The Fragility of the Caregiving Infrastructure

On March 31, 2021, President Joe Biden proposed a sweeping $2 trillion infrastructure package dubbed the American Jobs Plan. The proposal includes funding efforts for highways, bridges, transit systems, water supplies, the electrical grid and more. An unexpected inclusion is $400 billion for home- and community-based care for seniors and people with disabilities; the package would also increase wages for in-home caregivers.

During his presidential campaign, Biden had said he would devote $450 billion to allow more older Americans to receive care at home; homecare’s position in the package is described in a White House fact sheet as an administration effort to “solidify the infrastructure of our care economy.”

“It’s expanded services for seniors,” Biden said in a news conference about the proposal. “It’s homecare workers, who go in and cook their meal, help them get around and live independently in their home, allowing them to stay in their homes—and I might add, saving Medicaid hundreds of millions of dollars in the process.”

Care at Home

Fifty-seven percent of Medicaid’s long-term care budget goes to home- and community-based services; this amounted to $92 billion in the 2018 federal budget year. While all states offer some form of this service, 41 have waitlists totaling nearly 820,000 people, with an average wait of 3.2 years. The American Jobs Plan would expand these services in order to eliminate the wait list—and would treat in-home care like institutional care. One way the plan would do this is by expanding the Medicaid Money Follows the Person program, which aims to move seniors back into their homes.

“The past year has led to job losses and threatened economic security, eroding more than 30 years of progress in women’s labor force participation,” reads the White House fact sheet. “It has unmasked the fragility of our caregiving infrastructure.”

Caregiver Wages

The U.S. Bureau of Labor Statistics reports that the median pay for a homecare worker was $12.15 per hour in 2019. Homecare workers are often women and people of color, with immigrants making up nearly one-third of the workforce. Overall, nearly half of the homecare workforce lives in a low-income household, with 43% of workers relying on public health care coverage such as Medicaid. One-third don’t have insurance from their employer. A portion of the $400 billion would help workers receive “a long-overdue raise, stronger benefits and an opportunity to organize or join a union,” according to a statement from the administration. Homecare groups have said that Medicaid reimbursement will need to compensate for any increased wages, which the plan addresses.

Response & Pushback

The plan will need to go before Congress to get approval. It faces an uphill battle with Republicans for a variety of reasons, including the provisions allowing workers
to unionize.

“It seems like it’s a boondoggle to create more union workers and through the unions funnel money back to the Democrats” via campaign contributions, Brian Blase, a former Trump White House health care adviser, said in an interview with ABC News.

The U.S. Chamber of Commerce and other business groups have also come out against the plan, particularly proposed corporate tax increases of 21% to 28%. The White House’s stance is that higher taxes would offset concerns about adding to the federal deficit.

Some Republicans have said that home- and community-based services don’t belong in an in an infrastructure package at all. But others have no issue prioritizing in-home care over institutional care.

“It is bipartisan to support people who would be eligible for Medicaid staying at home rather than going into institutions,” said Blase. “However, loosening eligibility rules will lead to ‘runaway expenses.’”

Biden recently met with several key lawmakers to work out getting the plan put into legislation, including Sens. Maria Cantwell (D-Wash), Alex Padilla (D-Calif.), Deb Fischer (R-Neb.) and Roger Wicker (R-Miss.); as well as Reps. Garret Graves (R-La.), Don Young (R-Alaska), Donald Payne (D-N.J.) and David Price (D-N.C.). On the Senate side, all but Padilla are members of the Commerce Committee; Price chairs the House Appropriations subcommittee for transportation.

“The president made a compelling case for acting big and broadly when it comes to the definition of infrastructure,” Padilla said in an interview with the Washington Post. The freshman senator also said Biden’s message was that focusing only on deferred maintenance on roads and bridges would be a significant lost opportunity.

Industry Response

Homecare advocacy groups have lauded the proposal for its efforts to improve homecare.

“The president’s support for homecare is a monumental advance in the decades-long effort to provide full access to health care outside of an institution. This effort deserves the complete support of the Congress and the American public. … The benefits of homecare are long established. We all should work to remove any barriers to homecare, including unnecessary care waiting lists and insufficient caregiver compensation. The caregivers should be given the high respect they deserve along with fair compensation for the essential services they provide.”

—National Association for Home Care & Hospice

“We see a tremendous opportunity to leverage and skill the home and community workforce to ensure that Americans receive quality health care and this effort ensures that America is able to meet the need not just now but for generations to come. We fully support the stated intention to work to solve the artificial wage ceiling created by reimbursement rates. This will be a game-changer for an industry in desperate need of quality talent to fill open roles and transform the direct care workforce.”

—Helen Adeosun, Founder and CEO of CareAcademy

“The homecare workforce has been undervalued and under-appreciated for far too long. PMHC is encouraged by the Biden Administration’s recognition of the value of the home care workforce and the proposed efforts to improve access to, and the quality of, home and community-based home care services.”

—David J. Totaro, Chairman of the Partnership for Medicaid Home-Based Care

We’re pleased to see that the Biden Administration is recognizing the need for a stronger investment in home-based care. The value of home medical equipment and caregiving in the home has never been more evident than it has been during the COVID-19 pandemic, and the need for increased access to quality HME is only going to become more important as the population of older Americans continues to grow.

—Thomas Ryan, President and CEO of AAHomecare