[Senate Hearing 107-]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107- 985


                    THE PRELIMINARY FINDINGS OF THE
                  COMMISSION ON AFFORDABLE HOUSING AND
                   HEALTH FACILITY NEEDS FOR SENIORS
                          IN THE 21ST CENTURY

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

HOW WE CAN WORK BETTER TO MEET THE NEEDS OF A GROWING SENIOR POPULATION 
                            IN THIS COUNTRY

                               __________

                             JUNE 27, 2002

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


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                            WASHINGTON : 2003
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  PAUL S. SARBANES, Maryland, Chairman

CHRISTOPHER J. DODD, Connecticut     PHIL GRAMM, Texas
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
ZELL MILLER, Georgia                 CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware           RICK SANTORUM, Pennsylvania
DEBBIE STABENOW, Michigan            JIM BUNNING, Kentucky
JON S. CORZINE, New Jersey           MIKE CRAPO, Idaho
DANIEL K. AKAKA, Hawaii              JOHN ENSIGN, Nevada

           Steven B. Harris, Staff Director and Chief Counsel

             Wayne A. Abernathy, Republican Staff Director

                  Martin J. Gruenberg, Senior Counsel

                    Jennifer Fogel-Bublick, Counsel

               Jonathan Miller, Professional Staff Member

                 Mark A. Calabria, Republican Economist

           Sherry E. Little, Republican Legislative Assistant

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        THURSDAY, JUNE 27, 2002

                                                                   Page

Opening statement of Chairman Sarbanes...........................     1

Opening statements, comments, or prepared statements of:
    Senator Allard...............................................     2
        Prepared statement.......................................    18
    Senator Reed.................................................     2
        Prepared statement.......................................    18
    Senator Corzine..............................................    18

                               WITNESSES

Ellen Feingold, Co-Chair, The Commission on Affordable Housing 
  and Health Facility Needs for Seniors in the 21st Century......     4
    Prepared statement...........................................    19
John Erickson, Commissioner, The Commission on Affordable Housing 
  and Health Facility Needs for Seniors in the 21st Century; on 
  behalf of Nancy Hooks, Co-Chair................................     4
    Prepared statement of Nancy Hooks............................    22

                                 (iii)

 
                    THE PRELIMINARY FINDINGS OF THE
                    COMMISSION ON AFFORDABLE HOUSING
                     AND HEALTH FACILITY NEEDS FOR
                      SENIORS IN THE 21ST CENTURY

                              ----------                              


                        THURSDAY, JUNE 27, 2002

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 10:18 a.m. in room SD-538 of the 
Dirksen Senate Office Building, Senator Paul S. Sarbanes 
(Chairman of the Committee) presiding.

             STATEMENT OF CHAIRMAN PAUL S. SARBANES

    Chairman Sarbanes. The hearing will come to order.
    I want to thank our witnesses, Ellen Feingold, who is the 
Co-Chair of the Commission on Affordable Housing and Health 
Facility Needs for Seniors in the 21st Century, and John 
Erickson, who is a Commissioner, for appearing before us this 
morning.
    Nancy Hooks, who is the Co-Chair with Ellen Feingold, was 
scheduled to be here, but she had a family emergency and was 
not able to be present.
    John, we are most appreciative to you for your willingness 
to step in on very short notice.
    We are very much looking forward to hearing our witnesses 
on how we can work better to meet the needs of a growing senior 
population in this country. In fact, as I understand it, by 
2030, less than three decades from now, the elderly population 
in America will double to 70 million people, and it will then 
comprise 20 percent of our population.
    Currently, the figure is 12\1/2\ percent. So in 30 years, 
we will go from 12\1/2\ percent to 20 percent of our population 
being elderly.
    In our work on this Committee, it has become apparent that 
there is an affordable housing crisis, one that touches every 
part of the country, every segment of society. In hearings that 
were held earlier this year, we heard that the need for 
affordable housing continues to grow with almost 13 million 
American families paying over half their income toward rent. 
Working people are finding it more and more difficult to afford 
a decent home for their families.
    We have reviewed the general housing problems of Americans, 
but we have not fully focused on the housing needs of this 
fast-growing segment of our population, the elderly. For too 
many seniors, especially those who rent their homes or those 
living on fixed incomes, decent and safe housing is not within 
reach.
    There are currently six needy seniors for every available 
unit of affordable senior housing. There are over 300,000 units 
of affordable senior housing at risk of being lost, and it is 
estimated that 35 percent of all seniors pay more than they can 
afford for housing.
    As the Seniors Commission finds in its Report, the housing 
shortage will become worse in the coming years. The Commission 
referred to this as a ``quiet crisis,'' a crisis that has not 
yet come to the public's attention, but one that we cannot deny 
or ignore, and of course, one purpose of this hearing is to 
help to bring it to the public's attention.
    As we look ahead, as I indicated, in the not too distant 
future, one out of every five Americans will be a senior 
citizen and we need to begin to address new programs and 
services to meet their needs. The Commission outlined the 
housing and health care needs they would face, and given the 
current shortage of housing, it is clear we must start 
preparing now to meet these needs.
    I want to make this observation.
    When we talk about the housing needs of elderly people, we 
are not only discussing bricks and mortar, the physical 
structure, we also need to address the necessary supportive 
services. Housing and services are interrelated. In fact, the 
ability of an elderly person to remain in their home is 
frequently dependent upon the availability of adequate 
services. Too often, the only options available to seniors are 
to remain in their homes, which are lacking the necessary 
services, or move to restrictive institutionalized settings.
    Not everyone is fortunate enough to have the kind of 
imaginative and responsive lifestyle that John Erickson has 
developed with great success in meeting this challenge.
    When the Congress established the Commission on Affordable 
Housing and Health Facility Needs for Seniors in the 21st 
Century, that was established in the 2000 HUD/VA Appropriations 
Act. We charged the Commission with conducting a study, and 
submitting a report to Congress outlining the housing and 
health facility needs of the elderly and making recommendations 
for how to best meet these needs.
    Originally, there was a deadline of this past December 31. 
This was extended to June 30 of this year. In fact, we are 
almost there.
    Mr. Erickson. To the edge.
    Chairman Sarbanes. With the data compiled by the 
Commission, we will have a better understanding of just how 
large a problem we face. I understand that the Commission will 
have both the Majority and Minority Report, which, as I 
understand it, differ in the extent of their recommendations.
    But there is much common ground in the two statements. Both 
ask us to continue pushing for greater funding of housing 
programs, to ensure that we maintain the housing supply and 
that we have and expand the stock of affordable housing. Both 
seek better coordination of Federal housing and health care 
programs. And the Report will obviously reinforce the work that 
this Committee has been doing on the affordable housing issue.
    I look forward to hearing from our witnesses this morning 
on the findings of the Commission and the ways that the 
Congress might address their recommendations to make sure that 
our senior citizens can live a life of dignity.
    These, after all, are the men and the women who have built 
the strength of this country and it is only appropriate and, in 
fact, meeting an important responsibility that in their senior 
years, they be able to live in dignity.
    I think these Reports will help us to counter this coming 
crisis.
    Senator Reed and Senator Allard, who are the Chairman and 
Ranking Member of the Subcommittee on Housing, have been 
conducting a series of hearings on this important question. 
Both have had a very keen interest in the issue and I am 
delighted that both are here with us this morning.
    Since I go in this direction first, I will yield to Senator 
Allard, and then to Senator Reed.
    Senator Allard.

                COMMENTS OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I understand we have a vote 
about 10:50. Is that correct?
    Chairman Sarbanes. It is sometime shortly.
    Senator Allard. Yes. So, I would just like to put my 
statement in the record, so we can move forward and hear from 
the panel.
    But I would also express appreciation for Rita Poundstone, 
who works with the Colorado Housing and Finance Authority, 
serving on this Commission. I have worked closely with the 
Colorado Housing and Finance Authority and think it is a great 
organization.
    Chairman Sarbanes. Thank you. Your full statement will be 
included in the record.
    I say to the witnesses, that was a very gracious gesture on 
Senator Allard's part.
    [Laughter.]
    Given the way things work around here.
    Senator Reed.

                 COMMENTS OF SENATOR JACK REED

    Senator Reed. Thank you, Mr. Chairman. I will also 
graciously ask that my statement be placed in the record.
    [Laughter.]
    Let me just quickly welcome Commissioner Feingold and 
Commissioner Erickson and thank them for their work and the 
fellow Commissioners for their great work.
    Our challenge is to preserve senior housing. It is to 
expand senior housing through increased production programs. 
And it is also to ensure that the services are available. This 
is a particularly vital issue in my home State of Rhode Island. 
We rank sixth in population of people age 65 years and older.
    So these are critical issues for all of us, but 
particularly for my home State. I look forward to working with 
Chairman Sarbanes and Senator Allard, my colleague on the 
Subcommittee.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Very good. Thank you, Senator Reed.
    Now, we are ready to hear from the witnesses. And Ellen, as 
the Co-Chair, I think we will turn to you first. If you want to 
take a moment or two to introduce your fellow Commissioners 
that are here with you today, we invite you to do that as well.

                  STATEMENT OF ELLEN FEINGOLD

         CO-CHAIR, THE COMMISSION ON AFFORDABLE HOUSING

             AND HEALTH FACILITY NEEDS FOR SENIORS

                      IN THE 21ST CENTURY

    Ms. Feingold. Thank you, Mr. Chairman. I would be very glad 
to do that. And then after I have made the introductions, I 
would like, with your consent, to ask Mr. John Erickson to 
present the Majority Report.
    It seems to me appropriate that the Majority Report come 
before the Minority. But I will accept your invitation to 
introduce our Commissioners.
    Chairman Sarbanes. Fine.
    Ms. Feingold. We have with us, starting at the end, 
Commissioner Baumgarten from----
    Chairman Sarbanes. Why don't each of you stand as you are 
introduced?
    Ms. Feingold. --the State of Oregon. We have Commissioner 
Poundstone, whom Senator Allard introduced, from the State of 
Colorado. We have Commissioner Sykes from Madison, Wisconsin. 
We have Commissioner Thomas from Seattle, Washington. We have 
Commissioner Protulis, who I think at the moment is from 
Florida. Is that correct?
    Mr. Protulis. Maryland. Maryland.
    [Laughter.]
    Ms. Feingold. Maryland. Maryland.
    [Laughter.]
    Yes.
    Mr. Protulis. And everybody else behind me is from 
Maryland.
    [Laughter.]
    Chairman Sarbanes. Yes.
    Ms. Feingold. We have our Executive Director Gerard Holder 
and our Associate Director Dina Elani. And I am very pleased to 
introduce you to our principal consultant on the demographics 
of this problem. This is Dr. Stephen Golant, from the 
University of Florida.
    We asked him to join us at the very last minute because we 
thought you would probably have more serious questions about 
the numbers than either John or I are expert about. Steve 
Golant is here to be of help to all of you.
    Now, with your consent, may I turn this over to 
Commissioner John Erickson?
    Chairman Sarbanes. We would be very happy to hear from you, 
Commissioner.

                   STATEMENT OF JOHN ERICKSON

           COMMISSIONER, THE COMMISSION ON AFFORDABLE

             HOUSING AND HEALTH FACILITY NEEDS FOR

                  SENIORS IN THE 21ST CENTURY

               ON BEHALF OF NANCY HOOKS, CO-CHAIR

    Mr. Erickson. Thank you very much, Chairman Sarbanes, and 
Senators. I appreciate the opportunity to be here today, and 
for holding this hearing.
    As you said, I am John Erickson, and for the record, 
Chairman of Erickson Retirement Communities, a Baltimore-based 
company that is a national provider of senior housing.
    As 14 Commissioners, with vastly different backgrounds and 
life experiences, 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 offers 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.
    Our Congressional mandate laid out extensive expectations, 
and I am pleased to report on the vigorous effort that has been 
undertaken to meet them. Serving the seniors to come is a task 
requiring considerable preparatory work--it cannot be handled 
overnight and ``more money'' is an oversimplified and 
inadequate solution.
    The Seniors Commission has 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 an array of innovative thinking and 
best practices.
    At each of the five field hearings, we allocated time to 
allow seniors to address the Commission and we listened closely 
and were moved deeply as seniors and their loved ones told us 
about their own difficulties in housing and health challenges 
that they faced every day.
    As a result, the Commission learned that the needs of 
seniors are quite diverse and that the ways in which these 
needs need to be met are equally diverse. What works in some 
cities does not necessarily work in others or in rural or 
suburban communities. What works for some seniors doesn't for 
others, or is even 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 people 
that they hope to try and serve.
    The Seniors Commission has highlighted 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, we call upon the 
Congress, the Administration, State and local governments, the 
private sector, nonprofits and faith-based organizations to 
recognize that senior housing and health services must become a 
national priority. President Bush recently announced his 
progressive housing initiative to promote homeownership and to 
increase the supply of affordable homes, and has demonstrated 
his leadership by identifying housing as a national imperative.
    The Commission's Report contains data reflecting the 
present needs of seniors, and allows us to predict the range of 
the future need. Fortunately, all of the people that will be 
seniors using up our health services are currently alive today, 
so we have a lot of information about what to expect.
    Right now, more than 80 percent of seniors own their own 
homes. And of those, above the age of 50, almost 60 percent 
have their homes free and clear. This pattern is likely to 
prevail, and in the future, it might even extend to a greater 
condition. So, 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 people 
to leave their homes in order to receive care, favors an 
institutional settings and is often prohibitively expensive. 
Therefore, the Commission recommends encouraging the provision 
of Home- and Community-Based Services wherever possible.
    In general, we expected Baby Boomers to begin their 
retirement years in better financial position than their 
parents. They 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 Commission heard one, consistent message--seniors wish 
to age as best as they can in place, which may mean in a 
private home, a congregate community environment, or another 
location of their choosing. If it can be done safely and 
efficiently, it should be done. 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 
these extensive and costly levels of care.
    The Senate Aging Committee has recently conducted 13 
hearings, and if you extrapolate the current usage for long-
term care costs, it would ultimately absorb 75 percent of the 
total budget in the year 2030.
    So, obviously, we have to make some changes.
    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. 
Furthermore, service-related assistance for seniors, once 
again, in the home, will allow 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 not only paying for their health services, but 
also for their housing. By subsidizing health services in the 
home setting, substantial savings could be realized. So 
providing home-based assistance allows seniors to maintain 
their independence and their dignity, and we certainly 
encourage you to make it available at every possible 
intersection.
    Enactment of a shelter deduction will help the Home- and 
Community-Based Services gain parity with institutional 
settings, just 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 this 
institutional component. Currently, it works against seniors to 
stay home and is qualified as income. But if it allowed them to 
have services, we could take that as a deduction.
    The Commission strongly recommends private-sector 
solutions. We encourage Congress to provide incentives to 
purchase long-term care insurance, to reduce the overwhelming 
out-of-pocket burden on seniors, and the pressure on the public 
support systems. Deductibility of long-term care insurance 
should be a part of any tax planning in the future.
    I focused on our health recommendations since, as we delved 
into these issues, the levels of frailty and the fragmentation 
of services combined with a large number of senior homeowners 
of all incomes indicates to us that perhaps health and health-
related services are an even 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 
no doubt about that.
    There is a need for such housing to be modified and 
constructed with the needs of seniors in mind. Although the 
American Housing Survey is, perhaps, the best data set 
available on housing, several Commissioners identified serious 
flaws with that housing index, and additional research using 
other data sets, especially on income, serve to reinforce their 
concerns.
    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. What is clear is that 
shortages exist, and in some communities, they are extremely 
serious.
    Some key recommendations in our Report: The preservation, 
modernization, and retrofitting of existing affordable senior 
housing--very important; expansion of all types of assisted 
housing programs in order to meet market demand; expansion of 
the role of Government Sponsored Enterprises, GSE's, in 
supporting senior housing needs; encouragement of service-
enriched, senior housing developments by streamlining 
regulatory processes and by coordinating agencies that 
interface in the provision of housing and services at the 
Federal, State, and local levels; and finally, the 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 a ``one-size-fits-all'' type of solution.
    By moving in these directions, the needs of the growing 
senior population can be met. To reiterate, our Report has more 
than 40 recommendations; it is a 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 their impacts.
    On behalf of Nancy Hooks, I thank you for this experience 
and the opportunity to participate in developing a 
comprehensive, bipartisan, and national policy statement on 
issues that we all care so deeply about.
    Thank you, Senator Sarbanes.
    Chairman Sarbanes. Thank you very much, John.
    Those lights up there on the clock indicate that we are now 
more than halfway through the time for the vote. That is why my 
colleagues have been leaving. So, I have to recess the hearing 
for a few minutes while we go and vote, and then we will return 
and will hear Ms. Feingold's statement and have a question 
period.
    The hearing stands in recess.
    [Recess.]
    Chairman Sarbanes. The hearing will now resume and we will 
hear from Ms. Feingold.
    Ms. Feingold. Thank you, Mr. Chairman.
    For the record, I am Ellen Feingold. I am the Co-Chair of 
the Commission on Affordable Housing and Health Facility Needs 
for Seniors in the 21st Century. I am also the President of 
Jewish Community Housing for the Elderly in Boston, which is a 
nonprofit nonsectarian developer, owner, and manager of over 
1,000 units of Government-funded housing for low-income 
elderly.
    It is relevant for this Commission that I am also a founder 
of an organization called the Committee to End Elder 
Homelessness.
    Every year in Boston, we do a census of elder homelessness. 
And this year, there were over 400 seniors who were homeless in 
the month of January in Boston. If you want to see the problem 
of lack of housing for seniors writ large, look at seniors who 
have become homeless.
    I want to thank the Committee and especially thank Chairman 
Sarbanes for inviting me and the rest of the Commission to 
testify before you.
    I also want to thank Congressman Barney Frank for the 
privilege of appointing me in concert with Senators Kerry and 
Mikulski, and Congressman Mollohan.
    This has been a rare opportunity for me, I appreciate it 
deeply.
    When we were doing introductions before, I did not 
introduce you to the people who represent those whose problems 
we have solved. I would like to introduce you to about 60 
seniors in this room who are residents of Government-supported 
senior housing. Will you all stand up?
    [Applause.]
    They are residents of housing which has been developed by 
the Elderly Housing and Development Corporation of which 
Commissioner Protulis is the Director. Commissioner Protulis 
has made sure that there have been seniors at every single one 
of our public hearings. Some of them have testified before us, 
but many have sat and listened and they have applauded our 
efforts because there is nobody who understands the problems, 
and also the value of the solutions, the way these people do.
    I am thrilled that you are all here. Thank you so much.
    I come before the Committee as someone who has dealt with 
the problem of providing decent, supportive housing for elderly 
persons for over 20 years. The average age of residents in my 
housing is over 80, and their incomes average $10,000 a year or 
less. They are very old. They are very poor. And they are 
increasingly frail. I know first-hand how valuable the programs 
are that the Federal Government provides for helping people to 
live decent lives.
    In the Commission's Report, you will find examples of how 
these programs are used creatively, how they are blended 
together, how we make a great stew out of some very disparate 
Government products that were never designed to work together. 
But we also know the inadequacy of the quantity of the 
resources we have.
    My organization has 1,050 apartments. They are all occupied 
all the time. We have no vacancy rate. And there are 1,800 
people on our waiting list.
    The Section 202 program allocates around 150 to 175 
apartments per year to Massachusetts. I could use all of it for 
10 years and I still wouldn't house my waiting list. We need 
resources desperately.
    Every day, people call me and my staff pleading, desperate, 
looking for housing. They probably call your staff, Mr. 
Chairman, and your staff probably calls me or people like me, 
saying, what can you do for my boss' constituent? My answer is 
nothing, for 6 years. They have to get on the waiting list. And 
I wind up telling people who are 80 that they have to wait 6 
years for housing.
    Now, Mr. Erickson referred to some places in the country 
that have vacancies in subsidized housing. That is true. But it 
is the rare exception, it is not the rule. The rule is massive 
waiting lists. The rule is people who are desperate. And we 
come before you to ask the Congress to really address this 
problem.
    The question is, how much more do we need?
    Dr. Stephen Golant prepared for the Commission a piece of 
groundbreaking research which is in the Appendix to our Report, 
which quantifies and puts together in one place the issues of 
need, the issues of affordability, and the issues of housing 
condition and accessibility.
    Let me say at this point that the Minority of the 
Commission supports wholeheartedly almost the entirety of the 
Majority Report. The specifics that Mr. Erickson laid out 
before are all specifics that are important. Where we depart 
from the Majority is in quantifying for you the dimension of 
the need, the crisis of the need and to plead with you to 
change priorities so that we can begin to meet the need.
    The Minority Report differs from the Majority Report in 
four crucial areas. Number one, increased housing production 
goals. Number two, using our resources first to meet the needs 
of the poorest and the frailest. Number three, begin to make 
major changes in the funding system for services to seniors. 
And number four, to deal with the issue of the resources that 
solving this problem will take.
    We have to start now. We were asked to look at the crisis 
in 20 years. We have to start now because the crisis is now.
    Right now, there are 1.2 million Government-subsidized 
rental units that house 1.3 million people. But there are 6.1 
million very low- and extremely low-income seniors who have 
priority housing problems, who are not now living in assisted 
housing. That is 6.1 million. That, in a sense, is the gap.
    Not all of those 6 million want to live in rent-assisted 
housing. But if you figured that a quarter to a half of them 
do, then we are looking at a gap of 1\1/2\ to 3 million badly 
housed, very poor old people today. Not 20 years from now. 
Today.
    Now if you project that to 2020, Dr. Golant tells us there 
will be 9.5 million very low-income and extremely low-income 
persons with priority housing needs. That is 9.5 million. If 
you figure a quarter to a half of them would move into rent-
assisted housing, that means we would need 2.4 million units 
over the next 17 years, which translates to 140,000 units a 
year, if we are going to catch up in 2020.
    Supposing we looked just at renters. The largest number of 
seniors at all income levels are homeowners, but look at 
renters. There are 2.4 million senior renters who are very low-
income or extremely low-income who are not in rent-assisted 
housing. Figure half of them--because they are renters--might 
be willing to move, would be overjoyed to move into rent-
assisted housing. So today, that number is 1.2 million. In 
2020, if you look just at renters, the very poor, very needy 
renters, there will be 3.2 million. If we were going to house 
half of them, we would need to produce 94,000 units a year.
    It is in the context of those numbers that the Minority 
recommends strongly to you that the Congress begin now to 
authorize 60,000 units a year of housing for low-income 
seniors, either through the Section 202 program or the Rural 
Housing Services Section 515 program, or public housing 
programs, or the low-income units in tax credit properties.
    We also recommend to you, to prevent falling back even 
further, $200 million now for the Affordable Housing 
Preservation Act, to prevent the loss of some 300,000 senior 
units that are at risk today.
    There is no cheap way to do it. If you do it by tax 
credits, you are spending tax money. If you do it by budget 
outlays, you are spending appropriated money. But the wood and 
bricks and steel and plumbers and electricians cost the same. 
There is no way of getting around that building housing costs 
money.
    With respect to supportive services, we echo virtually all 
of the recommendations of the Majority. There are some 
additional recommendations in the Minority Report which are 
worth mentioning.
    One of the problems one faces trying to put housing and 
services programs together is they do not even talk the same 
language. If you ask what is the eligibility for housing, it is 
calculated according to Area Median Income. So it is very 
sensitive to regional variations, local variations.
    If you ask if someone is eligible for Medicaid, that is 
based on a national poverty figure. There are some parts of the 
country where those numbers are similar and there are some 
parts of the country where there are wide disparities.
    In Massachusetts, you can have an income of twice the 
Medicaid income ceiling and be eligible for assisted housing. 
This means that we have many people living in subsidized 
housing who cannot access the services that they need.
    We cannot even understand that problem until we start 
talking the same language.
    So one of our recommendations, a small one, is to change 
the language, change the terminology, and use the Area Median 
Income for both health programs and housing programs.
    The two most dramatic recommendations that we make to you 
have to do with Medicaid and Medicare. Both of those programs 
have done a terrific job at some of what they do.
    Medicare, which dates from 1965, originally cover hospital 
costs--what in 1965 we knew to be the normal, extraordinary 
health needs of older people. We now acknowledge that today's 
normal, extraordinary needs include prescription drugs. So, 
Congress is preparing to add that coverage, which the entire 
Commission supports.
    The Commission's Minority urges you to think seriously of 
adding long-term care service benefits to the Medicare program. 
It will cost both the users and the Government additional money 
in the short run, but Medicare has to become the long-term care 
insurance program for most Americans. We cannot pretend that 
only hospitals and doctors are what elders need. These changes 
will reduce costlier and often unnecessary 
institutionalization.
    The second major change we recommend to you is a change in 
the Medicaid program, which at this time entitles poor people 
to go to nursing homes.
    When Mr. Erickson mentioned someone who lives in his or her 
own home, but for lack of services, has to go to an 
institution, the missing link there is that if that low-income 
person was eligible for services under Medicaid, they wouldn't 
have to go to a nursing home where Medicaid will pay their 
bill.
    There is a Medicaid Home- and Community-Based Waiver 
Program now. It has been very successful. Different States use 
it in different ways. We recommend strongly to the Congress 
that the days of waiver and special demonstrations are over, 
that the Home- and Community-Based Services be rolled into the 
Medicaid program as a central part of that program.
    Finally, I would say to you that we recognize the costs of 
what we are asking for. That the costs are huge. But this 
country has resources. The question is, how are we going to 
allocate our resources? We allocate them in many ways that are 
beautiful and we accomplish great things.
    One of the things we have been enormously successful at is 
stimulating homeownership for people at all income levels. We 
have the highest proportion of homeownership in the world in 
the United States. And that costs us. There is a tax cost to 
the stimulation of homeownership of $60 to $80 billion a year.
    We would like to see Congress think of what $60 to $80 
billion a year would do for the housing needs of low-income 
renters. We would like to see parity. We would like to see poor 
people's housing supported at a level like that. We would like 
to see services for low- and moderate-income seniors supported 
at a level like that.
    The program has succeeded. But it has left people behind. 
And we would urge you strongly to think about how to raise 
funding for low-income assisted housing up to a level that 
begins to meet today's and tomorrow's needs. We shouldn't have 
our mothers and our fathers and our grandparents risking 
homelessness and risking institutionalization.
    We urge you strongly to look at our recommendations and to 
do what needs to be done so that seniors live in health and 
dignity and safety.
    Thank you.
    Chairman Sarbanes. Good. Thank you very much.
    One of the things the Commission did was some very 
important new research, and we very much appreciate a lot of 
this additional material. I think it is going to be very 
helpful to us.
    As I understand it, there are about 325,000 units of senior 
housing that are at risk of being lost to the affordable 
housing stock.
    Ms. Feingold. Correct.
    Chairman Sarbanes. Through the problem of opt-outs. 
Correct?
    Ms. Feingold. That is correct.
    Chairman Sarbanes. I was curious. Is this housing that was 
originally designated for seniors, or are these units that now 
house elderly families through the process of aging in place? 
Do you know?
    Ms. Feingold. I do not know. I can guess, but I do not 
know. I would guess that it is mostly age-segregated housing. 
But I do not know the answer.
    Chairman Sarbanes. Does Dr. Golant know?
    [Pause.]
    Ms. Feingold. It includes everything. But my guess is that 
it is largely senior housing. We will get you the answer. You 
will have the answer shortly.
    Michael Bodaken, who researched preservation issues for the 
Commission, included all HUD-subsidized elderly housing and all 
other assisted multifamily housing in which 50 percent or more 
of the households are age 62 and over. See Appendix G3, page 
13, in the Commission's Report.
    Chairman Sarbanes. I would be interested in that figure.
    Ms. Feingold. Yes.
    Chairman Sarbanes. You said a tiny change to equalize where 
you have to be financially to qualify for affordable housing 
and where you are in order to qualify for Medicaid. As I 
understand your recommendation, it was to move the Medicaid 
qualification standard up to the Area Median Income, which 
would correspond with the housing.
    Ms. Feingold. Correct.
    Chairman Sarbanes. Do you have any idea how much additional 
that would cost in terms of Medicaid benefits?
    Ms. Feingold. We are not reaching that point. What we are 
saying to you is, if Medicaid eligibility were calculated using 
the standard of Area Median Income, we would be able to see 
what that means. Right now, we label the eligibilities by two 
totally different standards and we only know when the human 
being comes in and says, I am eligible for this, but I am not 
eligible for that.
    We do not know what it means.
    We do know that in Boston, you are eligible for housing 
when you are not eligible for services. There are other places 
where you are eligible for services and not eligible for 
housing. So until we are talking the same language, it becomes 
very difficult to deal with.
    Chairman Sarbanes. But we need some factual basis if you 
are going to----
    Ms. Feingold. We are not changing the eligibility yet. 
Using the same standards will provide you with the factual 
basis.
    Chairman Sarbanes. The same language.
    Ms. Feingold. That comes later.
    Chairman Sarbanes. Pardon?
    Ms. Feingold. That comes later. Let me put it this way. If 
the Area Median Income, say, is $50,000, so 50 percent of the 
Area Median Income is $25,000, that is the HUD eligibility 
ceiling. Perhaps the Medicaid eligibility ceiling is $10,000. 
There is a huge gap. We are not saying yet, fill the gap. We 
are just saying, at least talk the same language so that 
people----
    Chairman Sarbanes. I am just trying to find out some figure 
as to the cost if you were to talk the same language. That is 
all.
    You are advocating talking the same language. And an 
important factor in judging that, presumably, amongst other 
things, is what the cost would be.
    Ms. Feingold. Only if you then changed the eligibility. 
Right?
    Chairman Sarbanes. That is the only way you could talk the 
same language.
    Ms. Feingold. No, no. Right now, if you have decided in 
your State that the Medicaid eligibility threshold is $10,000, 
and you define it as 100 percent of poverty, you could also 
describe it as 20 percent of the Area Median Income. The same 
number of dollars could be described as 20 percent of Area 
Median Income or 100 percent of poverty.
    Chairman Sarbanes. So, then, what follows from that?
    Ms. Feingold. What would follow is one would look at it and 
say, well, what makes sense? And you could then decide that it 
doesn't make sense to go much above that, or one could decide 
it should go up 10 or 20 percent, and then one could cost it 
out. Just changing the vocabulary doesn't change the money.
    Chairman Sarbanes. What is the purpose of changing the 
vocabulary if it is not going to change the money?
    Ms. Feingold. So that the person who works for me and has 
to recertify the housing eligibility of our tenants every year, 
also knows without calling somebody else up in another agency 
who is eligible for what.
    HUD housing uses Area Median Income as a standard. And if 
people's eligibility for services were based on Area Median 
Income, we would know who in our buildings was eligible for 
what. We would not have to have them certified for eligibility 
by another agency.
    Chairman Sarbanes. So, you all talk about predatory 
lending. Abusive lending practices I think is the phrase that 
is used in the Report, targeting seniors. This is an issue in 
which this Committee has taken a keen interest. And we found in 
a series of hearings that elderly homeowners are particular 
targets of predatory lending, often because they have 
accumulated a lot of equity in the course of their lifetime.
    What did the Commission find in its hearings and research 
regarding abusive lending practices?
    Ms. Feingold. John, do you want to take that?
    Mr. Erickson. We found that the large entities like Fannie 
Mae and the rest have actually developed very comprehensive 
programs and they have been pretty good at policing to see that 
there are no predatory practices.
    Certainly in the small, less national policies, you could 
still have some abuse. But the reverse mortgage program is much 
more detailed and spelled out so that seniors know what they 
are getting into if they are using mortgages at a late time in 
life to finance their health costs or some of their ability to 
stay at home.
    So the disclosure policies have gotten much stronger. It is 
an area that we did not find widespread abuse, but it was one 
of the areas that did come up and we said that we should be 
particularly cautious about making sure seniors are not 
targeted because they do not have any earnings capacity if they 
do make a bad mistake.
    Chairman Sarbanes. Well, the AARP, of course, has taken a 
keen interest in this issue and we have been trying to work 
closely with them on it.
    We have found evidence of repeated exploitation of the 
elderly, which results in the equity being literally stripped 
away from them through excessive fees, repeated refinancing, 
single-premium credit insurance that is built in, things of 
that sort. In fact, some of the more responsible lenders in the 
field have now ruled out some of these practices, which is a 
real step forward and an encouraging development. We have some 
legislation in that we want to take a look at.
    But there are some very sharp and fast operators who just 
really make victims out of the elderly, and the elderly seem to 
be one of their target groups for exploiting. We are quite 
concerned about that issue.
    How much work did you do on the question of senior housing 
in public housing?
    Ms. Feingold. The largest number of low-income people 
living in Government-assisted housing live in public housing. 
And we are very concerned about that group.
    The Minority Report stresses the need for moving services 
into public housing, for the ability to renovate and retrofit 
public housing so that it can do a better job of housing 
seniors.
    I do not believe we heard a great deal of testimony, but it 
was very clear in looking at the data that we saw. We also have 
among our Commissioners Mr. Thomas, who is the Director of the 
Seattle, Washington, public housing authority and very active 
nationally in housing authority organizations. He brought us a 
lot of the information about this.
    It is a serious problem and our recommendations are that we 

reestablish public housing production programs for seniors. We 
recommend that, contingent on a large increase in Section 202 
authorization, public housing authorities be made eligible to 
use those funds. We do not recommend this change if funding 
remains at today's limited levels because there is a large 
community of developers, nonprofit sponsors who make very good 
use of the Section 202 program.
    But this is a program that really works, and when we get 
enough of it out on the street, we think that public housing 
authorities who exist in some 3,400 communities around the 
country are well-placed to become developers of senior housing 
using that program.
    Chairman Sarbanes. Does the Commission have a view on 
whether housing for the elderly should be, to what extent it 
should be for the elderly and to what extent the elderly should 
be in an affordable housing complex which embraces the 
nonelderly as well?
    Ms. Feingold. I think the watchword of the Commission was 
choice. These are not mutually exclusive. There are some 
elderly who want to live in seniors-only housing. There are 
some elders who love living in a mixed-age community or a 
mixed-income community. The need is enormous. We should meet it 
in every way we possibly can.
    Chairman Sarbanes. In the public housing reform bill we did 
just a couple of years ago, there was an effort to move toward 
greater diversity of income of the tenants.
    Now this runs counter to the proposition that you should 
take care of the poorest first because it means you would have 
people in the affordable housing context who were not at the 
very bottom of the income scale.
    The argument that was made on its behalf was that a better 
mix community in income terms--we are still talking about low-
income people. It is a question of whether you are talking 
about just the very lowest or whether it is a mix in a somewhat 
broader context.
    The argument was that that more diversified community would 
be more stable, that you would have leadership models that 
would be present in the community and that would therefore have 
an impact on a more stable housing environment.
    There are good arguments in both directions, I think. But 
does the same issue arise with respect to senior housing, as 
you see it?
    Ms. Feingold. Most of my buildings are 100 percent low 
income. I have one building that is 15 percent market.
    Chairman Sarbanes. Let's not go there. I mean, let's not go 
to market.
    Ms. Feingold. Market is pretty low. It is just not as low 
as low.
    Chairman Sarbanes. When you say low income, do you take the 
lowest income first?
    Ms. Feingold. We are required to take a certain proportion 
of our tenants with 30 percent of median income.
    Chairman Sarbanes. Right.
    Ms. Feingold. We have the same----
    Chairman Sarbanes. Presumably, all of your tenants could be 
at 30 percent of median income.
    Ms. Feingold. Absolutely.
    Chairman Sarbanes. All right. Well, why don't you do that? 
Why don't you take the very poorest first?
    Ms. Feingold. Well, if you are asking me literally, because 
I am governed by rules that say that I have to take people in 
chronological order that they get on my waiting list. In fact--
--
    Chairman Sarbanes. Do you think that you should take----
    Ms. Feingold. --most of our tenants are at 30 percent. I 
mean, that is why we have tenants whose median income is 
$10,000 a year. Most of our tenants are extremely low income.
    Chairman Sarbanes. Do you think that in some way weakens 
the ability to have a stable housing environment as opposed to 
having more of a mix of income?
    Ms. Feingold. In senior housing, I do not think that this 
is as much of a problem as it is in family housing.
    Again, this is an area where I do not see a need to choose. 
I do not see a need to say, it all must be mixed income or it 
all must be very low income. My experience is that both work.
    The bottom line is an issue of need and how vast the need 
is. Whatever way we go about meeting the need is what we need 
to do. And to get hung up on which is the best way when both 
are good, I think is not productive.
    Chairman Sarbanes. I don't really quarrel with that, and I 
am one who is strongly committed to trying to get more 
resources into affordable housing.
    Ms. Feingold. Good.
    Chairman Sarbanes. But as long as the resources fall well 
short of the need, the kind of questions I have just been 
putting are going to continue to come to the fore.
    Ms. Feingold. I know.
    Chairman Sarbanes. And that is why I was really trying to 
explore your thinking on that part.
    How are we going to coordinate the housing needs and the 
health care needs? What are the prime recommendations you would 
make in order to accomplish that objective?
    Ms. Feingold. Well, we come down very strongly, both the 
Majority and the Minority Report come down very strongly on the 
value of service coordination. Service coordinators are people 
who are staff in senior housing who know the resources in the 
community. For years, I have been hiring them, calling them 
brokers. They link users with resources. That works on the 
ground.
    We would like to create programs that work, so that it is 
not constantly an exercise in creativity to make it work.
    In the State of Massachusetts, we have a number of both 
State-funded and Federally-funded service programs which 
service coordinators link. In some cases, we can run an entire 
program in a housing building. But in many cases, you have to 
do it person-by-person-by-person.
    In our Report, as I say, we come down strongly on the need 
for service coordinators who become expert in what is available 
in their areas and how to assess people for their needs and 
link them with services.
    We are also recommending in the Minority Report a program 
that would enable housing sponsors to access both service money 
and HUD housing money in one application.
    We are suggesting to you that an allocation from HHS, from 
DOT, from the Administration on Aging--that there be funds 
appropriated to those agencies and then provided to HUD, so 
that if I come in applying for funding to build a supportive 
housing development, I go to HUD and I say, I need X-number of 
dollars to build it. I need Y-number of dollars to subsidize 
the rents. I need Z-number of dollars to run transportation. I 
need V-number of dollars to run a meal site.
    These are all pieces of funding money that currently come 
from different agencies. If a piece of money was coming from 
the agency to HUD so that a single application from a sponsor 
could access those funds, you would go a long way to making it 
easy for housers to see that their residents are getting the 
services that they need.
    Look, the bottom line is we have a Government structure 
that separates functions. The silo term has become old hat. 
When I was first appointed to this Commission, I thought, 
great, we are going to figure out a way to punch holes in the 
silos. I had to give up on that.
    What we are looking for now are the small ways in which we 
can make the silos work for us rather than creating constant 
barriers. And one way is to have these pots of money that all 
go to a coherent program that is administered through HUD, 
using the same standards each program establishes. For example, 
the recipients of services would still have to qualify for 
Medicaid.
    The housing sponsor who is getting this piece of Medicaid 
funding which is coming from HHS to HUD to the housing sponsor 
will still have to follow the rules that govern that money. But 
the money will come to one place in one application. You will 
make it immensely easier to carry out the coordination of 
housing and services that you are interested in. So, we are 
recommending that you do a demonstration program of this kind.
    Mr. Erickson. Senator.
    Chairman Sarbanes. Yes, John.
    Mr. Erickson. This is even more important for the 96 
percent of seniors that are not in public housing that are 
either in private rental, or whatever.
    If you look at the vast majority, that 96 percent that are 
in other forms of housing, the ability to begin demonstration 
programs that would capitate Medicare payments and do earlier 
interventions would have a huge impact. The ability to have 
primary care at an early point instead of urgent care in 
hospitals, would shift dollars and make seniors have a much 
higher quality of life.
    Currently, capitation rules are limited under Medicare by 
an entire county instead of by groups.
    And so, we recommended being able to break that down into 
much smaller entities, even a thousand seniors at a time, to 
say, you put in a full-service program under capitation and try 
and cost this and see if you can do a better delivery service 
and move from acute care and institutional care to home and 
community care.
    Chairman Sarbanes. Well, this has been an extremely helpful 
panel and we very much appreciate the Commission's work and the 
Report, which is about to be published, I guess.
    When will it be published?
    Mr. Erickson. We submit tomorrow and it should be printed 
over the weekend.
    Chairman Sarbanes. I thank not only the two of you, but 
also all of the Commissioners and the staff for the 
contributions they have made. I think that it is going to 
contribute significantly to the dialogue as we try to meet this 
challenge, which I think is an extremely important one.
    Ms. Feingold. Thank you so much, Chairman Sarbanes. I would 
like to offer to the Committee staff who are here the time of 
Dr. Golant, who is here for a little while longer. And those of 
you who have questions about the research, he is available to 
you now.
    Chairman Sarbanes. Yes. We appreciate that very much.
    Mr. Erickson. Thank you, Senator Sarbanes.
    Chairman Sarbanes. The hearing stands adjourned.
    [Whereupon, at 11:50 a.m., the hearing was adjourned.]
    [Prepared statements supplied for the record follow:]
               PREPARED STATEMENT OF SENATOR WAYNE ALLARD
    I want to thank the Chairman for holding this hearing. I appreciate 
the opportunity to hear a preview of the Commission's Report today.
    In 1999, Congress created the Commission on Affordable Housing and 
Health Facility Needs for Seniors in the 21st Century. I was pleased to 
be able to help select some of the Commissioners. I was particularly 
pleased to nominate Rita Poundstone to serve as a Commissioner. Rita 
works at the Colorado Housing and Finance Authority, an organization I 
have worked with closely over the years.
    Over the past 2 years, the Commission has held hearings and public 
forums all over the country, commissioned the collection of data and 
compiled data on housing and services for seniors, and created a set of 
recommendations for Congress. We are here today to hear these 
recommendations which will help Congress address the needs of this 
increasing population of seniors in our country over the next decades.
    Over the years, the Congress has enacted some very strong and 
effective housing programs, such as the Low-Income Housing Tax Credit 
and Section 8 Voucher programs. These, and other programs, meet the 
housing needs of many Americans, including seniors. I am interested to 
hear from the Commissioners and to read in the final Commission Report 
suggestions for continuing to met the needs of seniors in our country.
    Thank you, Mr. Chairman.

                               ----------
                PREPARED STATEMENT OF SENATOR JACK REED

    Mr. Chairman, thank you for holding this hearing today.
    We are happy that Co-Chairman Feingold and Commissioner Erickson of 
the Seniors Commission are here today to talk about such an important 
issue--the housing and health facility needs of our Nation's elderly. 
We are looking forward to hearing your recommendations about how to 
address these needs.
    This is an issue near and dear to my heart. In my own State of 
Rhode Island, almost one-fifth of our residents are over the age of 60. 
Approximately 10 percent of Rhode Island's seniors are currently living 
in subsidized housing and many more are currently on the waiting lists 
for such housing.
    About 31 percent of Rhode Island's seniors are paying more than 40 
percent of their income toward their housing. For those over the age of 
75, 36 percent are paying over 40 percent for their housing.
    As the Commissioners are going to testify today, not only do we 
need to start building more units of affordable housing for the Baby 
Boomers that are beginning to enter their senior years, but we also 
need to work together to preserve existing affordable housing for 
seniors.
    I believe this is one of the most important issues before the 
Congress at the moment--how we can preserve our existing senior housing 
stock without losing more of it to market forces. In my own State, 
approximately 11 percent of Rhode Island's affordable senior housing is 
currently in danger of being lost to the market.
    In addition to struggling with the affordable housing issues, many 
seniors are struggling to obtain health care services. As our seniors 
live longer, they are having a harder time meeting their long-term 
health care needs, even when they are Medicare eligible.
    We clearly have a problem. I look forward to the Commission's 
advice and recommendations regarding how the Government can help 
promote, encourage, and if necessary, create elderly housing with 
services for some of our Nation's most vulnerable citizens.
    Most seniors want to remain in their own homes as long as possible. 
This is not only the best choice for them, it is also the best choice 
for the American taxpayer.

                               ----------

              PREPARED STATEMENT OF SENATOR JON S. CORZINE

    Mr. Chairman, I am very pleased that the Committee is holding this 
important and timely hearing today to discuss what is a growing crisis 
in our country--the crisis in long-term care. As we will hear from the 
Commission's Co-Chairs, our country not only faces a long-term health 
care crisis, but also a long-term housing crisis. Indeed, as the 
Commission's preliminary findings show, housing and health needs for 
our Nation's seniors are inextricably linked. We cannot adequately 
address the health needs of our Nation's growing elderly population 
without providing them 
access to affordable housing.
    In the next 30 years, the senior population will grow to more than 
20 percent of the U.S. population. Currently, 20 percent of seniors 
have significant long-term care needs, and as our population lives 
longer this number will only increase. Low-income families nationwide 
face severe housing problems, particularly in New Jersey where rental 
costs are among the highest in the Nation. But, seniors, particularly 
elderly women who generally outlive their spouses and are more likely 
to live alone, face especially complex housing problems. Fifty-seven 
percent of seniors who rent pay more than 30 percent of their income 
for housing and are likely to have significant health care needs.
    Eighteen percent of seniors need assistance with at least one daily 
activity, such as bathing or cooking. Too many of these seniors, 
however, lack access to the 
support services they need to help them ``age in place.'' As a result 
of a shortage of supportive housing and limited access to community-
based services, too many of our seniors have been institutionalized, a 
measure that is both costly and sometimes unnecessary.
    While most States provide access to certain home-based care 
services for elderly Medicaid recipients, these services are not 
guaranteed and are only available to very low-income seniors. Forty 
percent of our senior population has an income below 50 percent of the 
Area Median Income. Yet many of these seniors are not Medicaid 
eligible, and are too poor to pay for home care services or assisted 
living. And, for those who are eligible for Federally-subsidized 
supportive housing, there is too often a long waiting list.
    Nationally, for every one senior living in subsidized housing, 
there are an additional six seniors on waiting lists for such housing. 
In New Jersey, there are nine applicants for every one available 
Section 202 unit. According to the Commission's preliminary findings, 
in order to keep pace with this 6 to 1 ratio, we will need to create an 
additional 730,000 additional rent-assisted units by 2020. And that is 
what we need just to maintain the status quo. The need for affordable 
housing production cannot be understated. There are currently 1.4 
million elderly households that are currently eligible for Federally-
subsidized housing but are not receiving it.
    Mr. Chairman, we have a crisis in this country today that will only 
continue to worsen. As the Commission's findings demonstrate, the 
puzzle of meeting seniors' housing and health care needs requires not 
only creative solutions, but will also require a significant investment 
in the production of affordable and supportive housing that will enable 
our seniors to age with dignity.
    Thank you, Mr. Chairman. I look forward to hearing from our panel.

                               ----------

                  PREPARED STATEMENT OF ELLEN FEINGOLD

  Co-Chair, Commission on Affordable Housing and Health Facility Needs
                    for Seniors in the 21st Century
                             June 27, 2002

    I am Ellen Feingold, Co-Chair of the Commission on Affordable 
Housing and Health Facility Needs for Seniors in the 21st Century and 
also President of Jewish Community Housing for the Elderly, a nonprofit 
nonsectarian developer, owner, and manager of over 1,000 units of 
Government-funded housing for low-income elders in the Boston area.
    I want to thank the Committee and especially Chairman Sarbanes for 
inviting me and my Co-Chair Nancy Hooks to testify before you today. I 
also want to take this opportunity to thank Congressman Barney Frank 
who, together with Senators John Kerry and Barbara Mikulski and 
Congressman Alan Mollohan gave me the great honor of serving on this 
Commission and the opportunity to work with my fellow Commissioners 
toward ensuring that our Nation's elders are well-housed and have the 
health and supportive services they need as we move through the 21st 
century.
    I come before you as someone who has dealt with the problem of 
providing decent supportive housing for elderly persons every day for 
over 20 years. JCHE's residents' average age is over 80, and their 
incomes average around $10,000 a year. They are very old, very poor, 
and increasingly frail. I know first-hand how valuable the tools are 
that the Federal Government has given us to work with, and in the 
Commission's Report we describe the ways these tools are being used 
innovatively to create housing environments in which people can grow 
old safely, with dignity, and with the supports they need to be as 
independent as possible.
    But we also know how inadequate the quantity of resources we have 
are NOW. My organization has 1,050 apartments, all occupied all the 
time, and 1,800 people on our waiting list at any one time. Every day, 
people call me and my staff, pleading for housing for themselves or 
their family members. Often, your staff call me and my colleagues in 
your States on behalf of your constituents who are frantic with worry 
and need. The Commission Report has numbers and statistics describing 
what has become a crisis; but I hear the need from desperate seniors 
first-hand, as do you. What do you tell them? I have to tell them it 
will take years before there will be a JCHE apartment for them. Can you 
imagine telling an 80-year-old that they will have to wait 6 years for 
an apartment? This need for decent, supportive, affordable housing is 
not an abstract issue. These are real people, our own parents and 
grandparents, and their need is critical and urgent.
    The Commission heard this story over and over--and we heard how 
very grateful seniors who live in Government-assisted housing are for 
their quality affordable housing, and we heard over and over that what 
is needed is MORE.
    The Commission is presenting to you a piece of groundbreaking 
research, in which Dr. Stephen Golant of the University of Florida 
quantified today's housing need, and projected this need in 2020. In 
Part III of the Commission Report, Key Findings and Projections, you 
will find a summary of his work, and his analysis of the need and the 
full report is in the Appendix. Dr. Golant found that, for every rent-
assisted unit currently occupied by a senior, there are almost six 
seniors with housing problems--either due to affordability, or poor 
conditions, or other problems--who cannot access decent, affordable 
housing.
    The Commission's Minority supports most of the Commission Report--
its findings and many of its recommendations.
    This Minority Report goes beyond the Majority Report in calling for 
greatly increased housing production goals, for using our resources 
first to meet the needs of the poorest and frailest seniors, for major 
changes in the systems for providing and funding services to seniors, 
and for a commitment to providing the major increase in funding that 
these changes will require. We believe that the only way that our 
Nation can meet the anticipated crisis in supply is by starting NOW to 
meet today's huge need.
    Just how great is the need? Looking at Dr. Golant's Exhibit I (Part 
III, page 3), you will see that there are currently 1.2 million 
Government-subsidized rental units housing 1.3 million seniors. Exhibit 
8 (Part III, page 9) shows that there are currently 6.1 million very 
low- and extremely low-income seniors with priority housing problems 
who are NOT living in those 1.2 million units. In other words, today's 
gap is 6.1 million units. Even assuming that only one-half or one-third 
or even one-quarter of those 6.1 million urgently needy very poor 
seniors want to live in decent rent-assisted housing, you can see we 
are looking at a current deficit of 1.5 million to 3 million units.
    Projecting to 2020, and such projections are, of course, very 
approximate and subject to all kinds of caveats, Dr. Golant estimates 
there will be 9.5 million very low- and extremely low-income seniors 
with priority housing problems. Again, assuming that only one-quarter 
of those seniors want to live in rent-assisted housing, this means we 
should produce 2.4 million units over the next 17 years, or 140,000 
units a year, if we want to be able to provide decent affordable 
supportive housing to the country's seniors in 2020.
    Those numbers are huge! Suppose we do the same set of calculations 
just looking at very low- and extremely low-income renters with 
priority housing problems. Today, there are 2.4 million seniors in that 
category, NOT living in rent-assisted housing. Since they are renters, 
one could predict that a higher proportion of them would live in rent-
assisted housing if it was available. If half of them would do so, this 
means today's deficit for renters is 1.2 million units.
    Dr. Golant estimates that in 2020 there will be 3.2 million very 
low- and extremely low-income renters with priority housing problems. 
To provide decent affordable supportive housing to half of them, we 
should produce 94,000 units a year between now and 2020.
    It is in the context of these numbers that the Commission Minority 
recommends to Congress that it authorize and fund an immediate 
production goal for subsidized elderly housing with supportive services 
of at least 60,000 units a year for the foreseeable future. This 
housing could be developed through the highly successful Section 202 
program, the Rural Housing Service's Section 515 program, public 
housing programs, and the low-income units in tax credit developments.
    You might then ask the question: If we assume that it might take 
94,000 units a year to house those very poor senior renters with unmet 
priority housing needs, and as many as an additional 46,000 units for 
very poor home owners with priority housing problems who might want to 
move to such housing, why recommend only 60,000 units a year? It is the 
Minority's view that it will take time and effort to gear up at all 
levels--administration, producer capacity, regulatory, etc.--to be able 
to utilize an authorization of even 60,000 units. This is a big jump in 
Federal commitment--for example, this year's Section 202 authorization 
was for only 5,800 units, just a few hundred for Section 515, and no 
additional public housing units. The 60,000 units will be a serious 
start to meeting both today's and tomorrow's needs. But less than that 
would indicate an avoidance, a failure of will in heading off the 
crisis.
    The Minority also recommends major funding of at least $200 million 
for the Affordable Housing Preservation Act to stem the potential loss 
of any of the 324,000 affordable elderly housing units at risk.
    With respect to the health and supportive services that seniors 
need to enable them to age well in place, the Minority recommends a 
number of short-term and long-term steps.
    First, we make a series of recommendations that are similar to 
those in the Majority Report to strengthen the highly successful 
Service Coordination Program in senior housing: That the HUD Service 
Coordinator grant program be expanded to all Federally-assisted low-
income housing and its funding increased to a realistic level; that 
public housing authorities be funded to enable them to contract for 
services to their elderly residents; that Medicaid Home- and Community-
Based Services waiver funds be guaranteed for supportive services in 
all Federally-assisted senior housing, including those projects 
utilizing the Assisted Living Conversion Program; and a number of 
others.
    More basic, it is obvious that the current Federal agency 
structure, in which housing and the various services seniors need are 
provided separately by separate Government departments which are 
governed by separate Congressional Committees and separate OMB 
sections, does not lend itself to well-integrated and coordinated 
housing and service programs. When the Commission began its work, I 
thought this would be the single most important focus of our work. 
However, the Commission's limited time-frame and mandate militated 
against in-depth consideration of structural reorganization proposals. 
Instead, the Minority proposes a number of concrete steps that will 
begin the process of creating a coordinated system.
    For example, the Minority recommends a simple change that will make 
eligibility determinations in HUD-funded and HHS-funded programs easier 
to coordinate. Currently, HUD determines program eligibility according 
to the regionally sensitive Area Median Income standard. HHS programs 
use a national standard--either the Federal Poverty Level or the 
Supplemental Security Income level. The Minority recommends that HHS 
program eligibility be based on the Area Median Income to facilitate 
the linking of HUD and HHS programs.
    Similarly, the Minority recommends that HUD and HHS jointly develop 
a uniform definition of assisted living and assisted living services 
for seniors.
    In another more ground-breaking example, the Minority recommends a 
new Aging in Place demonstration program that links funds provided 
through the HHS Home- and Community-Based Service waivers and other 
Federal senior supportive service programs (through AoA and DOT, for 
example), with HUD and RHS rent subsidies to support aging-in-place 
strategies for frail residents.
    These are small steps that can perhaps lead to far greater linkages 
among the programs that help support successful aging.
    And finally, recognizing that the principal payment systems for 
services and health care for seniors are the Medicare and Medicaid 
programs, the Minority offers two recommendations that will begin the 
transformation of these programs for the 21st Century.
    First, we join the call for a Medicare Prescription Drug Benefit. 
The new wonder drugs available today have made possible declining 
hospital utilization rates as more and more serious conditions can be 
treated out of the hospital. But seniors often cannot afford these 
drugs and therefore wind up requiring the far more expensive hospital 
care. The Prescription Drug Benefit has become an essential prong of a 
comprehensive and cost-effective health policy. Likewise, the success 
of today's health care measures is evident in keeping seniors alive and 
relatively well-functioning for many years longer, but brings with it a 
need for home care for the resulting chronic conditions and 
disabilities. Again, without necessary home care, seniors will wind up 
in much more expensive hospital care. The Minority, therefore, 
recommends an expansion of Medicare coverage to include chronic and 
long-term care and prescription drugs.
    Similarly, the relatively complete coverage that Medicaid provides 
to low-income seniors does not require that Home- and Community-Based 
Services be provided on an equal basis with institutional care and 
other Medicaid entitlements. Since Medicaid is a joint Federal-State 
program within which States have wide latitude in designing their 
program, there has been a reluctance to impose a new entitlement on 
States. The Minority believes that putting Home- and Community-Based 
Services on an equal footing with institutional care will, in the long 
run, save money, as it will avoid the far more expensive institutional 
care. More important, it will respect the dignity and choice of seniors 
who wish to remain in their own homes as long as possible. It will also 
enable States to respond positively to the mandate of the Supreme 
Court's Olmstead decision that individuals have the right to choose to 
live in the least restrictive environment that will meet their needs.
    The Minority also stresses the importance of adequate training and 
pay scales for the workers who provide services to seniors and we 
provide a series of recommendations to improve their working 
conditions.
    In closing, you gave the Commission an enormous mandate, to look 
ahead at a problem that is clearly and dramatically growing in scope. 
The Minority believes that denial and wishful thinking have no place in 
trying to solve a problem. We believe that Members of Congress asked to 
know the scope of the problem and the hard realities of its solution. 
The country's unprecedented success that makes possible many more years 
of life for the elderly of our country than were even dreamed about 
just a generation ago has created an unprecedented demand for housing 
and health and supportive services. The hard reality is that there are 
unprecedented costs involved in meeting this demand.
    This country has the resources to pay these costs. The country uses 
them according to our priorities and our commitments. We have used our 
resources with extraordinary success to create the highest rate of 
homeownership in the developed world by permitting the interest we pay 
on home mortgages to be tax deductible--a subsidy amounting to $60 to 
$90 billion in 1999. We must now begin to bring parity in resource 
allocation to the housing and service needs of low-income elders that 
we brought to stimulating homeownership.
    The Minority urges Congress to commit the Nation once again to 
assuring a good old age for its seniors who have contributed so much.
    The effort of this Commission, both Majority and Minority members, 
has been to provide Congress with information and with new tools to 
address the crisis ahead. We have participated in a nationwide dialogue 
which we have reported to you. It is our hope that the outcome will 
result in better health and greater independence for the huge numbers 
of elderly people who will surely need both.

                               ----------

                   PREPARED STATEMENT OF NANCY HOOKS
  Co-Chair, Commission on Affordable Housing and Health Facility Needs
                    for Seniors in the 21st Century
                             June 27, 2002

    Please note: Since Ms. Nancy Hooks was not able to be present at 
the hearing, her testimony was presented by Mr. John Erickson, 
Commissioner, Commission on Affordable Housing and Health Facility 
Needs for Seniors in the 21st Century.

    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 18 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 of 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 on the vigorous effort that 
has been undertaken to meet them. I would 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. And 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 we 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, nonprofits, 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, nonprofits 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 percent of Americans own their own home, 
and that figure is over 80 percent among those aged 50 and above. 
Further, of those aged 50+ homeowners, 58 percent 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 the 
Home- and Community-Based Services (HCBS).
---------------------------------------------------------------------------
    \1\ United States Census, Housing Vacancy Survey, First Quarter, 
April 2002, Graph of Homeownership Rates.
---------------------------------------------------------------------------
    The senior population is expected to grow dramatically over the 
next 30 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 9 short years, the first wave of this 
generation will reach age 65, and begin to test our Nation's senior 
resources.
---------------------------------------------------------------------------
    \2\ Older Americans 2000: Key Indicators of Well-Being, Federal 
Agency Forum on Aging- 
Related Statistics (August 2000): Indicator I.      http://
www.agingstats.gov/chartbook2000/ 
population.html
---------------------------------------------------------------------------
    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 some 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.
---------------------------------------------------------------------------
    \3\ One hundred percent SSI is approximately 74 percent FPL; both 
are national standards, with minor exceptions.
    \4\ Robert Mollica, Personal Care Services: A Comparison of Four 
States, AARP (March 2001).
---------------------------------------------------------------------------
    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 the very 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 percent of all Federal revenues by the year 2030.\5\ 
Already, in 2001, State Medicaid programs paid about 62 percent 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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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 nonmedical types of care.\10\
---------------------------------------------------------------------------
    \8\ Valerie Lewis, Medicaid Waivers: California's Use of a Federal 
Option, Medi-Cal Policy Institute (March 2000): 5-6. http://
admin.chcf.org/documents/mcpi/medicaidwaivers.pdf
    \9\ Enid Kassner, Loretta Williams, ``Taking Care of Their Own: 
State-Funded Home- and Community-Based Care Programs for Older Persons, 
AARP (1997). http://research.aarp.org/health/9704Xfunded.html
    \10\ Robert Mollica, Enid Kassner, Personal Care Services: A 
Comparison of Four States, AARP (2001), 1-2. http://research.aarp.org/
health/2001X04Xcare.pdf
---------------------------------------------------------------------------
    Commission research projects that, in 2020, 4.2 million seniors 
will need personal care, including 2.4 million seniors with incomes 
under 250 percent of the poverty level. Another 3.2 million will 
require skilled home care with 2.3 million under 250 percent 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.
---------------------------------------------------------------------------
    \11\ Mollica, 4.
---------------------------------------------------------------------------
    The Commission recommends that Congress encourage the 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.




    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.




    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.




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




    What is clear is that shortages do 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:

f Preservation, modernization, and retrofitting of existing affordable 
    senior housing.
f Expansion of all types of assisted housing in order to meet market 
    demand.
f Expansion of the role of Government Sponsored Enterprises in 
    supporting senior housing needs.
f 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.
f 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 very closely and to explore their implications and 
impacts.
    Will Rogers once said, ``Even if you are on the right track, you 
are 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.
