New York’s Proposed Minimum Wage Increase May Hurt the Home Health Care Industry in the State

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Currently, many of New York’s private home care agencies claim that they are stretched to their limit fiscally and that any mandatory increase in minimum wages is going to have a significant and negative impact on their bottom line revenue, forcing some to potentially operate ‘in the red’ (at a loss) and that will affect their ability to remain in business, providing services to those in need.

One industry group claims that a proposed minimum wage increase to $15 per hour will cost the industry $2.2 billion extra once the measure is fully implemented, which would occur by 2021, if passed. This doesn’t mean the industry is against raising the minimum wage, though, as long as the State also boosts the level of Medicaid reimbursement it currently offers to help offset that increase.

One of the most significant arguments from many agencies and the industry as a whole regards the nature of financial reimbursement and earnings for these agencies. Whereas the private sector, like fast food, can raise their prices to offset the increased cost of wages, these agencies rely on state disbursed Medicaid reimbursement payments for hospice, in home personal care, and other services elderly and disabled adults rely upon.

Governor Cuomo’s administration is attempting to dispel these concerns, stating that it’s too early to truly understand how the raises would affect the industry since the plan isn’t even formally written yet.

Kenneth Lovett, writing for the New York Daily News in the article, Cuomo’s proposal to raise minimum wage could cost state’s home health care agencies an extra $2.2B, states:

“A Cuomo administration aide said discussions on the impact on the health care agencies is “premature” since a final plan for a minimum wage hike has not been agreed upon.

“The initial costs of the proposed minimum wage increase are expected to be relatively modest due to the multi-year phase-in schedule to $15,” the aide said. “We certainly understand the issues being raised by the state’s nonprofit partners and we are sensitive to their concerns.”

New York isn’t the only state in the Union that’s grappling with this issue as other states, cities, and regions have been focusing on boosting minimum wage requirements. The key question here regards one of the most populous states in the country and a high number of adults who rely on these services. As the proposals are worked on, it’s expected that industry experts and analysts will continue to fine tune their estimations.

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