Home Care Agencies, Workers Split Over NY Wage Hike

Lawmakers in New York are currently at odds over a minimum wage hike, prompting health care workers in the state to take to the capital to urge action on the proposed increase to $15 an hour. But industry groups fear the uptick could be detrimental to home care agencies if the state doesn’t properly fund it.

The state Legislature remains split on Democratic Gov. Andrew Cuomo’s plan to raise the minimum wage over the next five years after recently releasing separate budget proposals, with the Republican-controlled Senate rejecting the wage hike and the Democratic-majority Assembly including it, along with $200 million to offset increased costs to employers in the first year.

Workers attending the rally at the capital earlier this week claim higher wages will provide the security they need for basic expenses, but some industry groups back the Senate’s move to exclude it from its budget proposal. Still other organizations like the New York State Association of Health Care Providers (HCP) support increased wages for home care employees, though they believe any plan’s implementation must be “responsibly funded.”

“As an industry primarily funded by Medicaid, home care agencies cannot absorb any additional wage mandates without the funding in place to support it,” HCP President Claudia Hammar said in a statement. “Years of spiraling costs, declining Medicaid reimbursements and unfulfilled promises of relief from the state have placed New York’s home care agencies in crisis, jeopardizing their financial viability and their ability to continue caring for the state’s most vulnerable populations within their homes.”

HCP represents more than 350 home care agencies across the state, primarily providing long-term home care services for elderly, disabled and chronically ill residents.

The phased-in minimum wage hike could begin as early as July 1, and would require $239 million from state and federal Medicaid to fund the increase for the home care industry alone in fiscal year 2016-17, according to HCP estimates. That number skyrockets to $755 million the following year.

But current pay makes it a struggle to afford bills and rent, Shirley Newsome, a home care worker in her 50s, told Crain’s New York. Her current pay of $10 an hour is even lower when clients are unexpectedly hospitalized or placed in a nursing home, she said.

Health care union 1199 SEIU applauded the inclusion of the wage hike and funds in the Assembly’s budget, and workers receiving higher pay could save the state money if they no longer qualify for Medicaid, said Helen Schaub, the New York state director of policy and legislation for the union.

Still, the funding falls short of what the increase will likely cost health care providers. While for some that’s a step in the right direction, others like the Home Care Association of New York (HCA) support the Senate’s exclusion of a wage increase.

“Though negotiations are ongoing, we appreciate the Senate’s recognition of the wage impact on home care and other sectors, and we urge its continued recognition of this impact in the next stages of negotiations,” Joanne Cunningham, President of HCA, said in a statement.

Written by Kourtney Liepelt