What Are States Doing With New Federal Funding For Medicaid Home-Based Long-Term Care?

What would you do if the federal authorities gave you a bit of $12 billion to spend on Medicaid home and community-based care for frail older adults and youthful folks with disabilities? That could be a actual query governors have been wrestling for months.

And we now are getting a superb sense of the reply: Principally, they are going to spend the windfall on one-time bonuses for house care staff.

When Congress handed the American Rescue Plan final March, it elevated the federal contribution to Medicaid’s house and neighborhood based mostly care program by 10 p.c or about $12 billion. States have a couple of years to spend the cash however should first get approval from the Facilities for Medicare and Medicaid Companies (CMS). The company has given states broad leeway so long as the brand new spending enhances house and neighborhood based mostly providers (HCBS) and provides to, however doesn’t substitute, current state funding.  

A number of makes use of

The states have proposed a variety of makes use of for the funds. No less than 21 are growing or increasing applications to support family caregivers. No less than 27 would use the brand new funds to enhance high quality measures for home-based care and implement supply system reforms. The Middle on Finances and Coverage Priorities summarizes the state initiatives here.  The non-profit group ADvancingStates has its personal abstract here.

A number of states wished to make use of some additional funding to supply housing for Medicaid HCBS members. However CMS turned down lots of these requests. Present legislation makes it troublesome to make use of Medicaid funds for rental help, aside from transitional housing.  

Whereas most states proposed a number of makes use of for the cash, rising compensation for house care staff appears to be on the prime of most want lists.

Employee bonuses

California, for instance, would give $500 in one-time funds to direct care staff. Iowa needs to supply as much as $2,500 per employee in wage will increase and incentive funds. Maine has proposed paying $1,000 bonuses to present direct care staff and hiring incentives of as much as $1,500 for brand spanking new staff.

Solely a handful of states, together with Mississippi, Nebraska, and Oklahoma, haven’t proposed utilizing among the further federal funds to spice up employee pay. The Nationwide Academy for State Well being Coverage has a pleasant state-by-state summary here.

Utilizing the {dollars} to spice up employee pay is comprehensible. Proper now, each the well being and long-term care programs face a desperate shortage of workers in all settings. Extra pay received’t remedy the issue however it might not less than assist entice some staff.

Few need to do care work

A new study by the advocacy and analysis group PHI and the College of California, San Francisco describes the depth of the issue. It discovered that within the first three months of the pandemic 153,000 care staff misplaced their jobs however {that a} 12 months later fewer than 15,000, or about 9 p.c, returned to the direct care workforce. Nearly none returned to their prior employers.

Of the 7 million low-wage staff who misplaced their jobs on the onset of the pandemic, many had returned to work by final March. However virtually none took direct care jobs: “An immeasurably small variety of displaced staff from different occupations re-entered the workforce right into a direct care job,” the examine concluded. General, low-wage staff who did discover new jobs had been extra prone to get work in occupations that paid extra and had been extra prone to supply full-time employment.  

Congressional backers of the funding bump and the Biden Administration hoped states would use the cash to develop extra elementary reforms of their Medicaid house care applications. However state officers inform me that the non permanent nature of the funding made that impractical.

One-time cash

For example, as a result of the additional federal funding is one-time cash, states are reluctant to face up new applications they could must shutter in a 12 months or two. Equally, they appear unwilling to develop Medicaid long-term care, fearing they’d must kick folks off this system when the additional federal {dollars} run out. And practically the entire employee pay will increase are described as bonuses quite than will increase in hourly wages, implying they might not be sustained both.

Congress is at the moment debating a multi-year improve in federal Medicaid HCBS funds. Lawmakers are  prone to reduce President Biden’s plan for a $400 billion increase over eight years. However any type of further multi-year funding could be welcomed by the states and will result in extra of the sort of structural reforms Biden and congressional Democrats want to see.

The state response to the additional one-year funding tells us two issues: Greater pay and different incentives for care staff is Medicaid HCBS’s most urgent want. And Congress shouldn’t count on a lot elementary reforms till states obtain a longer-term dedication for extra federal funding.