MEDICAID-SUPPORTIVE LIVING

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3555

Introduced 2/5/2026, by Sen. David Koehler

SYNOPSIS AS INTRODUCED:

305 ILCS 5/5-5.01a

Amends the Medical Assistance Article of the Illinois Public Aid
Code. In provisions concerning the supportive living facilities program,
provides that sites for the operation of the program shall be selected by
the Department of Healthcare and Family Services based upon criteria that
may include the need for services in a geographic area, the availability of
funding, the site's ability to meet the standards, and a need to increase
access for Medicaid enrollees who need an alternative to nursing home
care. Requires the Department to determine need utilizing the most
recently available statewide report every 3 years, and to also consider
the occupancy rates, vacancies, and waiting lists in surrounding
operational supportive living program sites, and public comments. Provides
that based on need, the Department shall make the final determination to
establish geographic areas utilizing county or zip code-based geographic
areas within a rate setting region as the basis for opening a competitive
application process. Contains provisions on the analysis and other
information required in the statewide report; primary market areas for
supportive living program sites; and other matters. Effective immediately.
LRB104 18552 KTG 31995 b

A BILL FOR

SB3555
LRB104 18552 KTG 31995 b
1

AN ACT concerning public aid.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Public Aid Code is amended by
5
changing Section 5-5.01a as follows:

6

(305 ILCS 5/5-5.01a)
7

Sec. 5-5.01a.
Supportive living facilities program.
8

(a) The Department shall establish and provide oversight
9
for a program of supportive living facilities that seek to
10
promote resident independence, dignity, respect, and
11
well-being in the most cost-effective manner.
12

A supportive living facility is (i) a free-standing
13
facility or (ii) a distinct physical and operational entity
14
within a mixed-use building that meets the criteria
15
established in subsection (d). A supportive living facility
16
integrates housing with health, personal care, and supportive
17
services and is a designated setting that offers residents
18
their own separate, private, and distinct living units.
19

Sites for the operation of the program shall be selected
20
by the Department based upon criteria that may include the
21
need for services in a geographic area, the availability of
22
funding, and the site's ability to meet the standards.

23

(b) Beginning July 1, 2014, subject to federal approval,

SB3555
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LRB104 18552 KTG 31995 b
1
the Medicaid rates for supportive living facilities shall be
2
equal to the supportive living facility Medicaid rate
3
effective on June 30, 2014 increased by 8.85%. Once the
4
assessment imposed at Article V-G of this Code is determined
5
to be a permissible tax under Title XIX of the Social Security
6
Act, the Department shall increase the Medicaid rates for
7
supportive living facilities effective on July 1, 2014 by
8
9.09%. The Department shall apply this increase retroactively
9
to coincide with the imposition of the assessment in Article
10
V-G of this Code in accordance with the approval for federal
11
financial participation by the Centers for Medicare and
12
Medicaid Services.
13

The Medicaid rates for supportive living facilities
14
effective on July 1, 2017 must be equal to the rates in effect
15
for supportive living facilities on June 30, 2017 increased by
16
2.8%.
17

The Medicaid rates for supportive living facilities
18
effective on July 1, 2018 must be equal to the rates in effect
19
for supportive living facilities on June 30, 2018.
20

Subject to federal approval, the Medicaid rates for
21
supportive living services on and after July 1, 2019 must be at
22
least 54.3% of the average total nursing facility services per
23
diem for the geographic areas defined by the Department while
24
maintaining the rate differential for dementia care and must
25
be updated whenever the total nursing facility service per
26
diems are updated. Beginning July 1, 2022, upon the

SB3555
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LRB104 18552 KTG 31995 b
1
implementation of the Patient Driven Payment Model, Medicaid
2
rates for supportive living services must be at least 54.3% of
3
the average total nursing services per diem rate for the
4
geographic areas. For purposes of this provision, the average
5
total nursing services per diem rate shall include all add-ons
6
for nursing facilities for the geographic area provided for in
7
Section 5-5.2. The rate differential for dementia care must be
8
maintained in these rates and the rates shall be updated
9
whenever nursing facility per diem rates are updated.
10

Subject to federal approval, beginning January 1, 2024,
11
the dementia care rate for supportive living services must be
12
no less than the non-dementia care supportive living services
13
rate multiplied by 1.5.
14

(b-5) Subject to federal approval, beginning January 1,
15
2025, Medicaid rates for supportive living services must be at
16
least 54.75% of the average total nursing facility per diem
17
rate for the geographic areas defined by the Department and
18
shall include all add-ons for nursing facilities for the
19
geographic area provided for in Section 5-5.2.
20

(c) The Department may adopt rules to implement this
21
Section. Rules that establish or modify the services,
22
standards, and conditions for participation in the program
23
shall be adopted by the Department in consultation with the
24
Department on Aging, the Department of Rehabilitation
25
Services, and the Department of Mental Health and
26
Developmental Disabilities (or their successor agencies).

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LRB104 18552 KTG 31995 b
1

(d) Subject to federal approval by the Centers for
2
Medicare and Medicaid Services, the Department shall accept
3
for consideration of certification under the program any
4
application for a site or building where distinct parts of the
5
site or building are designated for purposes other than the
6
provision of supportive living services, but only if:
7

(1) those distinct parts of the site or building are
8

not designated for the purpose of providing assisted
9

living services as required under the Assisted Living and
10

Shared Housing Act;
11

(2) those distinct parts of the site or building are
12

completely separate from the part of the building used for
13

the provision of supportive living program services,
14

including separate entrances;
15

(3) those distinct parts of the site or building do
16

not share any common spaces with the part of the building
17

used for the provision of supportive living program
18

services; and
19

(4) those distinct parts of the site or building do
20

not share staffing with the part of the building used for
21

the provision of supportive living program services.
22

(e) Facilities or distinct parts of facilities which are
23
selected as supportive living facilities and are in good
24
standing with the Department's rules are exempt from the
25
provisions of the Nursing Home Care Act and the Illinois
26
Health Facilities Planning Act.

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LRB104 18552 KTG 31995 b
1

(f) Section 9817 of the American Rescue Plan Act of 2021
2
(Public Law 117-2) authorizes a 10% enhanced federal medical
3
assistance percentage for supportive living services for a
4
12-month period from April 1, 2021 through March 31, 2022.
5
Subject to federal approval, including the approval of any
6
necessary waiver amendments or other federally required
7
documents or assurances, for a 12-month period the Department
8
must pay a supplemental $26 per diem rate to all supportive
9
living facilities with the additional federal financial
10
participation funds that result from the enhanced federal
11
medical assistance percentage from April 1, 2021 through March
12
31, 2022. The Department may issue parameters around how the
13
supplemental payment should be spent, including quality
14
improvement activities. The Department may alter the form,
15
methods, or timeframes concerning the supplemental per diem
16
rate to comply with any subsequent changes to federal law,
17
changes made by guidance issued by the federal Centers for
18
Medicare and Medicaid Services, or other changes necessary to
19
receive the enhanced federal medical assistance percentage.
20

(g)
Sites for the operation of the program shall be
21
selected by the Department based upon criteria that may
22
include the need for services in a geographic area, the
23
availability of funding, the site's ability to meet the
24
standards, and a need to increase access for Medicaid
25
enrollees who need an alternative to nursing home care.

26

(1) As used in this subsection, "need" means a

SB3555
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LRB104 18552 KTG 31995 b
1

demonstrated deficiency of supportive living program
2

operational sites, including dementia care support units,
3

within a specific geographic area allowing a
4

Medicaid-eligible population 65 years of age and older to
5

have an alternative to nursing facility care. The
6

Department shall determine need utilizing the most
7

recently available statewide report, described in
8

paragraph (2), to be conducted every 3 years by the
9

Department, and shall also take into consideration the
10

occupancy rates, vacancies, and waiting lists in
11

surrounding operational supportive living program sites,
12

and public comments. In the 90-day period following
13

publication of the statewide market study report,
14

stakeholders must have the opportunity to provide public
15

comment to the Department regarding the selection of
16

target geographic areas and other points for consideration
17

for both traditional conventional supportive living
18

operational sites as well as dementia care support sites.
19

Based on need, the Department shall make the final
20

determination to establish geographic areas utilizing
21

county or zip code-based geographic areas within a rate
22

setting region as the basis for opening a competitive
23

application process. All sites selected in each
24

competitive application year must have begun to meet
25

initial milestones established by the Department before
26

the next statewide market study report is published. No

SB3555
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LRB104 18552 KTG 31995 b
1

additional rounds of sites for operation shall be
2

established without a statewide market study report
3

published by the Department. The Department must propose
4

rules implementing this Section no later than 180 days
5

after the effective date of this amendatory Act of the
6

104th General Assembly.
7

(2) Beginning January 1, 2027, and every 3 years
8

thereafter, the Department must publish on its website a
9

statewide market study report which must be utilized by
10

the Department in determining when to solicit applications
11

for supportive living program sites in certain geographic
12

areas in accordance with this subsection. The statewide
13

market study report shall set forth the following:
14

(A) The statewide market study report must define
15

a primary market area as a county, zip code, or
16

multiple contiguous zip codes. A primary market area
17

must not exceed a radius of:
18

(i) 4 miles in Cook County (including the City
19

of Chicago);
20

(ii) 12 miles in Alexander, Bond, Boone,
21

Calhoun, Champaign, Clinton, DeKalb, DuPage,
22

Fulton, Grundy, Henry, Jackson, Jersey, Johnson,
23

Kane, Kankakee, Kendall, Lake, Macon, Macoupin,
24

Madison, Marshall, McHenry, McLean, Menard,
25

Mercer, Monroe, Peoria, Piatt, Rock Island,
26

Sangamon, Stark, St. Clair, Tazewell, Vermilion,

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LRB104 18552 KTG 31995 b
1

Will, Williamson, Winnebago, Woodford, or counties
2

with a population which exceeds 30,000; or
3

(iii) 25 miles in all other counties.
4

(B) The statewide market study report shall
5

identify the eligible population by analyzing age,
6

income, and acuity.
7

(i) Required age cohorts are: 65 years old
8

through 74 years old, 75 years old through 84
9

years old, and 85 years old and older.
10

(ii) Acuity as determined by using the
11

self-care difficulty rate published by Association
12

of University Centers on Disabilities' National
13

Center on Disability in Public Health, or the
14

prevalence of Alzheimer's and related dementia in
15

individuals 65 and older published by the current
16

Illinois Alzheimer's Disease State Plan.
17

(iii) Annual income qualification of $35,000
18

or less. The income limit must be updated for
19

changes in the federal poverty level used for
20

Medicaid eligibility determination and asset
21

levels. When updating, the sum of income and
22

assets must be rounded up to the nearest $5,000.
23

For example, for 2025 a one-person Aid to the
24

Aged, Blind, or Disabled income level of $1,304
25

per month annualized to $15,648 plus the $17,500
26

asset level equals $33,148, which is rounded up to

SB3555
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LRB104 18552 KTG 31995 b
1

$35,000.
2

(C) The statewide market study report must apply a
3

20% capture rate to determine the eligible population.
4

(D) The statewide market study report must also
5

account for existing units at supportive living
6

program sites, including those that are approved but
7

not yet certified, and must consider whether existing
8

providers are fully utilized. In determining whether
9

the existing providers are utilized, the statewide
10

market study report shall consider occupancy based on
11

the most recent cost reports.
12

(E) The Department must prioritize expansion in
13

the primary market areas where there are currently no
14

supportive living program sites and within the
15

following counties based on the number of units
16

needed:
17

(i) Need must exceed 65 supportive living
18

program units in the City of Chicago, and the
19

counties of Alexander, Bond, Boone, Calhoun,
20

Champaign, Clinton, Cook, DeKalb, DuPage, Fulton,
21

Grundy, Kane, Kankakee, Kendall, Henry, Jackson,
22

Jersey, Johnson, Lake, Macon, Macoupin, Madison,
23

Marshall, McHenry, McLean, Menard, Mercer, Monroe,
24

Peoria, Piatt, Rock Island, Sangamon, St. Clair,
25

Stark, Tazewell, Vermilion, Will, Williamson,
26

Winnebago, and Woodford.

SB3555
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LRB104 18552 KTG 31995 b
1

(ii) For all other counties, the need must
2

exceed 40 supportive living program units.
3

(iii) The Department may accept applications
4

for expansion from existing supportive living
5

program providers in areas where the need is 18
6

supportive living program units or greater and can
7

be met by expansion of an existing supportive
8

living program provider location.
9

(iv) Primary market areas with existing
10

supportive living program providers that have
11

occupancy below 90% as shown on the most recent
12

cost reports are ineligible for expansion.
13

(F) The Department must also consider the
14

currently approved waiver capacity. Any expansion of
15

the supportive living program must not exceed approved
16

waiver capacity.
17

(G) The Department must also consider public
18

comments prior to making any final determination
19

regarding whether to request applications for a
20

particular geographic area.
21

(3) Within 6 months of publication of the first
22

statewide market study report, the approved, but not yet
23

certified, supportive living program sites must submit to
24

the Department:
25

(A) a written update with milestones toward
26

operations; or

SB3555
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LRB104 18552 KTG 31995 b
1

(B) an application for a change of location
2

outside the originally identified market area.

3

(4) Approved, but not yet certified, supportive living
4

program sites must begin construction within 24 months of
5

the date of submission of the written update or approval
6

of the application for the change of location.
7

(5) The Department may accept applications from
8

approved, but not yet certified, supportive living program
9

sites for a change of location outside the originally
10

identified market area when the current statewide market
11

study report demonstrates a need outside the original
12

market area as outlined in paragraph (2). The Department
13

must not accept any applications where the number of
14

units, including conventional and dementia care settings,
15

exceeds the number of units needed as identified by the
16

statewide market study report.
17

(6) The Department must not accept any applications
18

for a change of location from approved, but not yet
19

certified, supportive living program sites when the
20

proposed location is outside the original market area and
21

within 8 miles of an existing supportive living program
22

site in Cook County, 12 miles of an existing supportive
23

living program site in Alexander, Bond, Boone, Calhoun,
24

Champaign, Clinton, DeKalb, DuPage, Fulton, Grundy, Henry,
25

Jackson, Jersey, Johnson, Kane, Kankakee, Kendall, Lake,
26

Macon, Macoupin, Madison, Marshall, McHenry, McLean,

SB3555
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LRB104 18552 KTG 31995 b
1

Menard, Mercer, Monroe, Peoria, Piatt, Rock Island,
2

Sangamon, Stark, St. Clair, Tazewell, Vermilion, Will,
3

Williamson, Winnebago, or 25 miles of an existing
4

supportive living program site in all other counties.
5

(7) Current supportive living program providers may
6

apply to the Department to convert a set number of
7

conventional apartments, not to exceed 20 apartments, into
8

dementia care settings. The application for such a request
9

must demonstrate a need for dementia care settings at the
10

provider's location supported by the most recently
11

available statewide market study report, and that the
12

conversion of units will not displace any person eligible
13

for supportive living services who is currently residing
14

in a supportive living program unit from the provider's
15

location. All dementia care unit conversions must meet the
16

criteria specific to certification as outlined in 89 Ill.
17

Adm. Code 146 Subparts B and Subpart E. The Department may
18

grant a waiver from specified provisions of 89 Ill. Adm.
19

Code 146 Subpart B and E, if the applicant or supportive
20

living program provider can demonstrate that an
21

alternative is available to ensure the residents' health,
22

safety, and welfare.
23

All applications for the expansion of supportive living
24
dementia care settings involving sites not approved by the
25
Department by January 1, 2024 may allow new elderly
26
non-dementia units in addition to new dementia care units. The

SB3555
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LRB104 18552 KTG 31995 b
1
Department may approve such applications only if the
2
application has: (1) no more than one non-dementia care unit
3
for each dementia care unit and (2) the site is not located
4
within 4 miles of an existing supportive living program site
5
in Cook County (including the City of Chicago), not located
6
within 12 miles of an existing supportive living program site
7
in Alexander, Bond, Boone, Calhoun, Champaign, Clinton,
8
DeKalb, DuPage, Fulton, Grundy, Henry, Jackson, Jersey,
9
Johnson, Kane, Kankakee, Kendall, Lake, Macon, Macoupin,
10
Madison, Marshall, McHenry, McLean, Menard, Mercer, Monroe,
11
Peoria, Piatt, Rock Island, Sangamon, Stark, St. Clair,
12
Tazewell, Vermilion, Will, Williamson, Winnebago, or Woodford
13
counties, or not located within 25 miles of an existing
14
supportive living program site in any other county.

15

(h) Beginning January 1, 2025, subject to federal
16
approval, for a person who is a resident of a supportive living
17
facility under this Section, the monthly personal needs
18
allowance shall be $120 per month.
19

(i) As stated in the supportive living program home and
20
community-based service waiver approved by the federal Centers
21
for Medicare and Medicaid Services, and beginning July 1,
22
2025, the Department must maintain the rate add-on implemented
23
on January 1, 2023 for the provision of 2 meals per day at no
24
less than $6.15 per day.
25

(j) Subject to federal approval, the Department shall
26
allow a certified medication aide to administer medication in

SB3555
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LRB104 18552 KTG 31995 b
1
a supportive living facility. For purposes of this subsection,
2
"certified medication aide" means a person who has met the
3
qualifications for certification under Section 79 of the
4
Assisted Living and Shared Housing Act and assists with
5
medication administration while under the supervision of a
6
registered professional nurse as authorized by Section 50-75
7
of the Nurse Practice Act. The Department may adopt rules to
8
implement this subsection.
9
(Source: P.A. 103-102, Article 20, Section 20-5, eff. 1-1-24;
10
103-102, Article 100, Section 100-5, eff. 1-1-24; 103-593,
11
Article 15, Section 15-5, eff. 6-7-24; 103-593, Article 100,
12
Section 100-5, eff. 6-7-24; 103-593, Article 165, Section
13
165-5, eff. 6-7-24; 103-605, eff. 7-1-24; 103-886, eff.
14
8-9-24; 104-9, eff. 6-16-25; 104-417, eff. 8-15-25; revised
15
9-12-25.)

16

Section 99.
Effective date.
This Act takes effect upon
17
becoming law.

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