry, and meals.

Residents live in studio or one-bedroom apartments, unlike in some nursing facilities where as many as four residents can sometimes share a room. Most importantly, there isn't the drain on Medicaid like in nursing homes. Medicaid spent nearly $40 million on nursing home care in 1997, more than triple from just 12 years ago and in many states, Medicaid nursing homes represent more than 25 percent of all nursing home costs.

"If you can take someone out of a nursing home and put them in a more home-like environment, everyone wins," says Jill Eldred, chief operating officer of the Visiting Nurse and Hospice of Southwest Michigan. "Michigan's big on this and I think other states will follow ... They're looking for ways to decrease the costs per Medicaid client. These existing ways of innovative waiver programs state-by-state will continue to increase as more people need long-term care."

More than 34 million Americans are 65 or older and another 4 million are at least 85, representing the fastest growing group of any age bracket. In the next 30 years, as baby boomers become senior citizens, the elderly population 65 and older will more than double to nearly 75 million.

Here's how the program works: Once residents meet the entrance criteria, they make monthly rental payments of typically between $500 and $700 to a facility; Medicaid reimburses the facility for services such as food and housekeeping. Medicaid would also reimburse "personal services" such as ADLs to a separate home healthcare agency which manages each facility.

Critics point out that because operating and Medicaid waivers vary from state to state and because many of these facilities don't have to meet a set national licensing requirement, they aren't held liable to the same standards as nursing homes. "These are the ones with the least amount of credibility," says Marc D. Brookman, a partner in the real estate division of Duane, Morris & Heckscher L.L.P. of Philadelphia, who lectures extensively on housing trends in senior assisted living.

For example, there will be one registered nurse and nine certified assistant nurses once the assisted living facility opens at the Victory Senior Centre in October. But in the independent part of the facility, where Bretz now lives, there are no 24-hour, full-time nurses on duty and there won't be until the assisted living portion of the facility is completed.

THE `VICTORY' FOR JOLIET

Victory Senior Centre, located in Joliet, is a joint venture between Associated Ventures, which built and developed the property, and Pathway Senior Residences, which manages the 57-unit independent living facility where Bretz lives and will do the same with an adjoining 52-bed assisted living care facility currently under construction. Opening date is targeted for this fall. Five other facilities, developed by Associated Ventures and all with the Medicaid waiver program, are being constructed throughout the Chicago area.

But it's the Joliet facility Kaledjian describes as, "the linchpin of redevelopment," for its extensive renovation. All but the original foundation and four walls were torn down and rebuilt. Located in Joliet's historic River Bluff neighborhood overlooking the Des Plaines River, the over 100-year-old building sits near several other structures which date back to the Civil War. Originally opened as a rectory with a priest's dormitory attached to an all-boys high school, the building sat vacant for nearly a decade, creating an eyesore in the community and a haven for criminal activity.

In its place came 57 one-bedroom units, each with a kitchen and bathroom ranging from 550 to 700 square feet and all designed differently. The maroon and off-yellow colored hallway is wide enough to meet handicapped standards. "One of the problems in converting old buildings is meeting accessibility standards," says Kaledjian, whose company was required to install railing and emergency lighting in the hallways and designed kitchens with lower countertops.

Kaledjian feels the facility's most attractive benefit is its economic savings versus a nursing home. He cites the example of a incoming resident to the 32-bed facility who receives $500 a month in Social Security with assets of less than $2,000. The resident would keep $100, and the rest would go to Medicaid.

To keep that resident in a Chicago-area nursing home would have cost Medicaid $135 a day, nearly $4,000 a month, and almost $50,000 a year. In an assisted living care facility with a Medicaid waiver, the same resident would incur expenses of $45 a day, $1,350 a month, and approximately $15,000 a year. Figuring in the resident's $400 monthly payment to Medicaid and assuming a two-and-a-half year stay (the average for an assisted living care facility), housing the resident in assisted living would save Medicaid nearly $80,000 over that span. That's an $80,000 savings to taxpayers as well.

"We know there has been tremendous pressure on the Medicaid program in the last 20 years," says Kaledjian. "Medicaid has been analyzed because there's an aging population. This is a method to reduce that pressure through lowering costs. Assisted living can save the government millions."

AMERICAN HOUSE PIONEERS IN MICHIGAN

American House, which services six counties surrounding Detroit, runs its Medicaid waiver program in conjunction with Michigan's Area Agency on Aging 1-B (MAAA) and is an offshoot of the state's home-delivered Medicaid service. While seniors remain at home in that program, they don't have access to the 24-hour care that they would in an assisted living care facility. The waiver covers meals, housekeeping, laundry, and ADLs up to $1,000 a month.

American House was designated as a "home-like setting," meaning they are considered more a "home" rather than an "institution" such as a nursing home, and so can provide hotel-like services, such as meals, housekeeping, and 24-hour nursing care.

American House was the first in Michigan to use low-income loans to develop communities for low-income elderly through the state's housing and development office. Like in Illinois, Michigan's Medicaid waiver program is more cost effective than sending a resident to a nursing home; Gillette estimates its costs Medicaid $40 a day to stay in an assisted living facility versus $73 a day in a nursing home.

Plus, residents can choose a payment plan where they are only billed for activities they use and not for all activities available.

"No one has to leave our facility for financial reasons, so it's extended the length of stay," says Gillette. "We cater to the frail elderly. They require meals and housekeeping and 24-hour emergency response and we provide those services economically.

Marino is assistant editor of Units.