Rate increases raise questions about Pioneers’ Home’s future

On Sept. 1, the Alaska Department of Health and Social Services raised the rates for the Pioneers’ Home by increases of 40-140%, leaving many of the state’s seniors wondering if they had the money to pay for their retirement.

Costs for the home’s lowest level of care rose from $2,588 to $3,623 a month, and new tiers of service were added with the highest level of care costing $15,000 a month.

That rate increase was met with a lawsuit on behalf of Pioneers’ Home residents and family members on Nov. 4.

“Pioneer’s Home residents relied on the rates under which they signed their contracts and reasonable annual rate increase when they sought admission to the Homes,” the suit alleges. “They did not reasonably expect their rates to increase so astronomically in a single month.”

In addition to causing financial worries for Pioneers Home residents and their families, the rates have thrown the program’s financial future into uncertainty.

The Pioneers’ Homes are a state-funded assisted living program open to seniors 65 and older who are in need of aid, benefit or safety, according to the DHSS website. The state has subsidized the cost of care, but earlier this year Gov. Mike Dunleavy proposed cuts to the state spending in an attempt to create a budget where expenditures equal revenues.

For the Pioneers’ Homes, that meant reducing the amount the state subsidizes the program by raising rates on seniors who could afford to pay with the state-funded Payment Assistance Program.

“You’ve got someone in the Pioneers’ Home paying a regular rate, and you raise the rate and that person leaves, someone else who may be low-income comes in,” David Teal, director of the Legislative Finance Division, said. “Instead of paying the rate, you made empty beds of people who had a lower level of care and replaced with someone with a higher level of care who may not be able to pay.”

That would create a situation where the amount the state needs to subsidize would actually increase. It’s too soon to say if that will in fact be the case, Teal said. There are a number of factors which affect people’s decisions to stay or go, and there won’t be enough data for another year or so to know what kind of impact the rate increases will have, according to Teal.

Dunleavy spokesperson Jeff Turner declined to comment for this article as it concerns ongoing litigation. Turner referred the Empire to the Department of Law. DOL could not immediately be reached for comment but the department does not typically comment on pending cases.

Life at the home

The six Pioneers’ Homes across the state serve 497 seniors, according to state data. In Juneau, there are currently 48 residents, according to Gina Del Rosario, home administrator for the Juneau Pioneers’ Home.

Most elders live in shared rooms, Del Rosario said, with shared bathrooms and separate shower facilities.

“I’ve found it’s not the size of the room but the community that they have built there, so when a private rooms open, they’re not always interested,” she said.

Clinical staff are on site to provide medical care, but recently the Juneau Pioneers’ Home resident nurse practitioner was moved to the central office where she oversees all six homes.

“We’re very well taken care of, there’s no doubt about that. Our CNAs (Certified Nursing Assistants) are just superb,” said Katie Hursh, who lives at the Juneau Pioneers’ Home with her husband. Hursh said the only reason she’s in the Pioneers’ Home is because of her husband who has Alzheimer’s disease.

While she has no complaints about the level of care she and her husband receive, she does have worries about the rate increases.

“My rent went up $1,100 from $2,500 to $3,600, and I mean that’s ridiculously high rent because I’m a level 1,” Hursh said. A level 1 is the lowest level of care, and typically only involves room and board, according to Del Rosario.

“I was just telling these ladies I kick myself for not going down south,” Hursh said, gesturing to her co-residents Elenor Feero and Marion Rider. Rider is one of the plaintiffs named in the suit against the state. “I have one daughter in Oregon, you get so much more for your money down there.”

Hursh said she has lived in Juneau for 64 years, and she and her husband wanted to stay in a familiar place with friends. But with the rate increases she questions whether it’s worth it to stay.

“We don’t live in luxury,” Hursh said. “We live small rooms, we share bathrooms. There’s a lot to be said to going down south and having your own apartment.”

Hursh said her husband’s poor health was the only thing keeping her here. Before coming into the Pioneers’ Home, Hursh and her husband sold their home, so they don’t receive state assistance.

But if residents like Hursh and her husband who can afford to pay full price decide to leave, that could lead to the situation alluded to by Teal where paying residents are replaced by subsidized residents.

Aiming for modest, predictable increases

Hursh said she and some of her co-residents were keeping an eye on the Legislature in hopes there may be a reversal of rate increases. During the Legislature’s regular session earlier this year, the House passed a bill which would reverse the increases enacted under Dunleavy’s budget and tie annual increases to the rate of inflation. That would create a much more modest annual increase in rates.

Rep. Zach Fields, D-Anchorage, one of co-sponsors of the bill, House Bill 96, said he was optimistic it would pass the Senate.

HB 96 “passed the house overwhelmingly,” Fields told the Empire in an interview Friday. “I’m optimistic the Senate will consider it because there’s been such broad support for the Pioneers’ Homes.”

Fields said HB 96 would establish a much more predictable rate of increase for rates.

But not knowing what’s going to happen is stressful for elders and their families, Del Rosario said.

“The anxiety of waiting over whether the rate increase would happen was big,” she said. “It caused many sleepless nights for many of the elders.”

Del Rosario said that many seniors are concerned because they’re on fixed incomes. DHSS has said that no seniors will be evicted because of inability to pay but that doesn’t necessarily provide reassurance.

“That’s pretty cold comfort, when you think, sure they’re going to take all your money before…” Hursh said, trailing off.

It raises the question of what the goal of the Pioneers’ Home should be, Teal said.

“You get into arguments about ‘Well, I want to leave money to my kids, why should I pay higher rates?’” Teal said. “There’s so many ways to twist this about what’s fair and what people have been promised, it all makes it a very messy thing.”

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• Contact reporter Peter Segall at 523-2228 or psegall@juneauempire.com.

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