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$15 minimum wage could raise Medicaid costs, home-care provider group says

Gov. Andrew M. Cuomo’s drive for a $15-per-hour minimum wage is getting criticism for a new corner: Home-care providers.

Home-care providers say the move to a higher wage could either drive up Medicaid costs or force some providers to close.

They say many businesses simply won’t be able to pay $15 per hour — unless the state also raises the amount it pays into Medicaid. The majority of services provided by home-care attendants — such as long-term care for the elderly and disabled — is funded primarily through Medicaid and state and federal governments set the payment rates for services.

Many companies pay below $12 per hour. Minimum wage is currently $9 per hour in New York. Cuomo, a Democrat, has introduced a plan to raise it to $15 per hour by 2021, saying he wants to be the first governor in the U.S. to do so.

“Absent substantial increased support to fund the minimum wage, a home-care industry already in crisis will be confronted with unacceptable risks to our primary mission,” the New York State Association of Health Care Providers said in a statement. “Using conservative estimates, (Cuomo’s) proposal would cost the home-care industry at a minimum an additional $1.7 billion annually once fully phased in, the majority of which will have to be paid for under the Medicaid program.”

The association says it “cannot support any increase to the state minimum wage” absent a rise in reimbursements it gets from Medicaid.

“Without fair and equitable reimbursement of our costs, New York’s home-care industry will not be able to survive,” the association said.

Sen. Jeff Klein (D-Bronx) has proposed raising payment rates to home-care providers.

“While New York State relies on these workers to deliver the critical services for our most vulnerable citizens, the state must do its part to raise its Medicaid reimbursement rates to service providers to ensure that these necessary wage increases do not lead to cuts in services,” Klein said in a statement earlier this month.

Cuomo spokesman Richard Azzopardi contended the state doesn’t have to raise Medicaid rates to ensure health-care workers get a raise.

“We reject any notion of a false choice between lifting fulltime workers out of poverty and altering the Medicaid cap,” he said, “which has successfully tamed skyrocketing Medicaid costs even while the program has served more New Yorkers.”

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