HB 96-PIONEERS' HOME AND VETERANS' HOME RATES  2:05:33 PM CHAIR WILSON reconvened the meeting announced the consideration of COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 96(FIN), "An Act relating to Alaska Pioneers' Home and Alaska Veterans' Home payments, rates, and services." He noted that the committee heard an overview of the bill on January 27 and he planned to continue public testimony at today's hearing. 2:06:24 PM CLINTON LASLEY, Acting Deputy Commissioner, Family, Community, and Integrated Services, Director, Division of Alaska Pioneer Homes, Department of Health and Social Services (DHSS), Juneau, Alaska, said he would give an overview of how the rate increases enacted in September affected the Pioneer Home system and what the revenue projection looks like. MR. LASLEY said the graph on slide 2, FY2019-FY2020 Revenue, shows revenues from 2019 compared to the projections for FY 2020. Because of the rate increases, the Department of Health and Social Services (DHSS) is projecting $7 million in additional general fund program receipt revenue for FY 2020. Last year the projection for the rate increase was $5.5 million. One increase of $350,000 on the chart is federal revenue coming from the Veterans Affairs (VA) because 14 beds at the Palmer Pioneer Home became eligible for the higher VA reimbursement rate. MR. LASLEY displayed slide 3, Long Term Care Cost Comparison-- 2019 Genworth. He noted that he used the [Pacific] Northwest for cost comparisons. Genworth surveys providers to find out what providers are charging in different markets. A website allows users to select regions for doing comparisons. The chart looks at prices for assisted living and nursing homes in Seattle, Portland, Anchorage, Alaska, and the Pioneer Homes. Many have asked him why he looks at nursing homes when the Pioneer Homes are assisted living facilities, but the Pioneer Homes have played a unique role in Alaska as there have not been enough nursing home facilities in the state. The Pioneer Homes do not provide every level of care but pride themselves in having elders move in and age in place in their final home. The average rate for nursing homes in Anchorage and Alaska is about the same at $30,000 per month. The average rate for assisted living is $6,000 per month. Some facilities in Anchorage have a base rate with add-ons for additional services, such as nursing services. The Pioneer Home system has 24-hour nurses unlike many assisted living homes, especially the smaller ones. For this chart, he averaged the rates for Levels I, II, and III to create the average rate of $7,126 for assisted living in the Pioneer Homes. He used the rate for Level IV, the highest level of care for Pioneer Homes, for the nursing home rate of $14,167. The Pioneer Homes have implemented Level V in regulation but are not utilizing that level yet. DHSS has received capital funding to build out a complex behavior neighborhood in the Anchorage Pioneer Home. That project went out to bid a week ago. Hopefully, DHSS will be able to stand up that complex in the next few months. 2:12:22 PM MR. LASLEY described slide 4, Pioneer Home Rates with Medical CPI Urban, as the most important slide in the presentation. He said he used the 2005 Pioneer Home rates to look at what the rate increases should have been to stay up with what it truly cost to provide services. The rates that went into effect September 2019 are what it truly cost to provide services. In 2005, the Level I rate was $2,240 and Level III, which was the highest level of care at that time, was $5,880. He applied medical CPI to the 2005 rates. The table shows that today's Pioneer Home rates are very close to what the 2005 rates would be today with medical CPI. The cost of providing services at the Pioneer Homes has been increasing at a rate close to medical CPI. Part of the problem is that the Pioneer Home rate increases have been sporadic. A methodology is needed to avoid this huge gap between the rates and the cost of services. MR. LASLEY noted that last year some people asked for the justification for using medical CPI when the Pioneer Homes are not hospitals, but the previous slides show that the cost of doing business is much closer to medical CPI. He said slide 5, Additional Cost in FY2020, shows just one example of an additional cost to the system of $2,850,400 in FY 2020. This slide shows only non-UGF [unrestricted general fund] and only some personnel services. This increase of $2.8 million for FY 2020 is for furlough reversals and increased pay for nurses to be equal to the private market. The Pioneer Home system had to absorb that $2.8 million, which is an almost 5 percent increase (including $900,000 in general funds added to the Pioneer Homes budget) for the Pioneer Home budget of $60 million. MR. LASLEY said slide 6, Alaska Pioneer Homes Admissions, Discharge, and Death Statistics, provides discharge data since the rate increase went into effect. Since August 1 from January 13, there were 57 admissions, 46 deaths, and 21 discharges. From their surveys, the Pioneer Homes know that 16 discharges were for individuals who moved because of the rate increases. MR. LASLEY presented slide 7, Occupancy-Waitlist Data, which shows 176 people are on the active waitlist as of December 31 and 5,448 people are on the inactive waitlist. Slide 8, Levels of Care, shows the number of residents in each level of care. He said slide 9, Payer Source, shows the number of people for different payer sources--Medicaid waiver, payment assistance, and private pay--between 2018 and 2019. 2:19:07 PM CHAIR WILSON opened public testimony on HB 96. 2:19:26 PM LAURA MARTINSON, representing self, Juneau, Alaska, said she is in favor of keeping Pioneer Homes as affordable as possible to allow families like hers to stay more connected. Her grandfather is a Korean War veteran. He was completely independent until about a year ago when he broke his hip snow blowing his neighbor's driveway at age 86. Moving him to a care facility was one of the hardest decisions her family has had to make. Ultimately, he chose to stay in Alaska to be close to his family, most of whom are in Juneau. There are many more affordable options outside of Alaska that allow more independence but he wanted to be close to his family. Shortly after he moved to the Sitka Pioneer Home, the cost of his care increased by more than $20,000 for the year and he had a 30-day warning for that. The size of the increase would be massive to anyone, but for someone who has worked his entire life to be self-sufficient in his older years is insurmountable. He is so proud that he has saved enough to take care of himself and that is crumbling out from beneath him. The fiscal priorities of the state reflect who Alaskans are as a people. She knows legislators are facing challenges, but a priority should be to take care of the state's elders and keep them close. 2:22:07 PM KARI SPENCER, representing self, Juneau, Alaska, said her 87- year-old father is in the Sitka Pioneer Home. He is trying to move to Juneau but he is on the waiting list. He has lived in Juneau many years, volunteered at the St. Vincent de Paul store, and picked up trash while he walked two miles every day. Everyone called him the can man. He was given less than 30-days' notice about the rate increase from $4,692 to $6,596, which is an increase of 40 percent. He saved his whole life for this, and he can self-pay at the Level II rate. She just saw him yesterday in Sitka and told him that she would testify today. He wanted everyone to know that he is very sad. If he runs out of money, the state will liquidate his assets, including his life insurance policies at the cash out rate instead of the full rate. That would include his U.S. Navy military life insurance that he bought at age 19. He is a Korean War veteran. He wanted his voice to be heard supporting this bill because it represents a moderate amount between the two rates. 2:24:33 PM LYNN WILLIS, representing self, Eagle River, Alaska, said he was representing himself and his friend of 45 years who lives in the Palmer VA/Pioneer Home. Mr. Willis said he heard the state representative say there was a methodology to the rate increase and if ever there was a methodology that needed careful state legislative oversight, it was this. The only word for this is cruel. It scared his friend. He thought he would be evicted, and Mr. Willis told him apparently that is not going to happen. His friend has Parkinson's and can't talk or write well. He is at the Level III of care and probably will advance to Level IV. The state made him sign a care contract for Level IV, truly a Hobson's choice. His friend doesn't want to become a ward of the state. Mr. Willis was not encouraged to read the bill has a 50/50 chance. Every day that the legislature delays taking action to bring justice to these people, these fees move them closer to financial ruin. He urged the committee to bring a fair solution to these most vulnerable of Alaskans. 2:26:51 PM KAY ANDREW, President, Pioneers of Alaska Igloo 16 & 7, Ketchikan, Alaska, said she is a lifelong resident of Ketchikan. Her 200 local members of the Pioneers of Alaska are concerned about the new price structure for the Pioneer Homes. The prices are completely out of reason and not affordable to the residents and future residents who need the security and care of the homes. This could cost the state more in the end when residents run out of money. These residents choose to stay in the state, raise their families here, and support their communities and state. These residents also hope to remain in Alaska in their old age and to be able to afford to go to the Pioneer Home to live out their lives and not have to go out of state because of cost. The Pioneers of Alaska played an integral role in the establishment of the Pioneer Homes. The original Pioneer Home in Ketchikan was a four-unit apartment building built on land donated by a member of Igloo 7. Igloo 16 and 7 continue to support the Ketchikan Pioneer Home and hold several events a year there, plus bring birthday cakes every month. She urged the committee to pass the bill to continue to give a secure and safe place for the state's elders. 2:29:10 PM ED ZASTROW, member, Pioneers of Alaska Igloo 16 & 7, Ketchikan, Alaska, said he is a 65-year resident of Alaska. He was the chair of the Pioneer Homes Advisory Board for many years. He signed up for admission to the Pioneer Homes many years ago hoping to live out his remaining years in Ketchikan with the assistance of the Pioneer Home system. Today with these price increases he has concerns. A more reasonable cost should be considered. Much of the testimony has been about people concerned about running out of money. He reminded elected officials in Juneau that the Pioneer Homes were committed to the senior population in the state of Alaska. 2:30:43 PM AVES THOMPSON, representing self, Anchorage, Alaska, said his wife was in the memory care unit at the Anchorage Pioneer Home until August 31, 2019. Her monthly cost for Level III care was $6,795 a month. On September 1, 2019, the Division of Pioneer increased the rate to $13,333 per month, an annual increase of over $78,000 a year, a 96.2 percent increase. These residents were private payers funded by their retirement income, long-term care insurance, and personal savings. This increase drove his wife out of the pioneer home. Her replacement, more than likely, will be receiving a state or federal subsidy to pay the bill as those are the only ones who can afford the pioneer home. In the long run this means that all, if not most, of the residents will be subsidized. Alaskans have often talked about a glide path to a soft landing to minimize the effect of revenue reductions and budget cuts. Late last summer HB 96 passed the House with a substantial bipartisan majority. The Senate did not have time to deal with this important bill and disappointingly, the administration still enacted the rate increase. While he can appreciate the effort to make the user pay for the service, this action is not consistent with the discussions and negotiations of other state agencies that received the benefit of restorations or portions thereof of their budgets. The residents of the Pioneer Homes can live with a more moderate increase and further increases can be done incrementally, not in one fell swoop. 2:33:30 PM MALAN PAQUETTE, representing self, Kenai, Alaska, did not testify on HB 96. 2:35:47 PM DEBBIE TILSWORTH, representing self, Fairbanks, Alaska, said her 94-year-old mother has been a resident at the Fairbanks Pioneer Home for two-and-a-half years. She said she listened to Mr. Lasley's presentation last year about the 40 to 140 percent rate increase. The residents opposed those rates and described the hardships those rates would cause. At every legislative hearing she participated in, there was overwhelming testimony from people all over the state opposing such dramatic increases. She sent a letter to Mr. Lasley May 15, 2019, signed by 103 residents of the Pioneer Homes and their families, opposing the new rates. After HB 96 passed the House, about 20 representatives wrote to the administration asking the governor to postpone the increases because this legislation was pending. The administration ignored all the public testimony and the request of the representatives and imposed increases anyway on September 1, 2019. MS. TILSWORTH said she is at the Pioneer Home six days a week, and she sees the culture has changed. "I've heard residents tell each other, 'If you need help, don't let the nurses or CNAs know. Come to me. I'll stand outside your bathroom while you're showering and make sure you don't fall. If they know you need help, they'll bump you up to the next level and charge you outrageous rates.'" She has heard residents talk about how they are going to run out of money in months instead of years and have to go on state assistance. She has heard them saying they are paying more and getting less. There are three vacant rooms in what she calls the high-rent neighborhood where the rate is currently $13,333 a month. Not surprisingly, these rooms have been vacant ever since the new rates went into effect. A friend who was going to move her mother to the Pioneer Home canceled the admission when she learned the rate would be $13,333 a month. She moved her mother to the Washington area where she found a beautiful home with assisted living for $4,500 a month. Ms. Tilsworth asked the committee to support the more reasonable rates of HB 96. The current rates need to be repealed and refunds made. An apology is also in order from the administration who caused such grief, hardship, and stress for residents and their families. 2:38:53 PM NORMAN BEAN, representing self, Palmer, Alaska, said he sold everything to move into the Palmer Veterans Home. At some point the Pioneer Home was going to close and the community supported the home. Residents thought it would quiet down. Then increases created stress. He is 91. He can't take too much stress. He signed a contract with the Pioneer Home that he was to pay so much. He figured that if he were careful, he might have enough money. He doesn't understand the people in Juneau. He understands Trump saying it's nothing but a swamp. That's what is in Juneau now. He is a strong Republican. When he signed a contract to buy a house, a car, property, the contract did not change until it was paid for. This should not change until the rites are read and he is under the ground. 2:42:01 PM SENATOR GIESSEL said the members of this committee support this bill and are eager to move it on to the next committee, so it will hopefully cross the finish line this year. She thanked him for his testimony. 2:42:26 PM DOROTHY DITTMAN, representing self, Palmer, Alaska, said she was born in Fairbanks and joined the military while in Alaska and then came back home. She moved to the Palmer Veterans and Pioneer Home on June 10, 2015, when she could afford the rate. This September rates went up and she was allotted the courtesy by the state to go on the assistance payment program. She cannot afford to live there even though she loves it, but she has been told that she has been grandfathered in. She asked where she could go if anything unforeseen were to happen. She cannot afford to live anywhere else. All the seniors she talked to greatly feel this monetary crunch. HB 96 will be a godsend. 2:45:09 PM BILL BROKAW, representing self, Palmer, Alaska, said he is a 60- year-resident of Alaska. He has been in the Palmer Pioneer Home for a year-and-a-half. His 81-year-old wife has Alzheimer's. He is 84 himself and it became impossible to handle the 24/7 care that she needed. As veterans, Mr. Brokaw, and his wife both qualified for the Palmer Veterans home. The couple moved in in June 2018. His wife has a room in the Alzheimer's section while he is in the independent living area. Through his insistence, he qualified his wife for the Medicaid waiver, VA help, and long- term care help. The financial help of these agencies paid all but $600. Last September the home made huge increases in rent. Because of agency help and the Medicaid waiver, his wife did not have increased charges, but his monthly charge increased over $1,000 a month. He was not informed of this increase when making the decision to move into the pioneer home. Their living expenses exceed their income and there is no money for some of the fun things associated with senior living. He was hoping the Senate would pass HB 96 to rescind the huge increases from September of 2019. The extravagant September increase would be replaced by a much smaller increase based on the Consumer Price Index for the urban wage earners and clerical workers in Anchorage. He would hope for a refund for himself and other residents who have suffered financially because of this unwarranted increase. Financial help to financially strapped old folks is desperately needed. 2:48:05 PM DAVE BROWN, representing self, Palmer, Alaska, said he retired after 23 years of service in the U.S. Army. He retired out of Fort Richardson in 1976 and has lived in Alaska ever since. He was able to enter the Palmer Veterans and Pioneer Home two years ago because of veteran preference. His wife could not come at the time. While waiting for his wife to join, she developed Alzheimer's and went into assisted living, which cost him $4,000 a month. He sold his house and car and everything that he had. He made a special fund to take care of her. The VA helps to subsidize him at the Palmer home. His wife never got to join him. She passed away a year ago this month. She was never able to join him under the same roof. When he brought her ashes to the Pioneer Home after she was cremated, that was the first time in two-and-a-half years that the couple were under the same roof. The spouse of a service member should be allowed in automatically. It is too late for him, but the Palmer Pioneer Home is a wonderful home. He doesn't want anything to happen to disturb that. He strongly encouraged the passing of HB 96. 2:50:46 PM CRIS EICHENLAUB, representing self, Eagle River, Alaska, said he wanted to see real solutions, not Band-Aids, for the state's challenges affecting things like ferry service, Pioneer Homes, and education. People are trying to hit the easy button by going for money, money, money and want to subsidize everything. There are ways to be more efficient, such as using interns and church organizations. The state must reorganize. There is a pot of money with not enough in it. The legislature does not have to go after people's permanent fund dividends. The state needs to see how it can be cheaper. These people do not feel that their expenses are being subsidized. There must be ways to make $4,000 a month work for someone. 2:53:03 PM CHAIR WILSON closed public testimony on HB 96 and solicited a motion. 2:53:42 PM SENATOR VON IMHOF moved to report the committee substitute (CS) for HB 96, version 31-LS0646\S, from committee with individual recommendations and updated fiscal notes. 2:53:54 PM There being no objection, CSHB 96(FIN) was reported from the Senate Health and Social Services Standing Committee.