Proposed Minimum Wage to Cost Home Health $1.7 Billion

Health care associations are fighting back against a proposed $15 minimum wage that could cost hospitals, nursing homes and home health companies at least $2.9 billion annually.

The Healthcare Association of New York (HANY), which is composed of 500 not-for-profit and public hospitals, nursing homes, home care agencies and other health care organizations, testified during a budget hearing Monday in front of the Senate Finance and Assembly Ways and Means Committees to argue against the proposed 2016-2017 state budget. It hikes the minimum wage to $15 per hour and provides no subsidization to the health care system to cover the cost.

Other industries, including state workers and universities, would see increased funding under the current budget proposal from New York Governor Andrew Cuomo, but health care organizations say they would be disproportionately affected by a minimum wage jump.

“While understanding the need for hardworking New Yorkers to achieve a decent wage, we must also make sure health care providers receive adequate reimbursement so they can pay the higher salaries a minimum wage increase will create,” Greater New York Hospital Association President Kenneth Raske said during the testimony, The Journal News reported.

Several individual cities have already enacted measures to increase minimum wage levels to $15 per hour. The proposal in New York state could cripple the home health industry, which is still wrestling with budget constraints since the U.S. Department of Labor ruled that minimum wage and overtime protections must be extended to home care workers.

HANY argued that the state health care system cannot absorb a higher hourly minimum wage rate of $15, and the state’s home care industry would be hit the hardest. The projected costs to home care agencies alone would reach $1.7 billion annually. For hospitals, the proposal would cost $570 million, and $600 million for nursing homes.

The association urged lawmakers to boost aid to health care providers in the state in order to cover these additional expenses that typically cannot be passed onto consumers or patients.

Written by Amy Baxter