How a New Federal Minimum Wage Could Affect Home Health

The current federal minimum wage of $7.25 an hour has not been raised since 2009. In the midst of the COVID-19 pandemic, many making minimum wage have lost their jobs, furthering the wealth gap in the United States.

In late January, the Biden administration hit the gas on the “Fight for $15,” including a $15 federal minimum wage in a $1.9 trillion COVID-19 relief package. As the package went before the Senate, however, the minimum wage provisions fell out. The package also included $1,400 stimulus checks and $130 billion for schools.

Meanwhile, Sen. Bernie Sanders has introduced a bill specific to the minimum wage, The Raise the Wage Act of 2021, which would raise the minimum wage to $15 over five years.

Hitting the Brakes

Home health advocacy groups are urging caution on the increase, citing current Medicaid reimbursement rates. The U.S. Bureau of Labor Statistics (BLS) reports that the median pay for a homecare worker is $12.15 per hour as of 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.

It’s not that the home health community doesn’t support raising the minimum wage; stagnant wages have kept companies from competing for top talent for years. But current state Medicaid reimbursement rates, which many agencies rely on, won’t make up for federal increased wages—unless states are compelled to up their reimbursement.

“The impact we feel will be felt hardest in areas where the cost of living is much lower—like North Carolina, Arizona, Florida—where we offer aides wages that are competitive within the market,” David Totaro, chief government affairs officer at BAYADA Home Health Care, said in an interview with HomeCare. “There, any increase toward $15 will drive up costs for those clients. So BAYADA is very supportive of pushing wages up for our caregivers, but I do worry about the impact in lower-cost-of-living areas.”

The Partnership for Medicaid Home-Based Care (PMHC), which Totaro chairs, recently published a letter to Congressional leaders on the issue. “PMHC strongly supports policy reform that recognizes and protects this dedicated workforce,” the letter reads. “At present, however, inadequate Medicaid rates prevent these professionals from receiving compensation commensurate with the value they produce for our nation with the majority earning just above current state minimum wage levels.”

“The homecare workforce deserves compensation that reflects the tremendous human, clinical and fiscal value of the care they provide every day,” Totaro added. “When compared to other health care workers, aides’ visits are more frequent, longer in duration, and their one-on-one roles can be more physically and emotionally tolling. It is important that Medicaid rates—and in turn caregivers’ wages—are commensurate with the importance of the services delivered.”

Status 

The Raise the Wage Act (S 53) was introduced to the Senate on Jan. 26, 2021. It was referred to the Senate Health, Education, Labor and Pensions Committee. Cosponsors include Sen. Patty Murray and Reps. Bobby Scott, Pramila Jayapal and Stephanie Murphy.

Read more from David Totaro on this issue here.