5) Description of housing product/service offering: When seniors can no longer live at home alone they seek housing in senior housing communities offering a range of supportive services. These communities are mostly rental in nature. Medicaid helps the poorest seniors. The vast middle-class is often left unassisted, with too much personal income to qualify for Medicaid yet not enough to afford to pay for senior housing they desperately need. Frequently the adult children want to help but their options have not been easy or tailored. The average cost of a stay in an “Assisted Living” community is $36,000 annually, or more than $12,000 above the average seniors’ annual income. The seniors’ adult children are often left to fund the gap because most seniors do not have enough capital available to fund this shortfall - a significant financial barrier rendering such housing unaffordable for over 3.1 million seniors. As a solution ElderLife created the family elder care loan (the “Family Payment Plan”) - a tailored consumer loan designed to help primarily the adult children of a senior family member in need of assisted living or other specialized housing and care. Until ElderLife, no tailored consumer finance program existed to address the needs of these families in what is today a $66 billion market in the US. ElderLife works with the adult children/guardians of the senior, the senior themselves, and the admissions staff of the senior housing facility to: (1) help the adult children ascertain their seniors’ financial needs, (2) project the length of the care need, (3) fashion a payment plan the adult children can afford which also solves the problem. Seniors benefit because they can access needed housing through their family’s help. Adult children of the senior also benefit - frequently middle-aged and at the height of their career they face having to leave their employment, and the diminishing of their own future earnings. By financing care the adult children can stay in their job saving for their retirement.

6) Description of innovation: No one has brought together family participation, consumer finance and senior housing, to fashion a seamless financial solution to a growing need. ElderLife brings the family members of the senior together to finance the seniors’ housing. If as an example, the senior needs housing that costs $3,000 a month but that senior only has $1,800 in retirement income, there is a shortfall of $1,200/mo. for an estimated 24 months, totaling $28,800. Until recently, that senior would struggle as the gap amount would be too large to bear and housing would be “unaffordable”. If the senior had three adult children willing to help, a $1,200/mo. gap which seems large at the outset is now broken down by three children, financing $400 a month each for with a monthly payment of $8 month for every $400 financed. The family can withdraw what is needed monthly, paying interest only on the cumulative amount used. As 24 months pass and the total outstanding amount financed is $28,800, the total family monthly payment is roughly $580. Divided by three children, each pays $193/mo. for up to five years when the loan is paid off. This “Family Payment Plan” aspect brings families together, breaks down the high cost into smaller pieces that can fit into most middle-class families’ budgets, and enables the adult children to continue working, thereby saving for their own retirement while their parents are in a safe housing setting. Secondly, the loan is administered by counselors intimately aware of families’ needs, senior housing staff’s responsibilities’ at time of entry into a facility by a senior and budgeting loan payments during a crisis. ElderLife assists the family and the facility staff to ascertain what to borrow. Families are pleased by this approach because no one “plans” for a parent to move out of their home and into their “new” home - a senior housing community. By empowering multiple family members to come together, collaborating with facility staff, the family is in control.

7) Benefits to clients: Because most families do not plan nor do they recognize they are liable for most of the costs associated with senior housing (thinking Medicaid will pay), and after extensive research, ElderLife concluded the best way to reach the target population is through participating senior housing facilities just as a student loan is offered at the university through a financial aid office. This is executed by a team of caring ElderLife managers called “Huggers™” who maintain relationships with the senior housing facilities’ staff. Building relationships with both elder care providers and family members is critical to the success. Huggers™ focus on generating awareness at the senior housing facilities. ElderLife Counselors are responsible for counseling families on the applicability of an elder care loan, guiding these families through the application process, and servicing the loan once it is approved. The Plan is offered through these facilities when the issue of costs is addressed. That is the point where most families realize they need care that is costly and that “Medicaid” pays for very little. It is important not to take advantage of the senior facing this surprising situation, which is why the Plan is designed to be available primarily to the adult caregivers overseeing the well being of their senior. The facility staff which families rely on heavily during a difficult time period is comprised of caring individuals with a focus of helping seniors obtain proper housing. Facilities are managed by a regional Manager assigned by the housing provider’s main office to oversee the management of facilities. Each Hugger oversees a region of facilities. Huggers collaborate with the provider’s regional managers, build bonds with the staff at each facility, monitor family traffic, train new staff and speak with families about the program. ElderLife takes great care to administer the program with a “higher purpose” philosophy, ensuring that seniors are properly assisted.

8) Key operational partnerships: ElderLife serves as the link between senior housing facilities and financial institutions which provide it with funds to lend to families. Consequently, for the program to work and for families to be able to access its Family Payment Plan as a solution, senior housing providers must offer the Plan and banks must be willing to provide ElderLife with available loan capital to disburse to those in need. On the senior housing side, a growing acceptance of ElderLife’s solution is evidenced by the fact that five of the largest senior housing providers in the nation offer ElderLife’s Family Payment Plan today. These relationships began in late 2003 when ElderLife launched a pilot test of the Family Payment Plan in a select group of communities in each of the above mentioned providers’ portfolio of assisted living communities in Maryland and Virginia. The staff in these facilities who are trained by ElderLife’s Huggers are the ones that bring the Family Payment Plan to the family’s attention. From there, the family calls ElderLife’s Family Service Center where Plan Counselors employed by ElderLife and trained in both consumer finance and senior housing issues, begin the process of guiding families through the issue of paying for their elderly loved ones’ housing needs. ElderLife has identified a number of national lending sources to provide it with lending capital to disseminate to approved families and is working on national line to accommodate a rollout to all 50 states.

9) Financial model: “How does one help low to middle income seniors who do not have enough income or assets to access needed senior housing?” What if the adult children could step in were they provided with a simple solution? When families call ElderLife, its Counselors focus on who can come to the seniors’ aid. This resulted in daughters, sons, in-laws, cousins, grandchildren, even neighbors or church friends lending a hand by co-signing a loan to help the senior move into a housing community providing oversight needed. Most of ElderLife’s seniors have income just above Medicaid thresholds, but are in the $12,000 - $25,000 income group. With senior housing averaging $36,000 a year the gap must be filled. The Family Payment Plan opens doors by bringing families and communities to the seniors’ aid.

          • Costs as percentage of income: 83%

          • Financing: Revenue is earned through interest charged on the loans to the family members. The senior housing facilities also pay ElderLife a fee for the training of their staff in order to ensure accurate program dissemination. Combined these two fees ultimately create a self-sustaining, profitable consumer loan program. It has been self-funded by the founders of the company since 2000. Years 2000 – 2003 were “R&D”, wherein families, seniors, senior housing companies, banks, advocates, government agencies were consulted to help ElderLife fashion a sound family loan program. Years 2004 – 2005 a small equity investment funded a controlled test of the program. ElderLife is presently working on an investment to fund a national rollout which will take two years to complete.

10) Effectiveness

          • Project outcomes: ElderLife has: proven that providers and consumers are willing to pay for the Family Payment Plan; enrolled five of the top 50 national providers; improved occupancy by 3% in several senior housing facilities; and built a history of actual loan data which confirms; (a) the criteria for identifying good loans, and (b) that this program is a desired solution to middle-class families. Over 500 phone calls from inquiring families have been fielded with one in five applying for the program. Over 1,000 senior housing communities would like to offer the program to date.

          • Number of clients in past year: Roughly half of the 500 calls have come to ElderLife over the past twelve months. The information from these calls has enabled ElderLife to refine a sound, predictable process of helping a family finance their senior loved ones’ housing.

          • Percentage of clients that are poor or marginalized: 65%

          • Potential demand: Of the roughly 38 million seniors today, roughly 4 million seniors are in some senior housing setting today. Another 3.1 million seniors qualify as a “gap income group” set of seniors with a potential need for senior housing and care services, but are not financially able to pay for the entire cost. Over 24 million adults serve as a caregiver to an elderly person according to a MetLife study. ElderLife is working hard and carefully, as there is an entirely new sector of consumer loans being created with its “family elder care loan”/”Family Payment Plan” and market disciplined has to be maintained for the target population to be serviced fairly as opposed to being taken advantage of. If all 3.1 million seniors who qualify as “gap income group” potential users were able to use a loan, at an average loan of $14,000, a $43 billion dollar new consumer loan market could be created.

11) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: Roughly 80% of the senior population resides in 22 of the 50 states. Initially ElderLife is focusing on enrolling senior housing facilities in these areas. ElderLife’s Huggers will be deployed strategically to service the variety of senior housing communities housing the elderly in their regions. Within two years ElderLife aims to be assisting 1,500 seniors, and within five years, assisting 16,000 seniors and their family caregivers in all 22 states per year in their quest for quality senior housing options.

12) Origin of the initiative: The Founder Elias P. Papasavvas is a Greek refugee from north Cyprus. His parents immigrated to the US with nothing but the determination to obtain a college education for their children. They succeeded and the Founder in looking forward at his future focused on caring for his parents. In his research for seniors he found few financial options and worried his parents would face difficulties as they aged. They were not poor or rich. Yet they had their children. Having worked in real estate, he noticed senior housing projects focused on the wealthy. He left in 1998 to build “affordable” senior housing facilities that could charge what middle-income seniors could afford. That proving difficult he moved to “If we can’t cut the cost of senior housing can we help seniors finance that part they can’t pay on their own?" and the Family Payment Plan was born.

Contact Information:
Elias  Papasavvas
Founder & CEO
ElderLife Financial LLC
(Business)
1101 Pennsylvania Avenue NW, Suite 700 Washington DC 20004
United States
Tel: 202-756-2992
Fax: 202-756-0243
Email: eliasp@elderlifefinancial.com
Website: www.elderlifefinancial.com