State Court Ruling, Rising Labor Costs Force Price of Employing Home Health Aides to Go Up
JAMAICA ESTATES, NY — Attorney Tanya Hobson-Williams of Hobson-Williams, P.C. says the state court’s ruling on paying caregivers working 24-hour shifts and inflated labor costs as a result of higher minimum wages and overtime guarantees are placing a greater financial burden on families and suggests that families look for alternative ways to pay for long-term care.
The New York State Court of Appeals recently upheld an April 11 ruling by the New York State Supreme Court that caregivers who work 24-hour shifts should be paid the full shift, including for meals and eight hours of sleep. This decision does away with a statewide practice allowed by the Department of Labor in which caregivers were only paid 13 hours of their shifts.
“This decision, unless overturned on appeal, will definitely affect the home care services industry,” Ms. Hobson-Williams says. “For those families who privately pay for home care services, their out-of-pocket costs will double.”
Managed long-term care agencies, Ms. Hobson-Williams says, are already reimbursed by Medicaid at a capitated (or fixed) rate, regardless of the number of hours a home care worker works. But with higher labor costs, Medicaid may not be willing to reimburse these agencies for the increased costs. “Medicaid may scrutinize and deny more applications, even for the smallest errors,” she says. “Also, there have been reports that managed long-term care agencies are not taking new cases, presumably because of the court ruling.”
Families will feel more of a squeeze as the cost of providing a caregiver of an elderly or chronically ill loved one has gone up. According to Genworth Financial’s Cost of Care Survey, the median annual cost of a home health aide in New York State this year is $54,340, with an annual growth rate of 2% over the last five years. In Queens County, the annual cost is $46,904, and an annual growth rate of 3% over the same time period. Genworth predicts, in the next five years, the statewide annual median cost will jump to $62,995 and Queens County residents will pay $54,375 a year just to keep their loved ones in their homes.
“There has been a lack of home health care aides in the job market, which has resulted in these price increases,” Ms. Hobson-Williams said. “Labor costs have also skyrocketed, which means families who are paying someone to care for their loved one will have to pay more.”
A separate survey by Genworth conducted in conjunction with the Cost of Care survey showed that two-thirds of all respondents believe the federal government will cover all or part of their long-term care expenses. “What people do not know is that Medicaid has income restrictions when paying for care and Medicare does not pay for home care if that person does not need skilled nursing care,” Ms. Hobson-Williams says.
Ms. Hobson-Williams suggests that family members should take out long-term care policies or life insurance policies with a long-term care rider. “These are good options, provided they are obtained by, at least, the age of 50,” she said. “That way, you are covered and you will be paying lower premiums.”
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