This article is a follow-up to the Feb. 2020 edition story “Pioneer Home residents file lawsuit over rate increases.”

On Nov. 4, 2019, a lawsuit was filed against Alaska Pioneer Homes Director Clinton Lasley, Commissioner of the Dept. of Health and Social Services (DHSS) Adam Crum, Alaska State Governor Michael J. Dunleavy and the State of Alaska on behalf of Alaska Pioneer Home residents Eileen Casey of Ketchikan, Marion and Howard Rider of Juneau and all Pioneer Home residents. The lawsuit is in response to the state’s recent decision to implement an extreme rate increase on Sept. 1, 2019, a move considered a financial necessity by Lasley and other state officials.

The rate increase seeks to charge Pioneer Home residents the full cost of providing care. Before the Sept. 1 rate increase, the state subsidized a portion of residents’ monthly cost of care, with monthly rates as follows: Level I, $2,588 monthly; Level II, $4,692 monthly and Level III, $6,795 monthly. Starting Sept. 1, 2019, residents were expected to pay an increase of up to 140% from their prior monthly rates, and the three level care system was expanded to five levels of care to accommodate residents with dementia and associated complex behaviors. The current rates residents pay monthly per level are as follows: Level I, $3,623; Level II, $6,569; Level III, $11,185; Level IV, $13,333 and Level V, $15,000.

Between Aug. 1, 2019 and Jan. 13, 2020, 16 discharges from the Pioneer Homes system have been a direct result of inability to pay. For those that cannot leave the Homes, the lawsuit’s call for equitable estoppel and the recent re-opening of House Bill 96 in the Legislature provide hope.

Sudden versus gradual increase

Representing the Pioneer Homes residents is plaintiff lawyer Libby Bakalar, who served as an assistant attorney general of the State of Alaska for nearly 12 years.

“The strategy with this administration is stonewalling,” said Bakalar. “Any time there is litigation, you won’t get anything out of them. Director Lasley can say the statute protects residents while threatening eviction.”

In a Feb. 25, 2019 letter sent to residents warning of the Sept. 1 rate increase, Lasley stated that implementing the rate increase all at once would create the most consistent and predictable financial transition for residents. The dramatic need for the sudden rate increase should intuitively be inspired by a severe cut to the Pioneer Homes budget, Lasley reasoned. However, the budget cut has not been made: the Pioneer Homes budget between FY19 and FY20 has stayed at $34 million. The only difference financially is that funds have been moved from unrestricted general funds (UGF) to designated general funds (DGF). Prior to the increase, UGF were used to subsidize resident care. Post-increase, DGF is specifically set aside for residents requiring Payment Assistance, a program that indebts financially destitute residents to the state.

“This was decided by regulation,” argued plaintiff attorney Bakalar. “By regulation, I mean they have decided to implement this by choice. There is nothing in the statute that requires them to do this.”

If Bakalar’s request for equitable estoppel is granted, it would cease the Sept. 1 rate increase and provide relief from the increase to all eligible residents through the class action nature of the lawsuit. While no hearing date has been set for the lawsuit as of Senior Voice press time, some members of the current legislative session seek to advocate for a gradual and consistent rate increase that residents can truly predict and plan for through House Bill 96.

Bill heard in Senate

Sponsored by Anchorage Representative Zack Fields, HB 96 proposes a steady rate increase for Pioneer Home residents annually over time, rather than all at once. The gradually increased rates will adjust for inflation — a factor that hasn’t been considered since 2004 — and be guided by the Social Security Cost of Living Adjustment. HB 96 passed 35 to 4 in the House in May 2019, but was halted in the Senate at the end of last year’s legislative session.

If passed, HB 96’s proposed rates would be as follows: Level I, $2,976 per month; Level II, $5,396 per month; Level III, $7,814 per month and Level IV, $8,500 per month. Rather than charging a set amount for Level V, rates would be determined by each resident’s needs regarding complex behaviors.

On Jan. 27, 2020, the Senate Health and Social Services Standing Committee met to discuss HB 96. Affected residents and related parties were in attendance for testimony. All were in support of HB 96, stating that ample time for financial planning and consideration would allow many of them to pay for the increase, ultimately keeping them in their homes.

Brad Rider, Power of Attorney for Marion and Howard Rider, was among the many that testified.

“Pioneer Homes were never meant to make money,” Rider said. “They were designed to take care of elderly people in Alaska. The Pioneer Homes have been in my parents’ plans since day one, like many others... The state wants to give thousands of dollars in PFDs every year. You tell me what any of you — myself, anybody — has done that the state owes us a paycheck at the end of the year, and they can’t take care of the elderly.”

HB 96 will be reworked in the upcoming legislative session. To follow the movement of the bill in real time, visit http://www.akleg.gov and enter “HB 96” in the search bar.