Today's Challenges and Why Your Voice in Washington is Critical by Argentum

2021 Public Policy Institute: Welcome Senior Living Advocates!

Today’s Program 12:30 – 1:30 p.m. 1:30 – 2:15 p.m.

2:15 – 2:30 p.m. 2:30 – 3:15 p.m. 3:15 – 4:00 p.m. 4:00 – 4:45 p.m. 4:45 p.m.

Today’s Challenges and Why Your Voice in Washington is Critical When are COVID-19 Resources and Relief Coming to Senior Living Communities? Break Update from the U.S. Senate Special Committee on Aging Breakthroughs in Vaccines & Therapies for the Senior Living Community Advocacy 101 and Hill Strategy Session Adjourn for the day 2

About Us ABOUT US Pat Mulloy Chairman, Argentum Board of Directors & Managing Member, Commodore Capital, LLC

James Balda President and CEO Argentum

Paul Williams

Maggie Elehwany

VP of Government Relations Argentum

Senior VP of Public Affairs Argentum

Today’s Challenges and Why your Voice in Washington is Critical

A pandemic and national political shift: What is the federal impact to Senior Living Communities

Welcome to Washington, D.C…sort of.

Our goal…

Educate

Advocate

Activate

together.

Political Sea Change  Challenges of the senior living industry remain more daunting than ever in the history of the industry.  The pandemic continues, stretching the limitations of workforce and financial resources.  Significant vaccination challenges persist and prioritization for vulnerable residents is in jeopardy.  Current federal relief remains woefully inadequate.  A Democratic Administration and Congress could bring new scrutiny, legislation, and regulation. 10

Congress

Senate

Democrats have the narrowest of majority. 50-50 tie is broken due to the ability of Vice President Kamala Harris to also serve as President of the Senate and become the tie-breaking vote.

Will the parties be able to unite?

The power and limitations of the majority Democrats will control the agenda:  The majority party in the Senate wields power, but with limitations. Democrats determine agenda.  Majority Leader Schumer (D.-N.Y.) has great control over what legislation is prioritized. Slim majority maneuvers:  Major legislation will need 60 votes are needed to override a Senate filibuster). However, a procedure known as “reconciliation” can be used. A simple majority vote will be all that is needed. Numbers matter:  Absences and vacancies could play a critical factor due to the slim majority margin. 14 14

Key Congressional Players Senate Leadership:  Majority Leader - Senator Chuck Schumer (D-NY)  Whip - Senator Dick Durbin (D-IL)  Assistant Leader - Senator Patty Murray (D-WA) Key Chairmanships:  Senate Finance Committee – Ron Wyden (D-OR)  Senate Health, Education, Labor and Pension Committee Patty Murray (D-WA)  Senate Aging Committee – Bob Casey (D-PA)  Senate Appropriations – expected Chair, Patrick Leahy (D-VT) House Key Committees: Ways and Means Committee, Energy and Commerce Committee, and Appropriations Committee. 15

Anticipated legislation impacting senior living Another COVID Relief Bill. Oversight Legislation: Due to high percentage of COVID-19 deaths in long-term care settings and with Democrats in control of the House and Senate, expect additional federal scrutiny, and more bills like those introduced in 2020: o Assisted Living Facility Coronavirus Reporting Act - Requires states to meet assisted living facility reporting requirements to qualify for future COVID–19 response funds (S. 4184 - Sen. Elizabeth Warren +1 co-sponsor / H.R. 7463 Rep. Carolyn Maloney +60 co-sponsors) o Nursing Home Pandemic Protection Act - Establishes requirements for skilled nursing facilities and assisted living facilities to manage the outbreak of COVID-19 (S. 4846 - Sen. Cory Booker / H.R. 7048 - Rep. Josh Gottheimer +6 co-sponsors) o Nursing Facility Quality Reporting Act of 2020 - Requires long term care facilities to report certain information relating to COVID-19 cases and deaths (H.R. 6849 - Rep. Steven Horsford +6 co-sponsors) 16

Potential Congressional action impacting senior living Oversight Hearings and Investigations: Expect both Congressional investigations and Presidential Commissions tasked with identifying challenges related to COVID-19 and infectious diseases in long-term care settings. Taxes and Long-Term Care: Possible bipartisan support for long-term care tax relief offering tax credits for informal caregivers and tax benefits for long-term care insurance. Long-Term Care/Health Care: Efforts to expand Medicaid to include payments for long-term care needs is a possibility. Union and Labor: Anticipate legislative priorities such as paid sick leave, caregiver leave, minimum wage increases and pay equity legislation. Much of the labor agenda will likely also be in the form of regulatory changes put forward by the Biden administration. Reporting Requirements for Senior Living Communities

What is not expected  Federal liability or tort reform related to COVID19.  Federal advocacy efforts must continue, but state reform efforts are now more important than ever.  Argentum state advocacy efforts. 18

The Executive Branch

Healthcare priorities Support, Expand & Enhance ACA

Part D, 340b & MA Star Ratings Reforms

BIDEN ADMINISTRATION

Tie Medicaid auto-enroll to other service features

Public Option

Social Determinants of Health

Incent 12 states yet to expand Medicaid

Medicare Early Buy-in

President Biden COVID-19 agenda  COVID-19 Response Task Force  COVID Response Office within White House  First 100 days challenge – ‘Wear a mask for 100 days’  Federal order on masks in federal spaces/buildings  100 million doses administered in first 100 days  Rejoin the World Health Organization  Reconstitute WH Pandemic Response Unit  Call on Congress to pass additional COVID relief.

Biden regulatory agenda Overall:  Heavy focus on rolling back Trump-era deregulation.  Expect an emphasis on reinstating ACA regs eliminated under the Trump administration.  Also expect heavy regulation on the labor and health care sector. Senior Living Regulatory Efforts:  Expect proposed regulations and reporting requirements on infection prevention and control, staffing, emergency preparedness, employee safety and patient/resident socialization (to name a few). 22

But, expect the unexpected  Like past administrations, unforeseen and uncontrollable external events will dictate President Biden’s timing, focus and resources.

Our COVID-19 care challenges will remain and may worsen  Resident care and safety needs in the COVID-19 pandemic  Staff challenges and safety needs in the COVID-19 pandemic  Financial Challenges of Senior Living Providers  Caring for more seniors than nursing homes and hospitals combined yet have only received a fraction of Provider Relief Funds.  Approaching point of nonsustainability. 24

Why we need you…

Urgency of Now: COVID-19 Relief Legislation  Initial Bill: Bipartisan proposal including incremental PRF; possible long-term care targeted funding.  Republicans met with Biden  60 votes needed in Senate

Biden Proposal Overtakes Efforts  Biden plan ($1.9 trillion - - heavy on education and labor issues)  Overtakes bipartisan discussions and previous COVID relief plans/Reconciliation strategy is adopted, which requires a simple majority.  Provider Relief Fund dollars are not included 27

Does the House Bill Help Keep Assisted Living Facilities Open?  Unfortunately, no.  Assisted Living Facilities are not mentioned once in the current House COVID-19 Relief Package.  Only Long-term-care providers are only mentioned

Seniors and Caregivers Continue to be Overlooked in COVID-19 Relief Negotiations More than half of assisted living providers anticipate closures if relief is not provided.

(February 12, 2021) – Now a year into the COVID-19 pandemic, thousands of assisted living facilities are still waiting for federal COVID-19 relief, and for over half of them, closures are imminent, according to a recent Argentum member survey. They have faced over $15 billion in increased expenses and lost revenue, and these figures are increasing substantially each month. Meanwhile, provisions in the current COVID-19 relief package negotiated in the House of Representatives fall woefully short in protecting these seniors and caregivers. “We are extremely disappointed that ongoing negotiations on the latest COVID19 relief package continue to leave behind these vulnerable seniors and those who care for them,” said James Balda, president and CEO of Argentum. “The bill’s language does not come close to adequately addressing the urgent needs for those most at risk to COVID-19: residents of long-term care. These care providers cannot wait any longer—the situation is dire.” It is with certainty that older adults are extremely vulnerable to COVID-19, and for a year, assisted living providers have been taking on high costs of PPE; providing for added staffing needs and offering hero pay; procuring tests; and seeing sharp declines in occupancy rates due to COVID-19 restrictions, all without the federal relief needed. 29

Taking our message to Capitol Hill The Power of You

Tell them what type of care you provide  Regulated in all 50 states with oversight by a state regulatory agency.  Assisted Living offers direct and personalized care in a residential setting. (Residents require a higher level of care and support; determined through a health assessment according to state regulations.) 24/7 care.  Memory care facilities offer innovative cogitative therapies, staff training, and monitoring tailored to meet the specific needs of people with Alzheimer’s and other forms of dementia. 31

Who we care for… COVID targets this population

75-84 years old are 220x more likely to die 85 years or older are 630x more likely to die

CDC National Center for Health Statistics, 2016 National Study of Long-Term Care Providers 32

Detrimental Losses due to Challenges of COVID-19 Personal Protective Equipment and Staff Costs  PPE and other infection prevention and control resources for residents and staff (gowns, gloves, face masks, face shields, goggles, respirators, cleaning supplies) continue.  Many report exorbitant increases in PPE expenditures, as high as a 2,000% increase for gowns and 1,500% increase for masks.  Additional staff needed for testing, monitoring, implementing enhanced infection control and cleaning protocols, as well as “hero” pay. Lost Revenue  Losses are due to drastic reductions in resident move-ins and admissions. Some report 75% declines in admission compared to the same period in 2019; occupancy fell to a record low in the second quarter of 2020.  These losses are long-term, compounding, and unsustainable. 33

TOTAL LOSSES are $15 billion 33

Extreme Losses are Unsustainable

*Percentage of assisted living providers with increased expenses as a result of COVID-19 34

PROVIDER RELIEF woefully slow and insufficient-- thousands still have not received relief funding Hospital, Nursing Homes and Others ($145 Billion) Assisted Living Facilities ($3 Billion allocated - - but only $1 billion received) Unallocated ($27 Billion)

The Provider Relief Failures Taylor Mill Oaks Assisted Living Elba, Alabama  Mr. Calhoun owns two small assisted living communities in rural Alabama.  He has not received Phase II or any payments for his two communities.  He has also not received any notification from Optum or HHS despite weekly or more frequent inquiries.  Mr. Calhoun’s financial situation is desperate. If he does not receive Provider Relief Funding, he will likely be forced to close one or both of his communities. 36

Relief funding is limited and overdue

Closures Looming 56% of Assisted Living Providers anticipate closures within the next year, potentially forcing seniors from their homes and caregivers OVER HALF of Assisted Living Providers are currently operating at a loss Internal member surveys conducted by Argentum and the National Center for Assisted Living (2020-2021) 38

Safeguard Safety Net Programs  Senior living is largely private-pay and many nursing homes receive government funding or support.  30,000+ communities in the United States with more than 1.3 million residents calling assisted living or memory care/Alzheimer’s care home  Annual costs are less than half the cost the national average of nursing home costs

Senior Living Communities Safeguard Safety Net Programs  85% of Residents in Senior Living Pay for Their own Care (10% Medicaid, 3%-5% LTC Insurance and Other Private Sources)  Average Length of Stay in Assisted Living: 24-27 months  Average Age of Resident in Assisted Living: 87  Senior Living Communities provide less restrictive, more affordable settings than nursing homes and save American taxpayers $billions of dollars in Medicaid long term care costs 40

Immediate resources are needed

$15 billion in losses State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri

Economic Impact

Financial Losses

State

1,000,000,000 444,500,000 4,700,000,000 63,800,000 26,500,000,000 3,600,000,000 2,600,000,000 638,200,000 14,500,000,000 5,000,000,000 447,300,000 1,300,000,000 5,900,000,000 3,200,000,000 821,200,000 157,900,000 1,200,000,000 2,700,000,000 1,300,000,000 3,600,000,000 6,000,000,000 7,700,000,000 4,200,000,000 702,600,000 2,100,000,000

‐$31,613,376 ‐$274,447,751 ‐$450,547,895 ‐$176,317,164 ‐$1,931,725,797 ‐$237,448,280 ‐$150,801,563 ‐$46,371,337 ‐$1,004,291,185 ‐$541,311,322 ‐$15,056,818 ‐$98,034,807 ‐$676,745,692 ‐$375,841,517 ‐$191,974,121 ‐$165,200,046 ‐$215,732,952 ‐$239,394,185 ‐$23,527,869 ‐$212,551,609 ‐$302,346,934 ‐$367,653,561 ‐$278,023,730 ‐$165,287,945 ‐$276,748,889

Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 42

Economic Impact

Financial Losses

1,100,000,000 1,000,000,000 1,100,000,000 555,700,000 3,500,000,000 715,000,000 10,000,000,000 7,500,000,000 541,900,000 4,800,000,000 612,400,000 7,200,000,000 6,200,000,000 742,600,000 1,900,000,000 656,600,000 2,400,000,000 8,800,000,000 1,800,000,000 428,600,000 5,100,000,000 7,400,000,000 410,100,000 8,600,000,000 204,300,000

‐$56,336,673 ‐$114,933,869 ‐$166,675,539 ‐$38,953,256 ‐$412,994,356 ‐$104,096,209 ‐$843,294,536 ‐$448,285,553 ‐$59,079,126 ‐$535,709,420 ‐$235,336,276 ‐$85,342,779 ‐$499,755,039 ‐$68,957,775 ‐$261,375,029 ‐$65,345,424 ‐$434,999,448 ‐$1,400,901,144 ‐$207,590,461 ‐$6,985,253 ‐$301,834,694 ‐$186,594,088 ‐$356,191,515 ‐$71,872,389 ‐$31,176,911

Devasting Losses Are Not Sustainable  Nearly 56% of communities anticipate closures.  Potentially displacing caregivers and residents.

Urgent Request: Don’t leave seniors and their caregivers behind 1.

Provide Targeted Relief to Assisted Living. Support language to direct the HHS Sec. to target $5 billion in PRF to Assisted Living providers. Allow Assisted Living providers access to the billions of dollars in testing, PPE, vaccines and therapeutics in the Act.

“We haven't received the [relief] funds yet, but when they arrive, (fingers crossed), it will be an absolute game-changer for us. We could not continue through this winter without it. Our concern now is that we're entering a period of two years of pandemic suppression. We're going to need more support.” - Assisted Living Community Executive Director 44

Taking our Message to the Hill A. Advocate for targeted funding of $5 billion for Assisted Living. B. Advocate for the inclusion of Assisted Living providers in key sections of American Recovery Act: 1) Sec. 3001-3004 - Vaccines and Therapeutics 2) Sec. 3011 – 3014 – Testing 3) Sec. 3031-3034 – Public Health Investment

Join the fight!