Before President Joe Biden was sworn in on Wednesday, he had already unveiled plans for another massive stimulus package, one that could help home-based care providers in some ways — and hurt them in others.
Under the new president’s “American Rescue Plan,” for instance, there would be $400 billion put forth to increase COVID-19 testing and the speed at which vaccines are distributed. That, along with $350 billion for state and local governments, would be generally helpful for home-based care providers.
At the same time, unemployment benefit add-ons and a federal minimum wage hike could potentially bring even more trouble to a historically tumultuous staffing environment. Many home-based care operators support paying their workers more, but most can’t afford to do so without a corresponding reimbursement increase.
At the beginning of the public health emergency, the $600 unemployment benefit add-on placed a massive burden on agencies trying to keep their staff at work during an especially trying time. Home health aides and caregivers saw an opportunity to avoid risk and stay home with their families — and maybe even make more money than usual while doing so.
The last spending bill, instituted a few weeks ago, has put a $300-per-week add-on in place. That is set to expire in March, but it could be replaced with the higher $400-per-week provision in Biden’s plan.
“It depends on how quickly Congress can get a bill drafted and then to the floor for a vote,” Scott Fidel, an analyst for the financial services firm Stephens Inc., told Home Health Care News in an email. “[But] we could envision these provisions relating to unemployment in Biden’s COVID plan targeted to kick in as the prior enhanced benefits are set to expire in March.”
After the initial $600-per-week add-on was in place, it took a while for many agencies to get enough workers back that had left. Another boost to unemployment benefits could jeopardize retention again.
“We’ve been trying to rebound ever since May,” Mitch Markowitz, the VP of business development at Family & Nursing Care, told HHCN in December. “And it’s been very, very slow incremental growth. That’s mostly because those caregivers, once they’re gone, they’re gone.”
Silver Spring, Maryland-based Family & Nursing Care is a private-pay home care company.
In spring, some caregivers opted for unemployment to earn money without exposing themselves or their families to the virus.
But the environment is far different now. Thanks to more widely available personal protective equipment (PPE), better screening protocols and early access to COVID-19 vaccines, there is less uncertainty surrounding the virus in the home-based care world.
“The Biden package could certainly create some incremental headwinds for home-based care staffing, as we saw in the summer months last year after the first iteration of the CARES Act implemented the $600-per-week unemployment assistance,” Fidel said. “However, we would not expect the staffing challenges to not be as significant as what we saw last year following the CARES Act.”
When it comes to vaccines, Biden’s team is hoping to inoculate 100 million Americans in the administration’s first 100 days.
The American Rescue Plan’s concerted effort to increase vaccine distribution and testing could further reduce uncertainty and concern.
“If the vaccine program is able to accelerate from its initial rocky implementation and the economy also continues to recover, we think workers will be more inclined to join the labor pool as compared to taking the unemployment benefits,” Fidel said.
Minimum wage hike
Another Biden proposal that could affect home care and home health agencies is a mandated $15-per-hour minimum wage.
According to the U.S. Bureau of Labor Statistics, the 2019 median pay for home health and personal care aides was $12.15 an hour.
In general, Biden’s transition team has emphasized the importance of helping direct-care workers earn higher wages. The administration’s health care plan, which is included on its official website, explicitly sites home care.
“The Biden Administration will partner with health care workers and accelerate the testing and deployment of innovative solutions that improve quality of care and increase wages for low-wage health care workers, like home care workers,” the plan reads.
The minimum wage increase, however, is one of the aspects of the plan that still has a long way to go until implementation.
“While the $15 minimum wage hike at the federal level would likely present additional wage and margin pressures for home-based care providers — especially in lower-wage personal care — this proposal will be a tougher sell from a bipartisan perspective and will still likely face a rocky legislative pathway for approval, even with the Democrats nominally in control of both the House and Senate,” Fidel said.