Situation Report | February 15, 2021
As featured in HCA’s news clips last week, state legislation is being drafted which would reportedly require a base salary of $35,000 annually for home health aides.
The legislation was announced last week as part of a Fair Pay for Home Care campaign. It is reportedly being prepared for introduction by Assembly Health Committee Chair Richard Gottfried and Senate Committee on Aging Chair Senator Rachel May.
While details of this proposal have not as yet been shared, bill sponsors have specifically referenced a new CUNY School for Labor and Urban Studies report on aide wages. It asserts that raising wages could double the size of the home health aide workforce and create “spillover” economic effects that would also accrue to state and local governments at a net gain above the cost of providing the wages.
The CUNY report models two “target” levels — one with salaries ranging between $30,000 to $40,000 (depending on the region of the state) and another ranging from $40,000 to $50,000. It estimates economic benefits of between $7.6 billion and $12.9 billion depending on the wage target. It also estimates net gains across local, state, and federal levels of between $3.7 billion and $6.6 billion.
HCA and our Board of Directors addressed this proposal directly with Assemblyman Gottfried during a meeting on our state budget priorities last week. We expressed a shared commitment — and our longstanding and fervent appeal — for compensation and supports that match the important, valued and difficult work of home health aides and personal care aides, especially considering the hardships of the pandemic. We also noted that higher wages result in less staff turnover and other systemic challenges for the provision of care. We also commended the CUNY study approach that argues for improved state investment in the home care workforce which will produce an overall positive return to the state’s economy.
However, we noted, Medicaid rates have historically underfunded the current obligations for paying wages and related costs. As our most recent State of the Industry report shows, wages and benefits are among the highest impacts on an agency’s rising costs. And providers have shouldered new, unanticipated costs, like Personal Protective Equipment (PPE) in the pandemic. More than half of agencies said PPE was a top impact on their finances. Meanwhile, one-third of agencies have had to rely on short-term funds from the federal Paycheck Protection Program (PPP) simply to cover payroll.
In recent years, the state and federal governments have implemented changes to the Fair Labor Standards Act, incremental statewide minimum wage increases, and the Wage Parity Law. In theory, these have all been laudable goals. However, in practice, providers have not received commensurate, consistent, or direct rate increases to cover the costs of these mandates, most of which are an obligation of the state Medicaid program.
Given the state’s current fiscal deficit and the Medicaid cuts already on the table, it remains unclear how a proposal of this kind could be funded.
HCA will report back to the membership once the bill has been introduced and/or previewed to us for further, careful analysis. HCA will work with all parties in the opportunity to support the home care workforce.