Bronxite Jose Hernandez has been quadriplegic since he had a spinal cord injury in 1995. He relies on four different caregivers throughout the week to help him with tasks such as cleaning his apartment, eating, bathing and going to the bathroom.
He hired them through the state’s Consumer Directed Personal Assistance Program — a Medicaid program that some 200,000 New Yorkers rely on, and that has exploded in popularity in recent years. The program is meant to give patients flexibility in connecting with home health aides. Caregivers may be family or friends who receive training, rather than the licensed and certified professionals available through staffing agencies.
Gov. Kathy Hochul hopes to cut compensation for aides hired through the program, as part of a broader effort to shave upward of $1 billion off New York’s growing Medicaid budget. But some advocates say there are better ways to reduce home care spending without hitting workers’ wages.
Hernandez worries if Hochul succeeds with her proposal, it’ll be harder to hire the help he needs.
“Why would you come into my house, clean my house, clean my person and deal with my bowel and bladder care for less than what they’re paying you now?” Hernandez asked.
The bulk of home care in New York is paid for with public dollars through Medicaid. Under state law, home care workers receive a minimum base pay that’s slightly above the general minimum wage, as well as an hourly bonus that can be paid out in the form of cash, benefits or both. Hochul is seeking to cut the caregivers in Hernandez’s program out of that bonus. That means their minimum hourly rate would drop from $20.09 per hour this year to $19.10 next year.
At the same time, aides hired through traditional agencies would see their rates rise from at least $20.09 to $21.64, with the new minimum wage factored in.
Cuts to the program would save an estimated $200 million in fiscal year 2025 and twice as much the following year, according to Hochul’s executive budget. The governor is also seeking to save money on health care in other ways, such as reducing payments to Medicaid plans and cutting capital spending on nursing homes. She is asking lawmakers to help find an additional $400 million in cuts.
Hochul says long-term care for elderly and disabled New Yorkers is contributing to outsized growth in Medicaid spending that’s set to exceed statutory limits, in part because of the aging population. Medicaid, the joint state and federal program, pays for health care for some 7.6 million low-income New Yorkers.
The state share of the Medicaid budget is expected to make up about $35.5 billion of the state’s $233 billion budget in the coming fiscal year, even after the cuts to the home care program and other proposed savings.
Advocates and lawmakers pushed back on the proposed reductions at a joint Senate and Assembly hearing on the state health budget this week.
“Does this not make the health care workforce crisis worse?” state Sen. Gustavo Rivera asked Amir Bassiri, the state Medicaid director, at the hearing.
Bassiri countered that home care employment is on the rise. In New York City, employment in the sector dipped during the COVID-19 pandemic but has since rebounded, growing 30% overall since 2019.
A plan to save money by cutting out the middlemen
Some advocates and lawmakers are pushing an alternative proposal that they say could save far more money on home care without cutting caregivers’ wages.
Last month, Rivera and Assemblymember Amy Paulin introduced legislation proposing an alternative method of saving money on home care that involves a much bigger overhaul of the program. The bill, known as the Home Care Savings and Reinvestment Act, has divided stakeholders.
As it stands, New Yorkers on Medicaid who need home care are typically enrolled in managed long-term care plans, which are privately run health plans that receive public dollars to coordinate patient care and pay for their home care services. Patients were shifted onto those plans en masse during the Cuomo administration in an effort to improve health outcomes and save the state money. The state pays these plans a predetermined monthly fee for each member, regardless of the amount of services they use.
Previously, the state paid for the bulk of home care by directly reimbursing providers for their services — and advocates want to go back to a version of that model. They say the plans have become wasteful middlemen that could be cut out of the system.
In 2021, the long-term care plans posted $722 million in profits, which was twice the national average, according to state data cited by the Homecare Savings and Reinvestment Act.
The politically influential health care union 1199SEIU, which represents home care workers, supports the bill, as does a coalition of advocacy groups known as the New York Caring Majority. According to an analysis commissioned by 1199, the proposal could save some $3.5 billion annually by cutting out unnecessary administrative spending and any financial surpluses the health plans are generating.
Patient satisfaction with the plans is high, according to state data, but Hernandez, the man with the spinal cord injury, said he feels the money funneled through his plan would be better spent on boosting workers’ wages.
Some in the industry disagree.
Josh Klein is the CEO of Royal Care, a large home care provider serving New York City, Westchester and Long Island. He said managed long-term care plans are able to provide him with a range of data on the clients he serves and work with his company to try to reduce hospitalizations and falls, provide flu vaccinations and address other issues.
“It would be heartbreaking to take away all that work that they’ve accomplished,” Klein said.
Al Cardillo, president and CEO of the Home Care Association of New York State, also opposes the home care overhaul, saying the program can be reformed without “pulling the rug out” from the system. The state Health Plan Association, which represents some of the managed long-term care plans, is also resisting the move.
Hochul did not respond to a request for comment on the Home Care Savings and Reinvestment Act, or the criticism leveled against the cut to home care wages.
But her administration is taking other steps to try to reduce administrative spending on the private health plans that administer the Medicaid program by consolidating the number of plans on the market. This year, Hochul is seeking to have all of the plans compete for state contracts, and is proposing a 1% across-the-board reduction to their administrative funding.