top of page

How President Biden's Long-Term Care Reforms are Shaping the Home Care Economy

If you're a home care agency (especially one that accepts Medicaid), this news is going to change how you run your business

While we love the positive impact home care can have on a family, many Americans struggle to afford quality care. On top of that, the caregiver crisis continues as home care agencies struggle to retain caregivers due to the immense amount of work they do and the low pay as many caregivers still struggle to pay the bills.

What the White House Is Doing About the Issue

The US recognizes these problems and is implementing a new rule to ensure that more Americans can afford high-quality care even if their income is low by finalizing a rule called “Ensuring Access to Medicaid Services”

Biden's "Ensuring Access to Medicaid Services" Rule

Here is what the rule entails

  • 80% of the Medicaid payments will go to the home care worker

  • States to be more transparent on how much they pay for home care, thus putting more responsibility on home care providers

  • States will have advisory boards made of home care workers and other stakeholders to advise on rates and compensation to the worker

If you wish to view the whole article you can view it here

The article also goes into detail on new provisions for nursing homes, and how they have increased minimum staffing ratios on nursing homes receiving public funding.

Overall I see this rule as a positive step forward for caregivers and patients. As caregivers are getting paid more, they will deliver better care to individuals and could also help with the high turnover rate that plagues the industry.

However, this may come at the expense of the home care provider (assuming the pay rate doesn't increase). Most care agencies pay 45-60% of the hourly rate to the caregiver. Forcing an increase of 80% will not only cut into profits but also other office expenses the home care agency has to pay.

Will This help the home care industry?

In my opinion, I think this new rule addresses one issue by hurting another and thus might have a bit of a backfire. If you cut into the profits of a business, they will want to do less for the sector. The fact sheet reports that more than 3/4 of Medicaid home care providers aren't accepting new clients.

While a big reason may be because of the caregiver shortage (As many people are on a waitlist to get care because of this), another one is that it can be challenging for a home care agency to get Medicaid payments, as they have to wait an extended period before they get paid.

This leads to home care agencies not willing to accept Medicaid clients because of the hassle and the potential to lose money. They are more likely to go after private pay clients (which only the upper middle class can truly afford, disparaging the gap even more)

A solution to this (in my opinion) is for the government to pay for home care on a weekly (or 2 weeks at max) basis. Most have to wait 30 days or even longer which can hurt the cash flow of the agency. Faster payouts will help with this issue for sure.

While in some states, its easier to be able to accept Medicaid, in others it isn't. Many new home care agencies don't qualify to accept Medicaid but can deliver the same if not better quality care. Making it easier (or more lucrative) for home care agencies to accept Medicaid can help deliver higher-quality care to families and ensures that home care agencies keep accepting Medicaid clients without them having to wait to long for services)

Overall, I expect more government changes to affect home care as the years go by. Be sure to keep up with the latest posts and other ways you can get private pay clients!

84 views0 comments


bottom of page