The current federal minimum wage of $ 7.25 an hour has not increased since 2009. In the midst of the COVID-19 pandemic, many who earn minimum wages have lost their jobs, widening the wealth gap in the United States.
In late January, the Biden government stepped up the “fight for US $ 15,” including a minimum wage of US $ 15 in a US $ 1.9 trillion COVID-19 aid package. However, when the package was presented to the Senate, the minimum wage regulations were out at the time this article went to press. The package also includes stimulus checks worth $ 1,400 and $ 130 billion for schools.
Democratic Senator Bernie Sanders has introduced a bill specifically for the minimum wage (The Raise the Wage Act of 2021) that aims to raise the minimum wage to $ 15 over a five-year period.
David Totaro, Chair of the Medicaid Home-Based Care (PMHC) Partnership and Chief Government Affairs Officer at BAYADA Home Health Care, sat down with us to discuss how the homecare industry could be affected by the move.
HOMECARE: The Biden government has the idea of raising the federal minimum wage from $ 7.25 / hour to $ 15 / hour. How is this affecting the homecare industry?
TOTARO: First of all, I would like to praise the administration for dealing with increasing the minimum wage. Wages have fallen below the real cost of living in many industries, and this is a contentious issue in the business world and other sectors.
Ultimately, people deserve to be able to earn a fair wage for their work. The increase in the minimum wage affects all workers, not just those who are considered to be minimum wage workers. In terms of the portion of the homecare programs that is paid for by private insurance, we are already paying $ 15 or more an hour in most of the places BAYADA operates. The impact we are feeling will be most felt in areas where the cost of living is much lower – like North Carolina, Arizona, and Florida – where we have competitive wage earners in the marketplace. There, every increase to $ 15 increases the cost for these customers. So BAYADA is very supportive of raising wages for our caregivers, but I am concerned about the impact on lower cost of living.
HOMECARE: Will increasing the minimum wage help homecare agencies compete for workers?
TOTARO: My first reaction is to say yes – we in the homecare industry know that we need more caregivers to keep pace with the increasing demands of our rapidly aging population, and therefore rising wages will attract more people into the care profession.
But I also think the answer here isn’t as obvious as it may seem. In our private home pay service line, we’ve been able to increase the wages we’ve offered over the past three years and we’re still having recruiting issues. If all wages are increased due to the increase in the minimum wage, we are still comparatively in the same room as before. We still have to work on the wage gaps that exist between hospital workers and home carers, and the idea that fast food service and retail workers are in the same pool of minimum wage workers as domestic workers and CNAs.
HOMECARE: What must happen at the federal level so that homecare companies can keep up with the increase? What about the state level?
TOTARO: At the federal level, we need to have an in-depth conversation with policymakers in Congress and the Biden government to raise awareness of how mandatory minimum wage increases are inextricably linked to state Medicaid reimbursement rates for home and community-based services (HCBS). As your readers know, many homecare providers rely on government Medicaid plans as their primary – if not the only – source of funding.
In US dollars, this means that an increase in the wages of the nursing staff without at least a proportional increase in the reimbursement rates can mean that many providers can no longer operate successfully. In terms of people, this means that increasing the federal minimum wage without the need for states to simultaneously increase HCBS rates will further limit access to service delivery and severely limit the ability of providers to recruit caregivers. The FMAP increase to cover the rate hike is a funding mechanism that helps states raise wages for the homecare workforce.
HOMECARE: Are Medicare Providers At The Same Disadvantage As Medicaid Providers?
TOTARO: Because increasing the minimum wage will ultimately put upward pressure on wages for those above the minimum wage, Medicare providers will need to increase wages for aides who work under the program – as well as nurses, therapists and others Nurses in Medicare. While the increase would have the most immediate and immediate effects on the aid workers, it would also increase cost pressures elsewhere.
And since Medicare is 100% federally funded, there is a clear connection between the need for increased reimbursement rates and the ability of providers to meet a minimum wage mandate. Let’s also realize that the funding isn’t just being used for wages – it covers all other costs, including the increased costs incurred by COVID (i.e., PSA, administrative complications, and CDC / CMS mandates). An increase by the federal government, which is only intended to raise wages, is not enough – the government must recognize that both wages and the unaddressed cost pressure are important for financing.
HOMECARE: Given the demographic trends in home care employment, is there a justice issue at the center of this debate?
TOTARO: Absolutely. Currently, the home care workforce consists predominantly of women (87%), colored people (62%), immigrants (31%), over 55 years of age (32%) and almost half live in low-income households. 43 percent of homecare workers rely on public health insurance such as Medicaid, and 16 percent are uninsured.
The homecare workforce deserves compensation that reflects the tremendous human, clinical and fiscal value of daily care. Compared to other health care workers, aides visits are more frequent and longer, and their individual roles can be more physically and emotionally demanding. It is important that Medicaid rates – and therefore caregiver wages – reflect the importance of the services being provided.
What’s next? How is the industry advocating change?
BAYADA began looking into this a few years ago when New Jersey lawmakers increased their state minimum wage. Our message then is the same as it is today: our caregivers deserve a living wage, and we support minimum wage increases. However, any increase in the minimum wage must be accompanied by an increase in the Medicaid HCBS rate. If rates are not increased at the same time, many homecare agencies will not be able to maintain operations.
The Medicaid Home-based Care (PMHC) partnership – a Washington, DC-based industry advocacy group (chaired by me) – has advocated the entire homecare sector. Since PMHC was founded in 2015, we’ve supported higher home care wages. As soon as President Biden’s COVID-19 stimulus proposal was brought to Congress, PMHC sent a letter to the Congress leadership supporting the increase in the minimum wage and demanding that states also increase the rates for Medicaid HCBS. PMHC is committed to continuing to work with President Biden, members of Congress, and other stakeholders to develop a policy proposal that will benefit and increase the wages of the homecare workforce that seniors and people with disabilities at risk rely on for safety to be looked after at home.