Commission delivered final report to Congress on June 28, 2002
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Hearing on "The Preliminary Findings of the Commission on
Affordable Housing and Health Facility Needs for Seniors in the 21st Century."

Statement of Ms. Nancy Hooks
Co-Chair Commission on Affordable Housing and Health Facility Needs
for Seniors in the 21st Century

Thursday, June 27, 2002 Dirksen Senate Office Building Room 538

Chairman Sarbanes, Senator Gramm, Members of the Committee - thank you for holding this hearing to receive testimony regarding the impending Report of the Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century - the Seniors Commission.

I am Nancy Hooks of Albany, New York, and for the past eighteen months I have Co-Chaired the Seniors Commission. It is a great honor to have been selected for this important mission and to be invited to share our key findings with you.

Like many of my colleagues on the Commission, I have dedicated my professional life to helping seniors live with a sense of fulfillment and dignity. As fourteen Commissioners, with vastly different backgrounds, occupations, and life experiences, from 11 different states, we brought a great deal of diversity of opinion to this responsibility - and that diversity is a strength that has led us to an array of thoughtful recommendations. Our Report reflects a wide range of perspectives and solutions to some extraordinarily pressing problems. We offer over 40 specific recommendations and a wealth of new data to lay the groundwork for the changes that are needed if we are to provide Americans with the assurance that they will not be abandoned in their later years.

Mr. Chairman, our Congressional mandate laid out extensive expectations, and I am pleased to report of the vigorous effort that has been undertaken to meet them. I'd like to begin by explaining how we have evolved. Created in the fall of 1999 by bipartisan legislation sponsored by former Congressman Rick Lazio, the Seniors Commission was not formally appointed until January 2, 2001. We recognized our creation as a rare opportunity to be proactive - to be creative. Serving the overwhelming and diverse population to come is a task requiring considerable preparatory work - it cannot be handled overnight and "more money" is an oversimplified and inadequate solution. Rather, the task will necessitate substantial changes in federal, state and local policies, service delivery and funding.

Throughout 2001, the Seniors Commission launched a nationwide dialogue on senior housing, health care and supportive service issues. We organized and conducted a series of coast-to-coast field hearings that resulted in our exposure to some of the most innovative thinking and best practices impacting the lives of seniors today.

In Syracuse, NY, Columbus, OH, San Diego, CA, Miami, FL and Baltimore, MD, we listened not just to policy experts, researchers, demographers, government officials, civic leaders, professionals and care providers, but to seniors themselves. At each of our five, day-long field hearings we allocated time in the program to allow every concerned senior present to address the Commission. We listened closely and were moved deeply as seniors and their loved ones told us, in their own compelling words, about the housing and health challenges they face each and every day.

As a result, the Commission learned that the needs of seniors are quite diverse and that the ways in which those needs may be met are equally diverse. We learned that there are policies that work for many, but not necessarily for all. What works in some cities does not necessarily work in others or in rural or suburban areas. What works for some seniors doesn't for others, or is unavailable altogether. We learned that many government programs do not function collaboratively, and that their failure to do so imposes added burdens on the very individuals they are intended to help. We learned that government, the private sector, non-profits and faith-based organizations can and must do more today to address the existing and future needs of our growing senior population.

The Seniors Commission's national dialogue highlighted what we consider to be America's "quiet crisis" - the senior housing and health care challenges we will face as the Baby Boomer generation reaches retirement age. Today, as we summarize our key findings, the Seniors Commission urges broad acknowledgement of this crisis. The legacy of this panel, and that for which each Commissioner hopes, is for Congress, the Administration, state and local government, the private sector, non-profits and faith-based organizations to recognize that responding to the senior housing and health concerns we have identified must be a national priority. President Bush, in his recently-announced, progressive housing initiative to promote homeownership and to increase the supply of affordable homes, has demonstrated his leadership by identifying housing as a national imperative.

The Commission's report contains data reflecting the present needs of seniors and how they are met, and allows us to predict the range of future need. Today, nearly 68% of Americans own their own home, and that figure is over 80% among those aged 50 and above. Further, of those aged 50+ homeowners, 58% own their home free and clear.1 This pattern is likely to prevail in the future, perhaps to an even greater extent if our projections hold true. Aware of this, the Commission took a serious look at health policy, especially with regard to long-term care affordability, availability and accessibility. It is apparent that health policy, especially long-term care, compels individuals to leave their homes to receive care, favors institutional settings and is often prohibitively expensive. Therefore, the Commission strongly recommends encouraging the provision of Home- and Community-Based Services (HCBS).

The senior population is expected to grow dramatically over the next thirty years due to the aging Baby Boomer generation. In 2011, this generation will begin to retire. By 2020, they will number close to 54 million and by 2030, they are expected to number 70 million. One in five Americans will be a senior.2 America's future seniors are now in their 30's, 40's, and 50's. In nine short years, the first wave of this generation will reach age 65, and begin to test our nation's senior resources.

The prime focus of our mandate is housing and health facility needs. Housing and health-related needs data is vital to producing a picture of the future needs of senior Americans. Information on income and federal investment is also important to a thorough analysis. Both factors give context to the scope of need demonstrated by existing housing and health data. The income of seniors is an essential factor in predicting their ability to cope with the challenges of aging.

A key trend is the gradual percentage reduction in the low-income and poverty level population. In general, we expect the Baby Boomers to begin their retirement years in a better financial position than that of their parents. They will be a generation of consumers who are accustomed to personal independence, financial planning and consumer choice - their needs and expectations will differ greatly from those of our current seniors, as will their health, wealth and social attributes. While this trend is expected to continue, the large volume of Baby Boomers moving through the various age cohorts during the period beyond 2010 will, nevertheless, test the limits of our housing and health system. Even if increasing incomes are assumed, large numbers of low-income seniors will continue to require significant assistance, and many middle-income seniors will find themselves on the precipice of hardship due to unforeseen health or housing expenses that may not be addressed by present policy.

The different forms of assistance, the different benefits offered in each government application, and the different income qualifications impact numerous seniors. Rent-assisted housing often has the broadest eligibility of the means-tested programs because of the Department of Housing and Urban Development's use of Area Median Income (AMI) as a guide. Medicaid, on the other hand, uses variations of Supplemental Security Income eligibility that relate to the Federal Poverty level (FPL).3 In many areas of the Nation, the differing standards do not make a great difference. However, in high cost areas, they are very important, because the HUD standard tends to be more lenient, creating a disparity between eligibility for housing and eligibility for the types of health or health-related benefits many need, and that are only subsidized effectively under Medicaid.4 In contrast, in other areas, individuals are eligible for Medicaid, but not for subsidized housing. The Commission addresses these complex issues in its recommendations.

The Commission heard one, consistent message: seniors wish to age in place, which may mean in a private home, a congregate community or another location of their choosing. If it can be done safely and efficiently, it should be done. We have always been a Nation that puts a high value on liberty and choices. Smart policy, providing the appropriate level of care and securing effective assistance in the home can avoid premature placement in institutional settings and save scarce resources for those who truly need the extensive and costly level of care provided by those settings.

The Senate Aging Committee has recently conducted 13 hearings, and has reported that government program spending on long-term care will absorb nearly 75% of all federal revenues by the year 2030.5 Already, in 2001, state Medicaid programs paid about 62% of the $137 billion spent nationally on long-term care.6 Key witnesses at the June 20, 2002 Senate hearing suggested that our government could realize savings if Medicare and Medicaid funds could be blended to evade service duplication and if states could utilize Medicare and Medicaid funding to reimburse preventive care, thereby allowing seniors to remain at home, as opposed to moving to more costly institutional settings.7

Modest assistance for home modifications or repairs can allow seniors to remain in their homes, thereby reducing the need to build additional, affordable rental housing properties. Furthermore, service-related assistance for seniors, once again, in the home, allows them to remain in the community, reducing the overall cost to taxpayers. In an institutional setting, for many seniors receiving government assistance, the government is paying for their housing and their health services. By subsidizing health services in the home setting, substantial savings are realized. Only in the most desperate of health situations, does an institutional setting achieve real cost benefits. Providing home-based assistance allows seniors to maintain their independence and dignity, and it should be encouraged.

While there will always be a need for the skilled nursing facility level of care, Home- and Community-Based Services offer an alternative that is appropriate for most, except the very frail or seriously ill, who do not have the benefit of informal caregivers and, therefore, require intensive and extensive support. The Federal government's involvement in the funding of such services under the Medicaid program largely began with the use of Medicaid waivers.8 Many state-funded programs have also recognized HCBS.9 Although the greatest use of HCBS has been to support the de-institutionalization and expansion of community services for individuals with developmental disabilities, the waivers have become increasingly useful as a means to finance services for low-income seniors. States may also provide personal care services through the "Personal Care Option" under Medicaid, though personal care tends to be limited to non-medical types of care.10

Commission research projects that, in 2020, 4.2 million seniors will need personal care, including 2.4 million seniors with incomes under 250% of the poverty level. Another 3.2 million will require skilled home care with 2.3 million under 250% of poverty. Coverage for such services under federal and state programs becomes more limited as income increases, since Medicare is far more restrictive in its coverage of such services.11 Given the unprecedented growth in need for these services and the present limited levels of access to such services, the Commission has developed several recommendations to improve the availability of services to seniors, regardless of their residential setting.

The Commission recommends that Congress encourage states to continue to develop Home- and Community-Based Services as the preferable and cost-effective alternative to facility-based skilled nursing care under the Medicaid Program. For example, enacting a "shelter deduction" will help HCBS gain parity with institutional settings by changing the home from a liability in terms of qualifying for assistance, to an asset that reduces the overall cost of providing services by removing the costs associated with the institutional component.

Source: Burwell, HCFA 64 Data

The Commission also recommends that Congress examine ways in which Home- and Community-Based Services can be modified to more efficiently and effectively support services to seniors with chronic disabilities or illnesses. The Commission believes that it is the reform, rather than the reduction of Medicare spending, that has the potential for savings.

Source: Burwell, HCFA Data

In addition, the Commission recommends private sector solutions. We encourage Congress to provide incentives to purchase long-term care insurance to reduce both the overwhelming out-of-pocket burden on seniors and the pressure on the public support systems.

For many seniors, greater availability of, and investment in, long-term care insurance will provide them with a more secure future and allow them to save their financial resources. It is important that diverse, quality products be developed and promoted. Deductibility for long-term care insurance should be a part of any future tax proposals.

I opened my remarks with a discussion of our health recommendations since, as we delved into the issues, the level of frailties and the fragmentation of services combined with the large number of senior homeowners of all incomes indicated to us that perhaps health and health-related services are a wider problem than the lack of affordable housing. Clearly, however, there are shortages of affordable housing and there is a need for more of it. There is also a need for such housing to be modified or constructed with the needs of seniors in mind.

To accommodate those seniors who cannot afford market rate housing, there is clearly a need for more affordable housing production. Although the American Housing Survey is, perhaps, the best data set available on housing, several Commissioners identified serious flaws in it, and additional research using other data sets, especially on income, served to reinforce their concerns.

Comparison of Income Reported in American Housing
Survey and Current Population Survey, 1999
  AHS CPS Difference
All Households
Median $35,961 $40,816 -11.90%
<$15,000 21.00% 16.50% 27.30%
<100% poverty 14.70% 9.30% 58.10%
Age 65+ Householders
Median $19,712 $22,812 -13.60%
<$15,000 39.30% 29.80% 31.90%
<100% poverty 19.00% 11.40% 66.70%
<30% AMI 27% 17% 58.80%
<50% AMI 50% 39% 28.20%
Source: The Lewin Group tabulations of the 1999 American Housing Survey and the March 2000
Current Population Survey (which reports 1999 income). Prepared for the Commission on
Affordable Housing and Health Facility Needs for Seniors in the 21st Century, (March 2002).

These, coupled with the Harvard Joint Center for Housing Studies' projections of greatly increased senior homeownership and an awareness that, in some communities, subsidized housing units remain vacant, raises a cautionary flag about proceeding too vigorously with housing production.12

Consolidated Projections of the Joint Center on Housing Studies
  Owner Households Renter Households Total Households Ownership Rate
Age Groups and Year
Age 65-75 9,470,000 1,972,000 11,442,000 82.80%
Age 75 and Over 8,784,000 2,637,000 11,421,000 76.90%
2000 Totals 18,254,000 4,609,000 22,863,000 79.80%
Age 65-75 16,880,000 2,790,000 19,670,000 85.80%
Age 75 and Over 12,424,000 2,838,000 15,262,000 81.40%
2020 Totals 29,304,000 5,628,000 34,932,000 83.80%
The data found in this chart can be found on page 29 of the Joint Center's report.

What is clear is that shortages exist, and in some communities they are very serious. They are likely to continue unless relieved by significant increases in production.

Some of the key recommendations in our Report are:

  • Preservation, modernization and retrofitting of existing affordable senior housing;

  • Expansion of all types of assisted housing in order to meet market demand;

  • Expansion of the role of Government Sponsored Enterprises in supporting senior housing needs;

  • Encouragement of service-enriched, senior housing development by streamlining regulatory processes and coordinating agencies that interface in the provision of housing and services at the federal, state and local levels; and

  • Redesign of programs to reflect the real needs of individual seniors, while providing enough flexibility to ensure that localities have the most appropriate tools to meet local needs, rather than imposing "one-size fits all" solutions.

By moving in these directions, the needs of the growing senior population can be met. To reiterate, our Report has more than forty recommendations; it is our tool for change - a document that looks to the future in a realistic manner. I encourage you to examine the recommendations closely and to explore their implications and impacts.

Will Rogers once said, "Even if you're on the right track, you're gonna get run over if you just sit there." The members of the Seniors Commission did not just sit there. And we believe our recommendations will take the Nation farther down the track toward ensuring affordable housing and addressing health facility needs for seniors in the 21st Century.

Co-Chairing the Seniors Commission has been a valuable experience and opportunity for me to participate in developing a comprehensive, bipartisan and national policy statement on the issues I care about so deeply, and I have enjoyed serving you and working to find solutions to improve the lives of American seniors.

I thank you for this valuable opportunity.

1 United States Census, Housing Vacancy Survey, First Quarter, April 2002, Graph of Homeownership Rates.

2 Older Americans 2000: Key Indicators of Well-Being, Federal Agency Forum on Aging-Related Statistics (August 2000): Indicator I.

3 100% SSI is approximately 74% FPL; both are national standards, with minor exceptions.

4 Robert Mollica, Personal Care Services: A Comparison of Four States, AARP (March 2001).

5 McKnight's Online Daily Update (June 24, 2002).

6 Lewin Group Report to the U.S. Department of Health and Human Services, as reported in McKnight's Online Daily Update (June 24, 2002).

7 Senate Aging Committee Report, "Aging Committee: Hearing Finding Summary," as reported in McKnight's Online Daily Update (June 24, 2002).

8 Valerie Lewis, Medicaid Waivers: California's Use of a Federal Option, Medi-Cal Policy Institute (March 2000): 5-6,

9 Enid Kassner, Loretta Williams, "Taking Care of Their Own: State-Funded Home- and Community-Based Care Programs for Older Persons, AARP, (1997)

10 Robert Mollica, Enid Kassner, Personal Care Services: A Comparison of Four States, AARP (2001), 1-2.

11 Mollica, 4.

12 State of the Nation's Housing 2001, Harvard Joint Center for Housing Studies, (2002) 29.

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The page was last modified on July 12, 2002