REPORT: The High Cost of Low Wages

The Consumer Directed Personal Assistance Association of New York State (CDPAANYS) conducted a statewide survey to determine the extent of the workforce crisis and its impact on both those who rely on the program and those employed by it. The data confirms that consumers are struggling to recruit and retain PAs because workers are unable to provide for basic living expenses on the wages being offered in this state Medicaid program.

Click here to view the full report
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The findings are telling:

  • Twelve percent of respondents said it took longer than six months to hire a worker. Five percent of those indicated it took longer than a year.
  • One-quarter of CDPA consumers reported supplementing the wage paid by the Medicaid program because they could not attract or keep workers at the wage offered.
  • Over half of the workers who quit did so because of low wages. Two-thirds of those who quit did so because of either low wages or too few hours, indicating that consumers with low hours are particularly impacted by the low wages.
  • One-third of respondents indicated that their workers had never received a raise. Another 20% indicated that wages had decreased.
  • Nearly three out of every five personal assistants request a pay raise either sometimes or frequently.

Because CDPA is a Medicaid only program, wages are a direct result of reimbursement. FIs traditionally have a 10% administrative rate, meaning $0.90 of every dollar the agency receives goes to wages or legally required expenses such as workers compensation, payroll taxes or unemployment insurance. Traditional home care agencies are allowed administrative costs up to 28%.

Therefore, solving this problem requires additional reimbursement and new rules on managed care plans that require sufficient reimbursement to providers in order to pay adequate wages. To that end, CDPAANYS has joined the Real Lives, Real Jobs campaign, which is looking to solve the workforce crisis in home care and CDPA (www.reallivesrealjobs.com).

To do so, the campaign recommends that the State:

  • Raise and fund the wage of personal assistants to at least the fast food minimum wage by October 1, 2017;
  • Create a high need community based rate cell to ensure that the rates received by managed care plans is sufficient to pay for those who need the most services and ensure there are standards in place to make sure those funds get to FIs and workers; and
  • Create a Stakeholder Workgroup c0-chaired by the Department of Health and the Department of Labor to examine the necessary wages and other forms of compensation that will resolve the workforce crisis in CDPA and home care.

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