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Attacks on Medicaid Spending Harm Direct Care Workers

February 16, 2023

A growing workforce shortage in direct care has raised serious concern among government leaders about how to improve these jobs so that older adults and people with disabilities can access the services they desperately need. Undermining this effort are widespread conservative attacks on Medicaid—the primary public payor in this system—with little consideration for how defunding this program affects this workforce.

A recent commentary from the Empire Center for Public Policy, a New York-based offshoot of the conversative think tank, the Manhattan Institute—takes on New York’s Medicaid program. In the January 6 op-ed published in The Wall Street Journal, the Empire Center denounces New York’s Medicaid budget, noting it outsizes all other states’ spending on this program largely due to “expensive and sometimes wasteful” personal care services. It also contends—with little empirical evidence—that the state’s Medicaid program is rife with fraud and abuse.

It’s true that New York State’s Medicaid budget for home and community-based services is disproportionately high, primarily because the state offers one of the country’s most comprehensive long-term care packages, which includes an impressive array of home and community-based services. Labor costs for direct care services, such as personal care, often account for large portions of state Medicaid budgets, and spending in this program will be higher when states invest in creating good jobs. As millions of New Yorkers turn 65 and live longer, the state has recognized it makes good moral and fiscal sense to invest in the booming long-term care sector and more in home and community-based services, which most people prefer.

Yet instead of acknowledging this imperative to strengthen the direct care workforce so that older adults and people with disabilities receive the quality services they need, the Empire Center argues that New York has created an unnecessarily large workforce that will be difficult to sustain financially in the long term. In actuality, the state’s direct care workforce will need to grow even more in the years ahead–from 2020 to 2030, this workforce is expected to add more than 215,000 new jobs to meet demand.

The op-ed also relies on faulty data analysis. For example, it’s assertion that New York State’s Medicaid spending “was nearly as much as the other 49 states combined” is wrong; in truth, the state’s total HCBS spending in 2014 was $80.6 billion for the whole United States and $12.8 billion in New York State. The op-ed also misrepresents outdated data, citing a 2019 study with 2014 figures focused on all HCBS dollars, not just personal care services.

These arguments about defunding Medicaid are neither new nor specific to New York. They are the products of conservative think tanks that have been weaponized for years nationwide to defund programs like Medicaid. Consider that the Empire Center bills itself is a “an independent, non-partisan” think thank yet its analyses mirror the talking points of other fiscally conversative organizations. Under the guise of “economic choice and individual responsibility,” they aim to dismantle publicly funded programs like Medicaid, primarily by raising public ire about fraud and abuse in these programs, despite the limited evidence. As stated eloquently in a recent Los Angeles Times article, these eligibility arguments are “designed to reinforce negative stereotypes about Medicaid recipients and a means to make states nervous about spending on the program.”

Who’s harmed the most by these ideologically conservative arguments about Medicaid? Poor and low-income people, who need health and long-term care, and direct care workers, who deserve better jobs that would allow them to make ends meet and reward them for the essential support they provide. On the latter, home care agencies, residential care settings (like assisted living), and nursing homes across the country have been widely reporting report a worsening workforce shortage for years, which makes it impossible to meet demand and risks shuttering their businesses.

At the core of this staffing crisis are inadequate reimbursement rates under Medicaid, which would only worsen if groups like the Empire Center were successful. Already, research on state-level policy supports for direct care workers shows that states with weaker investments in direct care jobs are often the same states that are least supportive of programs like Medicaid. And if long-term care employers can’t find workers, what will older adults and people with disabilities do to survive? How will family caregivers stay afloat financially and emotionally?

A more measured op-ed examining New York’s long-term care landscape would center the realities of the direct care workforce and the individuals who receive support within a more balanced assessment of the state’s fiscal pressures. For starters, it would ask New York State to establish livable and competitive wages for direct care workers across all long-term care settings and to integrate these base wages into Medicaid rates through a transparent rate-setting process. It would propose bolstering training programs to ensure all direct care workers acquire the skills and knowledge to succeed in their complex roles and recommend that the state create a “universal worker” model that trains and certifies all direct care workers in a standardized set of core competencies, providing them a credential they can carry from one employer to another. And it would call for a more comprehensive and unbiased assessment of the systematic costs and benefits of these investments. While these recommendations are only the start of a broader policy transformation for this workforce, they at least begin informing how state funding levels should be set.

The ideas in the Empire Center’s op-ed reflect a pernicious and destructive strategy by conservatives: raise public doubt about Medicaid by overstating its fraud and eligibility abuse, claim that governments pay too much for it, then shrink and eliminate this program. Meanwhile, they look the other way when workers can’t afford housing or food, employers struggle to find workers, and older adults and people with disabilities don’t receive care—in short, when the country’s critical long-term care system continues to falter until it collapses.

Policymakers shouldn’t fall for this scheme—too many lives are in their hands.

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