To provide assisted living assistance through Medicaid and low-income housing tax credit.

Summary of H.R. 8662 (119th Congress) – “To provide assisted living assistance through Medicaid and low-income housing tax credit”

Purpose and intent

• The bill aims to expand access to assisted living services for low-income individuals by integrating assisted living options into Medicaid coverage and by prioritizing funding for projects that reduce long-term care costs through non-institutional settings.
• It seeks to support state efforts to cover assisted living services under Medicaid and to incentivize the development of affordable housing with integrated elderly care options through the Low-Income Housing Tax Credit (LIHTC).

Key provisions

1) Coverage of assisted living services under Medicaid

• Amends Section 1905(a) of the Social Security Act to add a new category:
  • New paragraph (32) authorizes services provided in an assisted living residence, as long as they align with state law and are consistent with the state’s income and resources rules under section 1902(a)(10)(A)(i)(V).
  • Criteria include that:
  • The individual would require the level of care provided in a hospital or nursing facility.
  • The cost to Medicaid for all services for individuals in assisted living would be no greater, on an annual per-capita basis, than the cost if those individuals received hospital or nursing facility services.
• This establishes assisted living services as part of Medicaid, under certain cost-equivalence conditions and state-law constraints.

2) Mandatory Medicaid benefit

• The amended law makes the new assisted living services a mandatory Medicaid benefit (adds paragraph (32) to the mandatory services list in 1902(a)(10)(A)).

3) Effective date and state implementation

• General effective date: January 1, 2027.
• Temporary delay option for states needing legislation:
  • If a state plan requires state legislative action (other than funding) to meet the new requirements, the state can delay compliance without being in violation until the first calendar quarter after the end of the first regular session of the state legislature following the 1-year period after enactment.
  • For states with longer (e.g., two-year) legislative sessions, each year of the session counts as a separate regular session.

4) LIHTC project selection criteria

• Amends Section 42(m)(1)(C) of the Internal Revenue Code to add a new criterion for LIHTC project scoring:
  • New clause (xi) prioritizes projects that reduce the medical assistance costs of long-term services and supports for the elderly by providing such services in a non-institutional setting (i.e., typically, assisted living or similar community-based settings).
• Effective date for this LIHTC criterion: allocations made after January 1, 2027.

Who/what is affected

• Medicaid program (federal participation in states) and individuals who would need long-term care services but could be served in assisted living facilities.
• States, which must administer Medicaid expansions to cover assisted living services consistent with their plans, income/resources rules, and state laws.
• Low-Income Housing Tax Credit (LIHTC) programs and developers, which would be incentivized to prioritize projects that facilitate non-institutional assisted living for the elderly.
• Health care and aging services providers, especially those operating or planning assisted living residences that coordinate with Medicaid.

Procedural and timeline aspects

• Introduces a new mandatory Medicaid benefit effective January 1, 2027, with potential state delays if legislative action is required.
• Applies new LIHTC selection criteria to allocations after January 1, 2027.
• Bill introduced May 4, 2026; referred to Ways and Means and Energy and Commerce.

Practical implications

• Potentially broader access to assisted living for low-income seniors, reducing hospital or nursing facility utilization by offering non-institutional care options covered by Medicaid.
• Increased federal/state alignment to support community-based living arrangements for elderly populations.
• Incentives for developers to build LIHTC projects that enable affordable, non-institutional elderly care.