The minimum wage for home health care aides – some of the lowest-paid caregivers in the state – is in line to increase by $3 an hour over the next two years.
Front-line health care workers making less than $125,000 a year would see a bonus of up to $3,000.
And human services providers, such as Buffalo-based People Inc., are primed to get their first cost-of-living adjustment in a decade-plus, which will help boost wages for employees supporting those with developmental disabilities.
Also, a pot of funds to fuel health care capital projects will be reloaded with $1.6 billion.
Those are among the highlights of major health care provisions included within final bills introduced Friday as part of the 2022-23 New York State budget, expected to come in at around $220 billion.
Many industry players and trade groups kept their comments to themselves Friday as they combed through hundreds of pages of paperwork. The state Assembly and Senate passed the health bill that included funding for human services providers, health care projects and a 1% Medicaid rate increase, but they hadn’t yet voted as of 6 p.m. Friday on a separate bill that included home care wages and health care worker bonuses.
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“This budget makes significant investments to protect the well-being of New Yorkers, notably a meaningful pay raise for front-line home care workers and increased funding for safety-net hospitals,” said George Gresham, president of a major labor union, 1199SEIU United Healthcare Workers East. “These priorities are necessary to strengthen a health care system and caregiver workforce that has been stretched to its limit in recent years.”
A pay raise for home care aides was among the most watched of the health care budget issues.
Advocates had called for home care aides to be paid 150% of the regional minimum wage. In Western New York, that would have meant a jump to $19.80 an hour.
The increase will come in lower, it appears. The bill language calls for the minimum wage for a home care aide to increase by $2 an hour Oct. 1, followed by an additional $1 increase a year later on Oct. 1, 2023.
The initiatives, Gov. Kathy Hochul said, are geared toward bolstering the state’s exhausted health care workforce, which continues to lose employees to retirement, resignations or higher-paid travel positions.
That indicates a local home care aide making minimum wage would see an increase to $15.20 an hour later this year and then $16.20 a year later.
In a news conference Thursday, Gov. Kathy Hochul indicated the combined wage increase would cost nearly $7.4 billion.
Hochul also said the state will spend $1.2 billion for health care worker bonuses, geared toward attracting and retaining employees.
The formula detailed in bill language is complicated, but the bottom line is a wide swath of employees who provide “hands-on health or care services to individuals” and make less than $125,000 annually are primed to get bonus payments of up to $3,000 each.
Employees who have worked an average of between 20 and 30 hours weekly “over the course of a vesting period” would get a $500 bonus. That bonus would be $1,000 for those at 30-35 hours a week, and $1,500 for those over 35 hours weekly.
Employees can get bonuses for “no more than two vesting periods per employer,” not to exceed a total of $3,000 each. That means eligible employees who get bonuses for two vesting periods will see somewhere between $1,000 and $3,000.
A boost for human service providers
The budget will provide a 5.4% cost-of-living adjustment to human services providers this fiscal year, amounting to about $500 million, according to the health budget bill.
That will provide a boost to providers such as People Inc., the Buffalo-based health and human services agency that employs more than 4,000 people from Buffalo to Rochester.
The cost-of-living adjustment has been a long time coming, said People Inc. President and CEO Rhonda Frederick.
“We haven’t had a cost-of-living adjustment in almost 11 years,” she said. “Obviously, things have changed pretty significantly in 11 years, both on the staffing side and recruiting and retaining staff, as well as expenses to organizations.”
The Assembly, in its proposal last month, had pitched an even larger increase of 11%, but the health budget bill ultimately reflected Hochul’s proposal unveiled in January of 5.4%.
What the boost will do, most significantly, is allow providers such as People Inc. to offer more competitive wages to staff, in an effort to address workforce recruitment and retention issues.
Frederick said about 90% of the agency’s revenue is public money funneled through Albany, which has made it difficult to keep up with the costs of doing business. Still, People Inc. was able to announce in May that it was increasing its starting wage for employees providing direct support to people with disabilities to $15 an hour.
The adjustment from the state should allow them to increase that further, which could reduce turnover in direct support professional roles where consistency and relationship building is a crucial part of the job.
“This would so help people be able to stay here,” said Frederick, who began her career at People Inc. in 1980 in an entry-level direct support position. “People come here, they love their job, they love what they do. But they have to be able to live, they have to be able to pay their rent and put food on the table.
“We’ve got to recognize their value.”
The health budget bill also includes a 1% across-the-board increase to Medicaid rates – consistent with Hochul’s proposal announced in January.
Trade groups representing hospitals and nursing homes, such as LeadingAge New York and Healthcare Association of New York State, had called for a larger increase, arguing nursing homes, in particular, need a significant reimbursement to raise wages and compete for a limited supply of health care workers.
The mandate, passed last year by the state Legislature and signed by then-Gov. Andrew Cuomo in an effort to address understaffing in nursing homes, was originally scheduled to go into effect Jan. 1, but it was delayed amid staffing challenges that worsened during the Omicron surge.
They pushed that argument even harder after a long-awaited law requiring minimum staffing ratios in New York’s nursing homes went into effect April 1.
Health care capital funds
The Legislature also agreed with Hochul in authorizing a fourth round of grants within the Statewide Health Care Facility Transformation Program, totaling $1.6 billion.
The largest part of that is $750 million in grants for projects centered around “innovative, patient-centered models of care,” increasing access to care, improving care quality and ensuring health care provider financial sustainability. At least $75 million of that – $25 million each – must to go community-based health care providers, mental health clinics and residential care or adult care facilities.
The governor’s budget proposes making $1.6 billion available to fund capital improvements for health care facilities and nursing homes, as well as to build out ambulatory care infrastructure for struggling hospitals.
Another major chunk: up to $200 million for grants to providers “for purposes of modernization of an emergency department of regional significance.” The bill defines that as: a Level 1 trauma center with the highest volume in its region that has the capacity to separate patients with communicable disease, trauma or behavioral health issues from emergency department patients and also provides training in emergency and trauma care to residents from multiple regional hospitals. Lastly, a health care provider eligible for that pot of funds must serve a high proportion of Medicaid patients.
Erie County Medical Center will be eligible based on that definition, hospital spokesperson Peter Cutler confirmed.