No more federal aid -- but money-saving housing for elderly survives

With federal budget-cutting scissors snipping away at everything in sight, it may not seem unusual that a federal demonstration project for elderly housing has been clipped.

What may be unusual, however, is that several states have picked up the pieces, initiating similar plans of their own. And at least one private sector sponsor is willing to continue the project without federal help.

The three-year-old program, entitled "congregate housing services," was designed to hold down the cost of nursing home care by helping older citizens remain in their homes.

By providing the elderly with meals, transportation, housing, and other services, in public and private dwellings other than single- family homes, federal lawmakers felt they could delay or prevent unneccessary institutionalization.

The cost of the program was to be recouped through savings in federal medicaid payments and nursing home costs. Supporters of the plan projected that federal and state nursing and medicaid payments could be cut by millions of dollars. As an example, they compared the annual $2,000 to $4,000 per individial cost of the congregate program vs. the $16,000 price tag for annual individual nursing home care.

Even though cost-effectiveness was one of its major selling points, the project was balked at by the Carter and Reagan administrations, both feeling it duplicated services already provided by the Department of Health and Human Services.

Despite administration opposition, Congress appropriated two one-year grants totaling $20 million for the program's 55 sites for 1979 and 1980. But another for administering the project was stricken from the jurisdiction of the Department of Housing and Urban Development after 1982.

Although federal funding appears to have dried up, many states are pursuing "congregate" housing plans of their own. State projects range from one meal a day served in a common location, to full-fledged housing projects with comprehensive services. So far, at least four states -- Massachusetts, Maryland , Vermont, and New York -- operate a congregate program similar to the federal program. Other states, such as Michigan and Ohio, operate a congregate meal service only. Said one federal official, "A lot of congregate projects are now in the works. The states are finally getting into the act."

In addition, at least one federally funded site has indicated a willingness to continue the project without further funding.

"We're not prepared to let our program die, even if the grant does," says Norman Crook, executive director of the federal congregate project located in Haverhill, Mass. "We might make it pay for itself," he adds, although admitting he does not yet know how that could be done.

The 200-resident Haverhill housing project, run by an ecumenical group called Bethany Homes, was one of the first sites to receive federal money in 1979 -- $ 298,000 for three years. Its remaining expenses are picked up by the administering group and residents, who pay a portion of their income.

Located in an old mill town on the banks of the Merrimack River, the project currently maintains a 44-person limit on its congregate services. Of those 44 slots, only 23 are currently filled. The other 177 residents do not yet feel a need for the meals and other services.

Each apartment is complete with its own kitchen and bath, although a common dining hall is available. Residents may elect to "go on congregate," entitling them to special services, whenever they feel the need.

Martha Crook, project co-ordinator, calls the congregate services "kind of a last resort." But she estimates that "at least half" of the people now in the program would already be in a nursing home without the benefit of the program.

Complained one resident at another congregate facility, "The only reason I'm living here is because it's cheap." But his companion added, "It could be worse, we co uld be living in a nursing home."