New York Gov. Andrew Cuomo's plan to gradually raise New York's minimum wage could push some home healthcare agencies into bankruptcy, the providers say. The increase, they argue, would undermine efforts to reduce medical costs for the elderly and disabled by keeping them in their own apartments and out of nursing homes.
Home health aides typically earn about $10 an hour in New York City, and are among the workers who would benefit most from a $15 minimum wage.
But agencies have been struggling for years with unfunded wage mandates and reduced reimbursement rates from Medicaid and Medicare. About 70% of home health agencies reported operating losses for 2013 in a survey by the Home Care Association of New York State. The industry group warned that the minimum-wage hike would result in bankruptcies and reduced services if the state budget doesn't cover the higher labor costs.
The group estimated that providers would face $1.1 billion in increased costs in the first two years, and $2.19 billion once the minimum wage reaches $15 statewide, in 2021. Healthcare union 1199 SEIU said trade groups' cost estimates are overstated because they account for the increased wages of supervisors as well as the lowest-paid workers.
The Cuomo administration insists it's premature to talk about reimbursing providers for a $15 minimum wage before one is even enacted. But home care providers are still waiting for a 34-cents-an-hour boost in funds promised to cover the industry's last wage mandate, which went into effect in October.