Economic Policy # 117

A Needed Boost for Home Health Care Workers If Biden’s American Jobs Plan Passes Congress.  

By Lily Lady Cook  

May 26, 2021

Summary: President Biden’s $2 trillion American Jobs Plan (AJP) will allot about $400 billion towards the caregiving workforce. In particular, funds will be allocated towards home health care workers, who provide services that run the gamut from short-term nursing care to longer-term daily visits. Many home health care workers are women, immigrants, or people of color. About 40% are on SNAP or Medicaid; their median hourly wage in 2020 was $13 with an average annual salary of $27,080.

Before the AJP was announced this spring, Biden tweeted about the state of inadequate compensation for home health care workers. He promised to give them a raise and decried their current situation as unacceptable. The pandemic—coupled with an aging population in America—has underscored the need for improvements in palliative care; according to the U.S. Census Bureau, by 2034, older adults will outnumber children under 18 by a factor of one million. Among the leading contributors to this trend are higher life expectancy rates and individuals having fewer kids. Furthermore, since baby boomers were one of the largest generations, their overall advancing age puts greater pressure on an already-strapped caregiving economy.

The future of the AJP hinges on a congressional battle, already underway with the Senate Republicans’ initial counter offer of a  $568 billion infrastructure plan. Primarily, the Republicans are concerned with mitigating corporate tax hikes and paring down the climate-related components of AJP.  While the Biden administration came back with a rejoinder of $1.7 trillion, this back-and-forth is not the only path forward. A senate reconciliation—as one omnibus bill or two smaller packages—could be used by democrats alone to pass the entire AJP, or to tack on elements that Republicans do not agree upon.

Analysis: It comes as no surprise that there is an insufficient supply of home health care workers, given their relatively low earning potential and how grueling the job can be. There is a  list of 800,000 patients waiting for home services. Pandemic-related disinclination to enter nursing homes has certainly led to an increased demand for home care.

The AJP will expand services under existing Medicaid infrastructure, to ultimately support a higher quality of life for home health care workers. Moreover, the AJP proposes an expansion of the Money Follows the Person (MFP) program that permits some Medicaid users to easily move from nursing homes back into their homes.

Most voters (65%, according to a Morning Consult/Politico poll) support raising corporate taxes to fund the AJP. But since Senate Republicans don’t always follow popular sentiment, it remains to be seen how the deliberations will pan out.

More specific changes should be made to improve the home health care worker experience, but it’s unlikely they will be addressed with a simple Medicaid expansion. For one thing, the wage capture of many agencies can count for more than half the cost to the client. This means that if the client pays $35 an hour to employ a home health care worker, the agency that directly employs the worker may see more than half.

Additionally, changes could be made to federalize the ability for independent contractors to collectively bargain through organizations of home care workers. With an outwardly pro-union leader in office, perhaps this will happen in the near term, and has already begun on the state level. Illinois, California and Minnesota already have existing groups to serve this purpose; unsurprisingly,  home health care workers in those states all earn more than $15 an hour.

Although it’s no panacea, the AJP will affect the material circumstances of home health care workers in America. Just how drastic these changes will be depends on the outcome of congressional deliberations and whether there is a continued advocacy for additional  legislation.

This additional legislation could cover the issues left unaddressed in the AJP, chief among them states without union representation for home health care workers. Federalizing a livable minimum wage and improving retirement benefits could also be the subject of subsequent bills. Finally, the swaths of middle-class families that need home care but do not qualify for Medicaid will certainly be another issue that lingers even if the AJP is passed in its entirety.


Engagement Resources:

Donate to Charity Hospice, a non-profit that serves hospice patients in the Ohio area. Its mission is to serve patients who couldn’t otherwise afford to cover the costs related to a home aide or assisted living facility.

Contact your Congressperson: Let the person who represents your state in Congress know that passing the American Jobs Plan with as much of the initial budget intact is important.


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