More than 400,000 seniors and medically fragile individuals in Pennsylvania rely on home care – but caregivers and nurses are leaving the industry at an alarming rate to work in neighboring states or settings that offer more competitive wages.

The Pennsylvania Homecare Association (PHA) attributes this trend to the state’s average reimbursement rate for these services.

In Pennsylvania, the average hourly wage for home care workers, including home health aides and personal care assistants, typically ranges from $14 to $18. Neighboring states Delaware, Maryland and New Jersey pay 25% to 75% more.

Pennsylvania’s home care reimbursement rate is $20.63 per hour. Although this rate is intended to cover agency overhead and worker wages, it fails to meet the industry’s actual needs, according to PHA.

Consequently, more than 112,500 home care shifts go unfilled each month in the state, primarily due to staffing shortages, according to PHA. Care recipients often go without necessary services, leading, in some cases, to preventable hospitalizations or admissions to nursing facilities – costly outcomes for both the individuals receiving care and taxpayers.

In early 2024, Governor Josh Shapiro’s administration commissioned a study of reimbursement rates for home and community-based services (HCBS). The study recommended a 23% increase in reimbursement for personal assistant services within the Office of Long-Term Living to support direct care worker wages and the costs of care oversight and delivery.

The study found that stagnant reimbursement rates necessitate significant investments in programs to ensure the health and safety of those who need care in Pennsylvania, which advocates had been saying for years.

“This rate study reaffirms what we have maintained all along,” Mia Haney, CEO of PHA, said in a press release. “Pennsylvania must make major investments in the state budget to raise reimbursement rates for direct care workers and protect access to critical home care services for the aging and disabled populations in the state.”

Haney further noted that Pennsylvania falls short in its support for its aging population compared to national standards and similar programs within the state.

Budget proposal fails to meet expectations

Stakeholders have long urged Pennsylvania’s elected officials to invest more in the home care workforce.

In February, PHA expressed disappointment that Governor Josh Shapiro’s proposed budget included a funding increase for only 6% of home care workers in the participant-directed service model, in which recipients self-manage their caregivers.

Specifically, the budget allocates $21 million to increase direct care worker wages for “those who provide services to adults with physical disabilities and seniors in the participant-directed model through Community HealthChoices.”

This proposal neglected to consider more than 270,000 direct care workers who provide the same essential services through agencies, and thousands of nurses delivering shift nursing services to adults and children with medically complex needs, according to PHA.

“PHA members across the state are genuinely and gravely concerned,” Haney said. “An increase that completely ignores 94% of the workforce fails to acknowledge the crisis our members experience every day.”

Garry Pezzano, president and CEO of LeadingAge PA, a nonprofit senior services advocacy group, agreed with Haney’s concern.

“Sadly, the underlying system is broken, with providers facing uncertain funding year after year,” Pezzano said in a statement. “Despite critical investments in recent years, costs of care have continued to skyrocket, and the workforce shortage has no end in sight. As a result, access to care remains under threat and aging services providers are being forced to sell or outright close. In addition, lack of predictable and sustainable funding does not position the commonwealth to leverage the Living Independence for the Elderly program, a proven, innovative model, to its full potential.”

Pennsylvania’s Living Independence for the Elderly (LIFE) program, also nationally recognized as the Program for All-Inclusive Care for the Elderly (PACE) offers health and support services, alternatives to managed care options, coordinated care, social engagement, physician and specialty services, personal assistance, nutritional support, transportation and more. Without sufficient reimbursement, these programs are also at risk, highlighting the need for a reliable rate-setting process, according to LeadingAge PA.

However, Valerie Arkoosh, Health and Human Services Secretary, said in a budget hearing the first week of March that the state lacks sufficient funds to boost rates across the board. Instead, the administration chose to increase rates for roughly 8,500 direct-care providers, because they often lack the benefits of working for an agency.

“Given what’s a very tight budget year this year and the size of the potential cost to the general fund for increases in the other areas, we decided to start with the direct-care workers in the participant-directed program,” she told lawmakers.

According to Arkoosh, the $21 million state increase will unlock an additional $26 million in federal funds, which will help provide wage increases and paid leave.

“In the last decade, reimbursement rates have only increased by $1.91 per hour,” Haney explained. “Providers have stretched their funds to the limit. Failure to take action to raise these rates will jeopardize the quality of care for our residents, risk the health and safety of our friends and neighbors, and further limit the compensation that can be offered to more than 200,000 direct-care workers across the state.”

PHA called for a $550 million raise to the Medicaid reimbursement rates, bringing it to $25.42 per hour. This would enable agencies to provide competitive wages and help stabilize the struggling home care industry, according to PHA.

“As we’ve said before, Pennsylvania has the opportunity to create a national model for how we care and support older adults, demonstrating that no one does it better than the Keystone State,” Pezzano said. “However, this can only happen if we fully commit to confronting this challenge head on and collaborate on sustainable solutions.”

Possible requirement changes for direct care workers

In hopes of finding an alternative solution to address the workforce crisis, Senator Dave Argall (R-Pennsylvania) introduced Senate Bill 115 in January, which would amend the act of June 13, 1967, known as the Human Services Code. This proposed amendment provides “skills competency examination opportunities to individuals seeking employment as a direct caregiver in lieu of successfully obtaining a high school diploma or general education (GED) equivalency.” While not directly pertaining to home care workers, the bill shows legislative attention on the issue of the direct care workforce.

Under Pennsylvania law, direct care work requires a high school diploma or equivalent GED certificate or completion of a nurse’s aide program, which teaches basic nursing assistant skills.

State law also requires workers to be older than 18 and free from certain medical conditions, including drug or alcohol addiction.

According to the bill, in addition to the duties required of a direct care staff member, the exam will include an assessment of interpersonal communication skills, basic writing and reading comprehension, understanding of cultural and diverse communities, awareness of mental and behavioral health needs, and other competencies specific to working in a personal care home or assisted living residence.

The Department of Human Services would administer this exam; however, the bill doesn’t specify how the exam would be administered, who would create it, or the topics that it would cover.

While some caregiver advocates have supported the bill’s intent, others argue that increasing wages would be a more direct solution and that workforce issues cannot be solved without increases.