Making Care Work Pay: How A Living Wage For LTSS Workers Benefits All

By Christian Weller, Beth Almeida, Marc A. Cohen, Robyn I. Stone: For Complete Post, Click Here…

The coronavirus pandemic exposed many deficiencies in the system our nation uses to support individuals who need long-term services and supports (LTSS). Chief among those deficiencies: the widespread staffing shortages that came to light as COVID-19 disproportionately affected individuals who rely on others to help them live with chronic illness or disability.

LTSS staffing shortages stem largely from the fact that our nation undervalues the 3.5 million nursing assistants, personal care aides, and home health aides who go to work each day in residential care settings and private homes across the country. Despite their valuable work, one in eight direct care workers lives in poverty, and three-quarters earn less than the average living wage in their states. 

It doesn’t have to be this way. New research from LeadingAge and the LeadingAge LTSS Center @UMass Boston shows that raising the pay of direct care workers by 15 percent—at a cost of $9.4 billion in 2022—would yield an impressive return on investment, including concrete benefits for a variety of stakeholders. Care recipients would receive more consistent and reliable care; workers would enjoy enhanced financial security; LTSS providers would see fewer staffing shortages, reduced turnover, and higher productivity; and local economies would expand as direct care workers increased their spending and depended less on government assistance to make ends meet.

A number of states, including ArkansasNew York, and Michigan, have already experienced the benefits associated with increasing pay for direct care workers. These states implemented pay increases, hazard pay, and bonuses for frontline workers through a temporary, 6.2 percent increase in federal Medicaid matching funds authorized in May 2020 by the CARES ActEighteen states applied the temporary payment increases to reimbursement for both nursing home and home care. Anecdotes from nursing home and home care providers suggest that the temporary payment increases, designed to help states combat staffing shortages in the health care sector during the coronavirus pandemic, have enhanced the ability of LTSS providers to retain existing frontline caregivers and recruit gap-filling staff.

Similar, but longer-term Medicaid reimbursement increases, along with other strategies implemented at the state and federal levels, could represent a down payment on a national strategy to value direct care workers appropriately and to provide workforce stability. These strategies include:

  • targeting Medicaid reimbursement rates to wages,
  • reforming the LTSS financing system, and
  • professionalizing the direct care workforce.

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