Source 1: Tapping into Self-Pay
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Source 1: Tapping into Self-Pay

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To Charge or Not to Charge for Services?

The Older Americans Act (OAA) plays a vital role in funding services for our nation’s older adults. Yet, government funding has not kept pace with the rapidly growing aging population. As a result, nonprofits must look for other sources of revenue.

Some members of the aging network see an opportunity in charging clients for services. Others struggle with whether charging for services compromises their mission and how to charge fairly. 

Why Charge for Services?

Like it or not, it’s time to think and act differently about funding aging programs. The demand for long-term services and supports will continue to grow along with the aging population. Older adults and people with disabilities want and need assistance to stay independent as long as possible.

Charging for services can enhance your revenue and your capacity to serve more consumers. Plus, you can reinvest the surplus to boost your services to low-income people in need—who are at the core of your mission.

Many agencies report that serving private pay populations actually empowers their low-income clientele to insist on better, more flexible, and timely services. The results have been improved service delivery for all income levels. 

What the OAA Says

The U.S. Administration on Aging (AoA) considers offering services to private pay consumers an important opportunity to reach a population not traditionally served by the network. The 2006 OAA reauthorization explicitly states that the network should “support people of all incomes in community living.”

Though it is not a requirement that agencies charge for services, Section 315 of the OAA is devoted to “Consumer Contributions,” and it addresses cost sharing and voluntary contributions specifically.

While the OAA prohibits cost sharing for some core services such as information and assistance, elder abuse prevention, and nutrition programs, it does not preclude agencies from charging for other services such as assistance with financial planning, respite care, or transportation.

It also allows agencies to offer services on a sliding fee scale and to encourage voluntary contributions by consumers whose incomes exceed 185% of the poverty guideline.

More Resources

3 Strategies for Private Pay
Charging clients for services is a hot topic in the aging network. If you’re considering charging for services, here are three approaches to facilitate a smooth and effective transition. Get started.

AoA's Technical Assistance Exchange
The U.S. Administration on Aging sponsors a Technical Assistance Exchange for states and community organizations that are designing, implementing, or expanding Aging and Disability Resource Centers and other types of single entry point systems. The exchange provides a treasure chest of information about serving private-pay clients. Explore the site.

Maryland Access Point Howard County Promotional Video
The Howard County Maryland Office on Aging created this video to promote its services. Other organizations may find it a useful example of marketing efforts to a broader constituency. Watch the video.

Training: Making a Profit in a Non-Profit World
Instructor: Robert Littke, Senior Services, Inc., Kalamazoo, MI
How can a nonprofit organization justify making a “profit?” This training covers defining the private market, examining nonprofit status and assumptions, determining the true cost of services provided and how to design payment structures within a good business plan, and examples of fee-for-service programs. View the Webinar.

Training: Reaching and Serving Private Pay Consumers
Instructors: Sarah Lash and Christina Bowen (Technical Assistance Exchange), Beverly Burton and Sandi Smith (Florida)
This training discusses the transition to serving a broader income spectrum and identifies the issues, challenges, and rewards involved. The trainers discuss considerations such as Information and Referral Database inclusion criteria, staff training, marketing strategies, and how to work with higher-income consumers to meet their unique needs. Listen to the training.

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