Bill H.2890: Funding More Problems than Solutions

Studies show that 90 percent of the elderly want to live out their days at home. With familiarity sewn into every corner, home feels warm and secure. Moving to a nursing home can be terrifying, replacing the familiar with the unfamiliar and often separating couples because of different needs for care. Many adult children lament moving their parents into a long-term care facility, but all too often in-home care becomes unattainable due to perceived cost, logistics and the amount of care required to keep their parents safe.

Which is where House Bill H.2890 comes into play. The proposed legislation aims to increase funding available to licensed nursing homes in a $90 million rate add-on dedicated to MassHealth nursing homes’ employee costs. The overhead for this industry is far lower than staff costs, which amount to 75 percent of nursing home budgets. The bill also aims to start a system of grants and scholarships to encourage more Certified Nursing Aides (CNAs) to enter the field, with free certification and English learning programs. To provide vital care to our seniors, 77 percent of such CNAs currently work in facilities.  Theoretically, this bill should increase the number of CNAs, and allow nursing homes to raise their wages. The state’s support would encourage this industry to grow larger, since only 6 percent of CNAs choose instead to work in patients’ homes.

Realistically though, this expansion of state support works contrary to the goals of many seniors, their families, and the majority of their caretakers by not regarding the impact it would have on in-home care. In-home care is more cost-effective, gives seniors a chance to stay at home, employs more caretakers, and is projected to offer far more jobs than nursing homes will in the coming decade.

Becoming a CNA requires attendance at a state approved training program (which the Red Cross offers for $1,250) and renewal for $110 every two years. Home Health Aides (HHA’s), 55 percent of which, work in homes, require the same training, but no renewal. Personal Care Aides (PCA’s), 71 percent of which work in-homes, only need a high school diploma or equivalent, and some on the job training. Last year CNA’s earned $1.70 more than HHA’s, and $0.77 more than PCA’s per hour. Certification doesn’t discourage individuals from entering the less regulated fields; by 2026 the United States is projected to have 2.39 million more in-home caretakers (PCA’s and HHA’s) than CNAs. Yet, Bill H.2890 proposes taxpayer money be spent on scholarships for these trainings, and $2.5 million be dedicated to reducing nursing home employee turnover. While that may improve nursing home care, it does not address the increasing demand for in-home care.

The higher wages for CNAs’ work is reflected in the price of these facilities. A 2017 study by Genworth Financial found that the national annual median cost for a semi-private room in a nursing home was $36,583 more than hiring a HHA service. In Massachusetts, that disparity is even larger at $81,037 ($140,525 for a semi-private nursing home room; $59,488 for HHA service).  Using Pioneer Institute’s transparency tool, MassOpenBooks, we can see that of the 50 most costly vendors to MassHealth’s Senior Care Plans in 2015, 18 were nursing homes, totaling $172 million.

House Bill H.2890 encourages Massachusetts to increase funding for nursing homes that many seniors would rather avoid and likely cannot afford without state assistance.  While the bill may help some seniors live out their days comfortably and safely, the state should consider continuing their work to keep seniors at home. They’ve made great progress with PACE (the Program of All-Inclusive Care for the Elderly) and the HCBS MassHealth Waiver (Frail Elder Home and Community-Based Services).  Additionally, a 2017 report from the Massachusetts Medicaid Policy Institute regarding future major MassHealth reform acknowledges that 10,000 more members utilized home health in 2015 than in 2012, with a 1,500 member decrease for nursing facilities in the same time period.

So why is H.2890 attempting to take a step in the opposite direction?

 

Kaila Webb is the Wellesley College Freedom Project Intern at the Pioneer Institute. She majors in Environmental Studies as well as Chinese Language and Culture.