Overview of Assisted Living Facilities

Overview of Assisted Living Facilities

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Updated October 11, 2023
Overview of Assisted Living Facilities
Assisted living is a term often applied to community-based
with disabilities who generally require a lower level of care
residential settings that provide housing and meals (i.e.,
than is provided in institutional settings. ALFs typically do
room and board), as well as various long-term services and
not provide the level of skilled nursing and rehabilitation
supports (LTSS), to older adults and individuals with
services or continuous care offered in nursing homes.
disabilities. LTSS can include personal care, medication
Accommodations such as private rooms, private baths, and
assistance, and housekeeping, as well as social and other
kitchenettes vary by setting.
health-related activities. States license these residential
settings and refer to them by a variety of names (e.g., board
In 2018, ALFs provided capacity for 1,183,600 licensed
and care homes, adult foster care, personal care homes,
beds. Settings ranged in size from 4 to 418 licensed beds,
group homes, and supported living arrangements, among
and the average bed capacity was 38 licensed beds. About 8
others). This In Focus uses the term assisted living facilities
in 10 ALF providers are for-profit entities, and the majority
(ALFs) to refer collectively to community-based residential
of providers (60%) are chain-affiliated (i.e., owned by an
settings.
organization that has two or more communities). Almost
half of ALFs surveyed were authorized or certified to
In 2018, an estimated 31,400 ALFs and similar residential
participate in the state-federal Medicaid program, which is
communities provided housing and supportive services to
a means-tested entitlement that finances primary and acute
about 918,700 residents, according to the most recent
medical care, as well as LTSS.
National Post-Acute and Long-Term Care Study (NPALS)
conducted by the Centers for Disease Control and
Resident Demographics
Prevention (CDC). CDC’s survey of licensed residential
The overwhelming majority of residents in ALFs were aged
care communities is based on data obtained from state
65 and over (92.5%), with more than half aged 85 and over
licensing agencies in each of the 50 states and the District
(54.9%). Most residents were female (67.4%) and non-
of Columbia. To be eligible for this national study, a setting
Hispanic white (89.4%). One-third of residents were
must be licensed, registered, listed, certified, or otherwise
diagnosed with Alzheimer’s disease or related dementia.
regulated by the state to
However, 19.4% of ALFs indicated they offered a dementia
•
care unit within a larger facility or community, and another
provide room and board with at least two meals a day
6.0% served only residents with dementia. ALF residents
and around-the-clock, on-site supervision;
were most likely to report needing assistance with bathing
• help with personal care, such as bathing and dressing,
and walking. Fewer residents reported the need for
and health-related services, such as medication
assistance in transferring from bed or eating (see Figure 1).
management;
• have four or more licensed, certified, or registered beds;
Figure 1. Percentage of LTSS Users Needing
• have at least one resident currently living in the
Assistance with Activities of Daily Living
community; and
(ALFs and similar residential care communities)
• serve a predominantly adult population.
The estimated number of ALFs from this study is likely an
undercount, as it does not include settings licensed to
exclusively serve individuals with severe mental illness,
intellectual disability, or developmental disability, and it
does not include smaller settings with fewer than four beds.
ALFs are considered community-based settings, as opposed
to institutional settings such as nursing homes. In
comparison, 15,600 nursing homes serving over 1.3 million
total residents participated in Medicare and/or Medicaid in
2018. This In Focus provides information on ALF setting
characteristics and resident demographics, using data from
the 2017-2018 NPALS. It also discusses ALF costs and
financing, as well as regulation and oversight.

Residential Setting Characteristics
Source: M. Sengupta, et al., Post-Acute and Long-Term Care Providers
Assisted living is considered part of a continuum of long-
and Services Users in the United States, 2017–2018, National Center
term care services. It is a concept that grew out of a desire
for Health Statistics, Vital Health Stat 3(47) 2022.
to offer housing and services options to seniors and adults
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Overview of Assisted Living Facilities
Notes: ALF = Assisted Living Facility; LTSS = Long-Term Services
state-based Medicaid provider requirements. Alternatively,
and Supports.
ALFs may contract with Medicare or Medicaid providers to
offer covered home health, personal care, and other covered
Costs and Financing
LTSS in their settings to participating residents.
The cost of ALF care varies depending on residents’ needs.
In addition, ALF costs can vary based on setting size,
States that choose to cover certain Medicaid-covered LTSS
geographic location, and range of services provided, among
provided in ALFs may provide the services under their
other factors. The 2021 Genworth Cost of Care Survey
Medicaid state plan or under a federal waiver program.
found the median annual ALF cost was about $54,000,
States most frequently provide assisted living services
whereas the median annual cost of nursing home care was
under Section 1915(c) of the Social Security Act, which
more than $94,900 for a semiprivate room and $108,400 for
provides Home- and Community-Based Services (HCBS)
a private room. These estimates are national figures and can
waiver authority subject to approval by the federal Centers
vary widely by geographic region. For example, at the state
for Medicare & Medicaid Services (CMS). CMS requires
level, the median daily rate for a one-bedroom, single
state waiver agreements to include specific statutory and
occupancy unit in an ALF ranged from $99 to $229.
regulatory requirements and assurances, including that the
state will safeguard Medicaid participants’ health and
Assisted living is predominantly a private pay industry.
welfare. States must identify, subject to CMS agreement,
Residents and their families generally are responsible for
the type of information they will collect and provide to
paying privately out-of-pocket for room and board, as well
CMS to review as evidence in meeting these requirements.
as for services provided in these settings; some residents
may use private long-term care insurance to cover some
On January 16, 2014, CMS issued a final rule for Medicaid
portion of these costs. The federal Medicare program for
participants receiving HCBS (effective March 17, 2014).
the elderly and certain disabled individuals does not cover
The rule established certain requirements for HCBS
LTSS provided in ALFs. State Medicaid programs can
settings, including requirements for provider-owned or -
choose to cover ALF services for certain eligible
controlled settings such as ALFs. To receive federal
participants; however, Medicaid does not cover room and
reimbursement, states must ensure that Medicaid HCBS are
board. Essentially, the federal Medicaid statute delineates
delivered in settings that meet certain qualities, such as
that housing is separate from health and social services
community integration, offering residents choice among
provided to an individual in a private home or residential
settings, ensuring residents’ rights and personal
setting. CDC’s NPALS found that 18.1% of residents in
independence, and offering choice of services or providers.
ALFs had Medicaid as a payer source for some health and
Provider-owned or -controlled settings also must have
social services. To assist low-income residents with the cost
tenancy agreements, residents’ privacy within their units,
of room and board, some states and local governments may
residents’ ability to control their own schedules and visitor
have state or local-only funded programs, with eligibility
access, and physical accessibility. The final rule required
based on financial need.
states to develop a CMS-approved process to transition
their programs into compliance within a five-year period.
Regulation and Oversight
CMS extended the transition period until March 17, 2023.
In general, ALFs and similar residential settings are not
States were able to request time-limited corrective action
regulated by the federal government. Instead, they are
plans for requirements impacted by the COVID-19 public
licensed and regulated by states. Because ALFs do not
health emergency. Similar to other Medicaid provisions,
receive dedicated federal financing for services similar to
states must have mechanisms to engage in ongoing
nursing homes, the federal government has not set
monitoring to detect noncompliance with HCBS settings
minimum ALF quality or staffing standards that would be
criteria.
parallel to Medicare and Medicaid Requirements of
Participation (RoP) for skilled nursing facilities (SNFs) and
Long-Term Care Ombudsman Program
nursing facilities (NFs). The federal government also has a
The Long-Term Care Ombudsman Program (LTCOP) is a
regulatory framework for oversight, inspection,
consumer-advocacy program that aims to improve the
investigation, and enforcement of RoP standards that are
quality of care and the quality of life for residents in
not applicable to ALFs. Some large ALFs may include
nursing homes, ALFs, and similar residential communities
Medicare-covered SNF care or Medicaid NF care. For
by responding to the needs of those facing problems in such
example, ALFs could offer such care as part of a continuum
facilities. There are 53 LTCOPs operating in all 50 states,
of services in Continuing Care Retirement Communities.
the District of Columbia, Guam, and Puerto Rico, and 425
Institutional care provided in such multipurpose settings
local programs as of 2021. LTC ombudsmen complement
must meet Medicare and/or Medicaid RoPs to receive
state officials who enforce facility-focused quality
program payments.
standards required under state statute or regulation. Among
their many functions, ombudsmen provide services to
In addition, ALFs may provide Medicare- and Medicaid-
protect residents’ health, safety, welfare, and rights; to
covered services such as home health or personal care to
resolve residents’ complaints about the quality of their care;
their residents, similar to the way these services otherwise
and to provide information, education, and consultation to
would be provided in a private residence. ALF providers
residents, families, and staff regarding resident interests.
that seek Medicare or Medicaid reimbursement for home
health services must meet federal home health agency
Kirsten J. Colello, Specialist in Health and Aging Policy
requirements. ALFs that seek Medicaid reimbursement for
IF11544
personal care and other Medicaid-covered LTSS must meet
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Overview of Assisted Living Facilities

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