Shared occupancy.

If you try this path to affordability, proceed with caution

ASSISTED LIVING SPONSORS AND OPERATORS HAVE GENERALLY done a good job of serving seniors with after-tax incomes of $35,000 or more. But few have managed to deliver truly affordable assisted living (without spend-down) for those with incomes below $35,000. One way to do so may be to offer shared rooms.

Only about 25 percent of today's 80-plus seniors can afford to pay for assisted living at its current average monthly rate of $2,500 without spending down their savings or receiving help from their children or from sponsor subsidies. A great many of the other 75 percent--about 4.5 million people--have no savings or affluent children to fall back on, and simply can't afford that monthly rate.

Medicaid waivers and other government subsidy programs could help subsidize assisted living for moderate- and low-income residents, but the near-term expansion of such programs appears unlikely. What's more, many industry professionals do not favor third-party payor programs because they fear that regulations are sure to follow--and that rates may be too low to pay for both good care and profits.

The other …