Organizations representing home health workers are trying to persuade Gov. Kathy Hochul to reverse a provision in last year’s state budget that deprived many providers of a much-needed revenue stream while increasing the flow of funding to powerful of politically connected unions.
The provision, which reduces state-funded home health care worker wage subsidies, was quietly included in the deal after weeks of closed-door negotiations.
Meanwhile, lawmakers agreed to increase funding for an obscure health department program that directs cash to home health agencies affiliated primarily with 1199 SEIU, the powerful health care worker union.
Organizations representing home health care workers are now venting their frustrations with the agreement and calling on lawmakers and the governor to overturn it in this year’s budget.
“We were alarmed when the budget deal was announced last year that required home health care aides, primarily immigrant women working their first jobs in the United States, to pay for minimum wage increases through reductions in benefits,” said Connor, who represents several New York agencies. Shaw, political director of the Home Health Care Workers Union of America, told the Washington Post.
Since 2016, home health care workers in New York City and Nassau, Suffolk and Westchester counties have received additional supplemental payments on top of their base salary. This amount can be paid directly to the worker, or the home health agency can use it for other benefits, such as health insurance.
Last year, in New York City, workers received an additional $4.09 an hour on top of their base wage of $17 an hour. In 2024, the minimum wage will increase by $1.55 an hour to $18.55, but the new deal will reduce the wage subsidy by the same amount.
This means workers who receive the full base salary and allowances do not see any impact of the minimum wage increase. Home health agencies that used subsidies to pay for benefits have had to struggle to recoup their losses.
A report last year by the Empire Center for Public Policy first acknowledged the budget deal.
Natalie Krivoruk, administrator at Advantage Home Care in Brooklyn, said her agency offers a basic health insurance plan in addition to other benefits such as counseling services, English training and a child care pilot program for employees.
Krivoruk said the perks have been so popular that her company’s retention rate of about 1,200 employees last year was 80 percent.
“I think we’ve done a good job of providing employees with the incentives they’re looking for, and it shows in our results,” Krivoruk told The Washington Post. “People don’t leave us, they come to us.”
However, Krivoruk said these additional benefits were in danger of having to be cut as the wage subsidy was reduced.
“Unfortunately for us, we don’t have the wherewithal to do that. Especially now that interest rates are being squeezed,” she said.
Hochul’s budget office supports the changes to wage equalization subsidies, arguing they more directly benefit workers.
“Last year’s adjustments to the wage subsidy were part of a comprehensive approach by the state to invest in increasing wages for home care workers,” a spokesman for Hochul’s budget chief told The Washington Post.
But while the state adjusts worker wages, it is reinvesting funds from the supplement to directly benefit a specially tailored health sector program that funnels the cash to a select group of home health agencies, most of which Majority by Political Powerhouse Healthcare Alliance, 1199 SEIU.
The Quality Incentives Vital Access Provider Pool (QIVAPP) program provides state-provided financial benefits that are transferred to their health plans through home health agencies. To qualify, agencies must demonstrate that they pay employees a base salary and provide a certain amount of training. However, applications for QIVAPP have not been open for years.
Krivoruk said her agency applied for QIVAPP in 2017 but never received a response from the Department of Health.
Of the 69 providers currently participating in QIVAPP, 42 have negotiated agreements with 1,199 SEIUs.
The powerful union represents hundreds of thousands of members across New York’s health care sector and spends millions of dollars to run one of the state’s most powerful political operations.
Additional funding injected into QIVAPP by the state government has kept the 1199 beleaguered Home Health Worker Benefit Fund afloat. Public reports show the welfare fund received $49 million in QIVAPP funding as part of the 2022-2023 state budget.
The latest filing even states that without more cash from Albany in last year’s budget, the fund would have gone bankrupt, forcing its employees to participate in state-run essential plans.
“The fund also relies on continued funding from QIVAPP to address funding shortfalls,” the report said.
A spokesperson for 1199 said the union supports the governor’s move to reduce wage parity subsidies while increasing overall wages for workers.
“We support approaches that increase worker wages, reduce opportunities for employers to misuse benefit funds, and continue to fund union and non-union employers who legally offer comprehensive benefits,” a 1199 spokesperson said.
A spokesman for Hochul, the budget chief, viewed last year’s decision to increase QIVAPP funding as an investment in “providers who provide workers with health insurance,” but noted that reopening applications for more providers to join the program would be costly to the state Over processing.
“Further modifications or additions to the QIVAPP program would significantly increase costs and are currently not possible,” the spokesperson told The Washington Post.
Home health worker groups were surprised to see the provision included in the budget, but that shock has now turned to dismay.
“In effect, the state is lining the pockets of low-wage, non-union workers to bail out union benefit funds,” Bill Hammond, senior fellow for health policy at the Empire Center for Public Policy, told The Washington Post.
“Despite all the talk in Albany about ‘fair pay for home care,’ the governor and the Legislature approved this ugly deal without hesitation and without public debate.”