More than three-fourths of the residents live in independent living units, where the average monthly fees paid will increase by about 55 percent ― from $1,226 to $1,895. The cost of providing that independent living unit and associated services such as three meals a day, health care services, transportation and activities is $3,054.
“This is a difficult thing to do and not an action we take lightly,” said retired Army Maj. Gen. Stephen Rippe, chief executive officer of the Armed Forces Retirement Home. “Each resident served our nation in uniform, and their experience in the military and the circumstances they live with today as a result of that service are deeply personal.”
The fee increase comes as the result of an analysis of the cost for each level of care at the facility, and an analysis of residents’ income.
“We realized when we determined what our cost was, that our maximum fee was dramatically less than that. We had residents who could afford to pay full cost in independent living but the taxpayer was heavily subsidizing it,” said Rippe, who took over as CEO of AFRH in November. He and his staff have been analyzing operations and looking at new ways to bring in more revenue.
AFRH and DoD officials have been examining every aspect of the AFRH operations, in the wake of a serious cash flow problem that resulted in nearly the AFRH trust fund. It declined from $186 million in 2010 to $46 million in 2015.
AFRH has been operating at a deficit of about $20 million a year, with the shortfall being made up by taxpayers.
Independent living fees are now capped at $1,458 a month or 40 percent of income, whichever is less. New fees will be capped at the actual operating cost of $3,054 or 60 percent of income, whichever is less.
While 10 percent of residents will be paying the maximum amount, others will see increases because the calculation will require a higher percentage of income. For those paying less than the operating costs, the difference is subsidized by the 50-cent-a-month deduction from active-duty enlisted service members’ paychecks and fines imposed on enlisted members for disciplinary violations.
Rippe held a town hall with residents Monday morning at the Washington, D.C., campus, and video conferenced with the Gulfport residents.
“The reaction when we talked to residents was positive,” he said. The majority of residents have income in the $40,000-a-year range, he said, and many have done research and know the AFRH cost is less than that of other similar facilities.