Residents of the Armed Forces Retirement Home will have a temporary reprieve from a proposed fee increase, which now will be phased in over three years, officials announced.
And for the first time, married couples may soon be able to live in the AFRH.
The pending defense authorization bill would give the green light to a number of AFRH officials' requests designed to increase revenue for the financially strapped retirement home, which serves certain retired and former enlisted members. But they did slow down officials' plans to increase fees Oct. 1, requiring them to phase in the increases.
The pending legislation would open the door to more residents, including married couples as well as former enlisted members who suffered a service-connected disability, regardless of whether they’re incapable of earning a living.
The House has approved the bill; the Senate is expected to vote this month.
In January, fees will increase to 46.7 percent of a resident’s income or a maximum of $1,990 a month, up from 40 percent of income and $1,458 maximum, said retired Army Maj. Gen. Steve Rippe, who took over as chief executive officer of the retirement home in November. He announced the changes to residents July 25.
By January 2021, residents will pay 60 percent of their gross income, or a maximum fee of $3,054 per month, for the independent living unit and associated services such as three meals a day, health care services, transportation and other activities. That maximum fee for those units, where about three-fourths of the residents live, had been scheduled to take effect Oct. 1; a number of residents contacted their members of Congress with concerns about the increases. The cost of operating those independent units is $3,054 a month, AFRH officials said.
The phased in approach gives residents more time to make financial plans to adjust, Rippe said. He said much of the pushback was from residents whose income is more than $4,583 a month, and whose fees would double, reaching the max amount, under the planned rate hike.
“The thinking was, they ought to pay what it costs us to operate,” Rippe said. He said feedback from the new fee schedule has been good, as residents are pleased the increase isn’t happening Oct. 1.
One resident described the change as a “small reprieve,” but said the increase is “still a bit draconian.”
“I unfortunately am one of the casualties and have chosen to relocate until such time as I can have my financial house in order by fully paying off past consumer debt,” he said in an email. “I do intend to reapply and once again become an AFRH resident if (when) space is available.
“Every resident’s situation is different. However, for the average 84-year-old resident, it is a heck of a position to be put in.”
Residents won’t be evicted if they’re unable to pay, Rippe said, noting that officials will work with residents individually.
All AFRH residents are retired or certain former enlisted members. AFRH has about 858 residents on two campuses, one in Washington and one in Gulfport, Mississippi. It can accommodate more than 1,100 residents.
The home for retired enlisted members raises fees to cover more of its operating costs.
For residents in the higher levels of care of assisted living, long-term care and memory support, the income percentage limits will drop from an 80 percent of income to 70 percent with the new fee structure.
The fee increase is part of the efforts of AFRH and Defense Department officials to turn around a deficit of about $22 million a year at AFRH, a shortfall that’s being funded by taxpayers. The home’s trust fund dropped from $186 million in 2010 to $46 million in 2015, where it remained at the end of 2017. The AFRH operating budget is about $64 million a year.
In addition to money from the trust fund, the AFRH relies on the 50-cent-a-month deduction from active-duty enlisted service members’ paychecks, and fines imposed on enlisted members for disciplinary violations.
The pending legislation would also allow spouses to be residents if they were married when the service member left the military. Details are being sorted out “as we speak,” Rippe said.
AFRH has ramped up efforts to generate additional revenue. For example, officials reached an agreement June 28 with the Veterans Affairs Department to lease several hundred parking spaces on AFRH property, which had been used for free by the VA.
All told, the efforts underway are estimated to bring in more than $15 million in extra revenue by 2021. The increased residence fees would bring in another $6 million.
That’s aside from another larger plan for more revenue. AFRH plans for the mixed-use development of more than 4 million square feet of space in 35 buildings on the Washington campus. That campus is listed on the National Register of Historic Places as a historic district. Among those buildings is the historic hospital complex, built in the early 1900s.
Officials issued a request for proposals in May, and proposals are due in September.