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Mr. Chairman,

My name is Richard Grimes, the President and CEO of the Assisted Living Federation of America. Thank you for giving me the opportunity to submit testimony on health reform in an aging America. My comments today are focused on the need for health reform to address the long term care needs of this nation’s elderly and younger disabled citizens.

Currently there are approximately 10 million adults in American who need long term care services and supports. Sixty percent of those adults are over the age of 65. The risk of needing long term care increases with age. By the year 2020 an estimated 15 million Americans will need long term care support and as many as 12.1 million will be over the age of 65.

While Medicaid, Medicare, private insurance and consumers all share in the cost of long term care, nearly half of all funding for these services is through Medicaid. However there is  an institutional bias in the Medicaid system that directs two thirds of all funding to nursing homes versus home and community based settings such as assisted living.

Assisted living is a philosophy of care that embraces choice, independence and the opportunity for seniors to live enriching lives with dignity, respect and privacy. We are convinced that assisted living is popular because of the bedrock principle of choice.  And we firmly believe that any long term care reform proposal must also be founded on this principle of choice.

Aging in America has changed. Thanks to advances in pharmacology and health care and the benefits of our affluent society, people are living longer than they ever imagined. The US Census bureau reports that the fastest growing demographic in our nation are those 85 and older. Study after study show that older Americans want to remain in their communities as they age and stay near friends, family and the familiar. Virtually no one wants to go into an institutionalized setting.

Assisted living is the resident-centered alternative to institutional care. More than one million seniors call assisted living communities’ home.  Our residents are frail seniors who need  assistance with activities of daily living and can no longer (or choose not to) live in their family home. Our typical resident is an 85 year old widow. She takes eight to 10 different prescription drugs each day, and her medications enable her to manage chronic health conditions and live in her own room or apartment.   She lives surrounded by caring staff and friends and maintains control over her own life, deciding when to go to bed, when to get up, when to bathe and when to eat. Institutional settings do not allow these choices.

 ALFA supports the person’s decision on how and where to live and receive services. Many of you are grappling with the challenge of caring for aging parents and grandparents. There are many home and community based options. Ideally everyone should have a choice regardless of age or income.

Home and community based settings  such as assisted living are not only the preferred choice for consumers, but a cost effective choice as well.  The cost of assisted living is about half as much as skilled nursing home care. Medicaid saves between 50 and 66 percent when a resident can live in an assisted living community instead of a nursing home.

 ALFA believes there needs to be a comprehensive integrated long term care solution,  while supporting reform that encourages personal responsibility and incentives to encourage individuals of all ages to save and prepare for future long term care needs.

To us, the public policy challenge you face as you consider long term care needs is helping Americans save for retirement and afford the type of housing and care they need as they age. ALFA strongly supports the Community Living Assistance Services and Supports (CLASS) Act which would create a nationwide public insurance program to help pay for Americans with significant functional needs. The CLASS act keeps control in the hands of the individual and guarantees choice in long term care options.

The growth of assisted living, a largely private enterprise, in the last 25 years means that the long term care industry is no longer monolithic and nursing homes are not the only option.   An institutional bias in government programs lingers against home and community based settings. That is because Medicaid and Medicare, the twin safety net programs for the poor and aging, were created by Congress long before the private assisted living industry existed in the United States.  Indeed, when the prescription drug benefit was added to the Medicare program, it inadvertently charged a co-payment for poor seniors who live in assisted living communities, so called dual eligible recipients of both Medicare and Medicaid. We are pleased that lawmakers are trying to correct that inequity.

We are fortunate to live in a time when the average lifespan is steadily growing longer and the quality of life for older Americans is improving. The advances made since the creation of Social Security during the Great Depression are astonishing. As you grapple with health care reform, we urge you to take the broadest possible look at long term care and make certain your plans give maximum flexibility and choice to aging Americans.

ALFA and its members welcome the opportunity to provide more information to the committee as it considers this challenging topic. We are grateful for the chance to submit this testimony and look forward to working with committee members.

 The Assisted Living Federation of American is the largest national association serving companies operating professionally managed assisted living communities for seniors. ALFA is the voice for senior living and advocates for informed choice, quality care and accessibility for all Americans needing assistance with long term care. For more information visit www.alfa.org.

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