Minnesota is poised to become the first state to enact legislation establishing a board that will set minimum wages and benefits for nursing home workers.
The measure is the latest effort by states to help attract workers to post-acute care as demand for those services skyrockets from aging baby boomers.
The nursing home standards board was included in a comprehensive labor bill the Minnesota Legislature passed last week and is headed to Gov. Tim Walz (D) for his signature. Walz identified the bill as one of his priorities during the legislative session. The board would include nine members representing workers, nursing homes and state agencies.
Minnesota has approximately 25,300 nursing home workers and needs to attract another 18,000 to fill open positions, according to Care Providers of Minnesota, a nonprofit advocacy group. The average hourly wage for nursing home staff in Minnesota currently ranges from $19 an hour for nursing assistants to $35.80 an hour for registered nurses. That is on par with the national average for nursing homes, according to PayScale, a salary compensation platform.
Advocates for the Minnesota nursing home industry agree wages need to be higher for staff, but also argue the state has to come up with the funds to pay for such increases. Patty Cullen, president and CEO of Care Providers, criticized state lawmakers for not including additional Medicaid funding to the industry at a time when 12% of agencies recently polled by her organization said they are at risk of closing due to low reimbursements. “We’re going to have a mandate without a way to meet it,” Cullen said.
Erin Huppert, vice president of LeadingAge Minnesota, which represents nonprofit agency service agencies, fears unreasonable wage mandates combined with a minimum staffing mandate the Centers for Medicare and Medicaid Services is about to impose could “force nursing homes to make difficult choices,” including closing facilities.
The shortage of workers across the healthcare continuum has reached a crisis level in nearly every corner of the country. A number of states are addressing the issue in their 2023-2024 fiscal budgets.
On Thursday, Washington Gov. Jay Inslee (D) signed into law a $69 billion budget that increases Medicaid reimbursements to nursing homes by 15% or $293 million over the next two years. Two weeks ago, New York Gov. Kathy Hochul (D) signed a $229 billion budget that increases Medicaid reimbursement rates to nursing homes by 7.5%. Legislation mandating higher wages for both nursing home workers and home health workers is pending in Ohio and Massachusetts.
Wins at state houses for post-acute care workers are also wins for labor unions that have been courting the mostly unorganized industry by lobbying for better wages. Last summer, the Service Employees International Union, which represents 66,000 of the nation’s 3 million nursing home workers, launched a coast-to-coast campaign to improve pay, benefits and staffing at skilled nursing facilities.
Massachusetts, Washington and Minnesota are among the states the SEIU and its local chapters targeted for better caregiver wages. The union’s national president, Mary Kay Henry, called the legislation in Minnesota creating the nursing home standards board “a significant step in easing the workforce crisis in our healthcare system.”