Although significantly less than the rates imposed by the governor last fall, the new fees passed under House Bill 96 are still high. Nevertheless, families are pleased to see the rates placed into statute. “If rates want to be increased in the future it puts that in the legislature’s hands where it’s inherently more bipartisan,” says Lauren Wilde, whose mother lives in the Sitka Pioneer Home, “and it allows opportunities for public testimony.” (KCAW file photo)

By the numbers, House Bill 96 is some relief for residents of Alaska’s Pioneer Homes, but it’s not rolling back the clock.

The increases under the bill are still substantial, compared to rates residents were paying only a year ago.

Nevertheless, one family with a loved one in the Sitka Pioneer Home welcomes the bill.

For Level I care through August of 2019, the cost was $2,588 a month. Residents who didn’t have a monthly income sufficient to cover that amount, had to pay all their income, except for $200. Level I care shot up by about $1,000 under the Dunleavy administration’s new rate policy. House Bill 96 has brought it down again, so it’s now about $400 above the original rate.

Residents can now keep $300 of their own income.

The increase is more significant in the higher levels of care. What was Level III care nearly doubled under the governor’s plan, from $6,800 to $13,300, and was recategorized as Level IV. Under House Bill 96, Level IV is about $4,000 a month less — $9,300 — but still over $2,500 more than it was in 2019.

For Sitkan Lauren Wilde, whose mother is in Level IV at the Sitka Pioneer Home, this has been a huge shift in plans. Following the governor’s rate hike last September, her family was planning to build an addition to accommodate her mother at home.

“Even paying for in-home care around the clock, or as much as she would need it — overnight care, and some daytime care to help my dad, and to purchase the equipment necessary to do the in-home care — it would have still been cheaper in the long run to keep her at home, rather than pay the Dunleavy administration’s original $13,333 per month rate,” said Wilde.

Wilde says having her mom at the Sitka Pioneer Home really is the best environment for her, so they’re pleased to put their plans on hold for the time being. It’s also nice to know that her family will be spared any more price shocks in the future. House Bill 96 puts the rates — and an inflationary formula — into statute.

“So this prohibits this administration and future administrations from raising rates based solely on their fiscal philosophies,” she said. “And if rates want to be increased in the future it puts that in the legislature’s hands, where it’s more inherently bipartisan, and it allows opportunities for public testimony. So if they want to raise rates again, it’s a legislative responsibility.”

Wilde credits the ability of the legislature to compromise on the matter, and the governor’s decision to sign the bill — rather than veto it, which many considered a real possibility. Wilde says it’s an acknowledgment of the state’s “fiscal responsibility in playing a role in caring for our elders, and giving them a humane and dignified way to live out their twilight years.”

A proposal to more than double the monthly costs for most residents in Alaska’s Pioneer Homes met with stiff opposition during recent public testimony on the issue (5-28-19).

Family members — and residents themselves — warned the Division of Pioneer Homes that rate increases could likely backfire, and rather than balancing the budget of Alaska’s subsidized senior care, could instead send many elders out of state.

On paper it sounds really simple. This is the state director of the Division of Pioneer Homes, Clinton Lasley, explaining the rationale behind the administration’s plans.

“The rates being proposed in regulation are reflective of the Division charging what it costs to provide services,” said Lasley. “Currently, the state has been paying those rates to provide services, but we have not been charging them to the general public.”

In a letter sent to all Pioneer Home residents on February 25, Lasley explained that the state subsidizes their care at a cost of more than $30 million a year.

But the state’s Pioneer Homes — although subsidized — aren’t free. Currently there are three levels of care, ranging in cost from around $2,600 a month to almost $7,000 a month, for residents who can live independently to those who need 24-hour nursing services.

Broadly speaking, the administration’s proposal would push rates up by 40- to over 120-percent, topping out at $15,000 a month for residents with so-called “complex behaviors” like dementia.

During a public hearing held on May 28, simultaneously in all six of the state’s Pioneer Homes, there was significant backlash.

A lot of it sounded like this: From resident Carol Scott, who has lived in Alaska 59 years — the last four in constant worry about meeting her rent at the Anchorage Pioneer Home.

“And then this year, the governor’s proposed budget knocked our twice-mended socks off,” said Scott. “We already were wearing clothes from when we retired 10-15 years ago, and our allowance is only $200 a month.”

Scott is referring to a payment assistance strategy used by the Pioneer Homes to ensure residents that their bills are paid as much as possible through personal income — with at least $200 left over each month. She went on to call the proposed rate structure preposterous, and unaffordable for Alaskans.

94-year old Nancy Ricketts, a resident in the Sitka Pioneer Home, testified that the proposed rate structure undermined her plans to remain self-sufficient.

“I sold my house to be able to afford the rates as much as possible here at the Pioneer Home,” Ricketts explained. “I planned carefully so that I could remain in control of expenses. I remain in the best health possible to maintain these goals for the rest of my life.”

Ricketts said that the added stress of paying higher bills would likely force her health — and that of many of her neighbors — into decline.  

Aves Thompson, whose wife is in the memory care unit of the Anchorage Pioneer Home, said he paid 100-percent of her bill out-of-pocket. The proposed rate increase, in his family’s case, could end up costing the state more.

“The cost increase will drive my wife out of the Pioneer Home,” Thompson said. “This means that this private payer will no longer be paying the entire amount of the fee. The replacement will, more than likely, receive state or federal subsidy to pay the bill, as they will be about the only ones who can afford to be in the Pioneer Home.”

The Division of Pioneer Homes took testimony from its facilities in Anchorage, Fairbanks, Palmer, Juneau, Ketchikan, and Sitka, and from people calling in over the phone. Much of the testimony focused on the ramifications of the dramatic increases, but some focused on the timeline.

Lauren Wilde’s mother is a level III resident of the Sitka Pioneer Home who pays $6,800 per month for care. Under the administration’s proposal, her mother would be at level V care and pay $15,000 a month — according to Wilde, more than the combined income of her parents when they were working.

Wilde understands that costs are going to rise, but these changes were coming too fast.

“People need time to figure out how they’re going to adapt to increasing costs,” Wilde argued. “Instead of increasing incrementally over time, you’ve put forward a plan to more than double the costs for my mom within about four month’s time. You’re not giving us enough time to figure out how to cope with these changes. And obviously these are not small changes. We’re talking about $160,000 a year.”

Wilde’s mother, along with Thompson’s wife, are in the majority in Alaska’s Pioneer Homes, where 56-percent of residents are currently in level III care.

The Alaska Legislature has also weighed in on the timing of increases. On May 28, the same day as the public hearing, nineteen members of the House of Representatives sent a letter to Clinton Lasley and his boss, Commissioner Adam Crum of the state Department of Health & Social Services, urging the department to use House Bill 96 as a guideline for setting rates in the pioneer homes.

HB 96 allows for a one-time reset of the basic rate structure in the pioneer homes, and then “reasonable and regular rate increases” keyed to the Social Security Cost of Living benchmark.

HB 96 passed overwhelmingly in the House 35-4 on May 10, and is now parked in the Senate’s Health & Social Services Committee.

The Department of Health & Social Services is taking public comment on the proposed changes to the Pioneer Home rates through 5 p.m. June 28. After that, the department could implement the new regulations any time.