Expanding Home Care Options in Maryland

Paying Independent Home Care Aides Appropriately Would Bring Real Benefits at an Affordable Price

Introduction and Summary

Home care aides provide vital care to thousands of Marylanders who have difficulty with daily tasks because of their age, a disability, or a health condition. These workers help their clients with a wide variety of critical daily tasks, such as bathing, dressing, and eating. This care enables many to remain in their homes rather than moving to a nursing home or other institution.

As Maryland’s population ages, home care is likely to become increasingly important for the health of older Marylanders and people with disabilities, as well as for our state economy. Because Medicaid pays for more than half of all home care services delivered nationwide, state policies have an important role in determining the kind and quality of home care services available.

Unfortunately, Maryland recently limited the ways aging adults and Marylanders with disabilities can obtain Medicaid-funded home care services by canceling its independent provider program. This program allowed people who receive home care services to exercise a significant degree of control over their own care, and canceling it is likely to harm both Medicaid participants and home care aides. Although the state initially projected that this program would become dramatically more costly as a result of changes in federal labor regulations, an analysis by the Maryland Center on Economic Policy shows that these costs would be relatively small. To ensure quality care for older Marylanders and Marylanders with disabilities, the state should reinstate the independent provider program.

Context

For many years home care aides were denied federal minimum wage and overtime protections because of regulations based on an antiquated misinterpretation of labor laws. As a result, many home care aides struggle to afford basic necessities despite working long hours, leading to fatigue and high turnover. This has the potential to jeopardize the quality of care these aides are able to provide.

Regulations from the U.S. Department of Labor that went into effect in 2015 mean that Maryland has an opportunity to improve living standards for the state’s home care aides and improve services for older adults and people with disabilities by embracing both the spirit and letter of the Fair Labor Standards Act (FLSA). The revised rules clarify the proper application of certain exemptions that historically excluded many home care aides from standard wage and overtime protections. For the first time, it is clear that home care aides, like other hourly employees, are entitled to minimum wage and overtime pay under federal law. Moreover, the state, when its Medicaid agency acts as an employer, is responsible for ensuring these aides are paid for time they spend traveling between clients. The state should seize this opportunity to improve its Medicaid-funded home care programs to ensure better pay for home care aides and quality care for Medicaid participants.

These Department of Labor’s rules have three main impacts. Extending minimum wage and overtime protections to the nation’s 2 million home care aides—a workforce largely consisting of women of color^[1]—will help these aides make ends meet and allow them to spend more time with their families. The rules are also likely to improve the quality of care clients receive by reducing turnover and improving morale among home care aides. The rules also mean that Maryland and other states must ensure all home care aides employed by state Medicaid agencies are paid properly. Because Medicaid pays for more than half of all home care services delivered nationwide,^[2] effective state implementation is essential to ensure that aides and Medicaid participants see the benefits of the revised rules.

To date, Maryland has taken an imperfect approach to implementing the new rule. Rather than recognize its employer responsibilities and budget the money needed to allow the state Department of Health and Mental Hygiene to pay home care aides fully and appropriately for the care they provide to Medicaid recipients, Maryland sought to distance itself from its obligations to home care aides. It did so by terminating the independent provider program through which it had previously paid some home care aides and requiring those serving Medicaid participants to seek employment with private home care agencies. Since this sudden change in 2015, the state no longer pays the home care aides directly for their work. Rather, it now reimburses the home care agencies, as the new employers of the home care aides, for the work their employees provide.

This policy decision likely had negative consequences for Medicaid participants in Maryland. While the goal was to shift responsibility for complying with federal law onto private employers, people receiving home care services through agencies generally have limited control over those services. Research shows that participants in self-directed home care services like Maryland’s previous independent provider program often use more of the services they need and are entitled to, and can experience better outcomes as a result.[3] The state’s decision to eliminate the option for self-directed care may make it harder for some Medicaid participants to adequately meet their needs through home care, and in some cases could make it harder for them to continue living at home.

Findings and Recommendation

To ensure that older adults and people with disabilities in Maryland have access to a variety of care options to meet their specific needs, the state should reinstate its independent provider home care program, in which participants could design their own plan of care in consultation with the state. This would require budgeting enough money to pay aides for overtime as well as time spent traveling between clients when necessary, but these costs would be reasonable. A MDCEP analysis using data obtained from the state Department of Health and Mental Hygiene found that the state’s share of overtime and travel costs would total $3.3 million, or about 0.1 percent of current state Medicaid spending.^[4] This modest investment would promote better care options for Marylanders who rely on Medicaid-funded services to stay in their homes and a better employment options for the aides who provide those services and supports.

Download the full report 

[1] Number of home care aides nationwide reported in “U.S. Home Care Workers: Key Facts,” Paraprofessional Healthcare Institute, 2016, http://phinational.org/home-care-workers-key-facts. Analysis of 2010–2014 American Community Survey data shows that 94 percent of home care aides in Maryland are women, compared to 51 percent of working age adults. Sixty-eight percent of home care aides in our state are people of color (defined as all racial and ethnic combinations other than non-Hispanic whites), compared to 47 percent of working age adults. For this analysis, home care aides were defined using the methodology employed in Sarah Leberstein, Irene Tung, and Caitlin Connolly, “Upholding Labor Standards in Home Care: How to Build Employer Accountability into America’s Fastest-Growing Jobs,” National Employment Law Project, December 2015, http://www.nelp.org/content/uploads/Report-Upholding-Labor-Standards-Home-Care-Employer-Accountability.pdf.

[2] Erica Reaves and MaryBeth Musumeci, “Medicaid and Long-Term Services and Supports: A Primer,” The Henry J. Kaiser Family Foundation, December 15, 2015, http://kff.org/medicaid/report/medicaid-and-long-term-services-and-supports-a-primer/.

[3] Sunderland, “Self-Determination for Persons with Developmental Disabilities.”

[4] “FY 2017 Fiscal Digest (Approved Operating Budget),” Maryland Department of Budget and Management, January 13, 2016, http://www.dbm.maryland.gov/budget/Pages/operbudget/2017-FiscalDigest.aspx.