In January, Gov. Kathy Hochul unveiled her budget proposal, calling particular attention to her $10 billion multiyear plan to bolster the state’s health care industry. She called it the “largest investment in health care in state history.”
Fast forward three months, following negotiations with the state Legislature that extended a week past the deadline as leaders argued over how to deploy a cash-flush balance sheet, and that $10 billion swelled to $20 billion.
“This budget includes historic investments that will rebuild the health care economy by raising health care worker’s pay, improving their workplace infrastructure and providing incentives that will attract more people to the workforce,” Hochul said in a statement after signing the 2022-23 budget.
The goal: Grow the state’s health care workforce by 20% over the next five years.
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As the increased spending on health care indicates, the final plan included Hochul’s proposals – and then some. Fiscal watchdogs cautioned that the budget, and some health care programs included in it, add recurring spending – something to watch in the years ahead, since New York won’t always be cash-rich from better-than-expected tax revenues and one-time federal relief aid.
Let’s break down what’s included in the $20 billion health care plan:
1. A boost in pay for home care workers. When Hochul unveiled her original budget proposal, she was immediately criticized for not including a plan to substantially increase the pay for home health care workers, some of the lowest-paid professions in the state.
Downstate politicians and industry advocates called for her to include Fair Pay for Home Care, a bill that called for home care aides to make 150% of the regional minimum wage, in the final budget.
What made it into the budget appears to be a compromise, albeit an expensive one: The budget calls for the regional minimum wage for a home care aide to increase by $2 an hour Oct. 1, followed by an additional $1 increase a year later on Oct. 1, 2023.
Many home care advocates, who camped out in Albany during budget talks, said that wasn’t enough. In Western New York, a home care aide making the minimum $13.20 an hour would presumably rise to $16.20 an hour by fall 2023.
Per state Labor Department data, there are nearly 470,000 home care and personal care aides across New York, making a median annual salary of about $32,000 – just over $15 an hour based on a 40-hour workweek. The entry salary, however, is lower at $28,440 – $13.67 an hour.
Increasing the minimum home care wage by $3 an hour over the next 18 months will cost the state $7.7 billion over the next four years, representing a major chunk of that $20 billion multiyear pledge.
2. A bonus for health care workers. More than $5 billion is earmarked for “pay reform” and bonus wages for health care workers.
That includes $1.2 billion for “health care and mental hygiene worker retention bonuses,” with up to $3,000 bonuses going to workers making less than $125,000 annually who remain in their positions for one year. And pro-rated bonuses for those working fewer hours.
Employees who are eligible for the bonuses are those who provide “hands-on health or care services to individuals,” according to the budget language. The budget bill provides dozens of positions that are eligible, ranging from dental hygienists to physical therapy aides, and from nurses to “all other health care support workers.”
The state’s health and labor commissioners, along with the Medicaid inspector general, will develop the procedures needed to get the bonuses out. It sounds as though there is a lot of paperwork in the future for health care employers.
3. Major funding for health care projects and Covid-19 relief. Hochul’s office said the budget includes $2.4 billion to finance infrastructure improvements for hospitals, nursing homes, ambulatory care centers, community-based centers and other eligible health care facilities and providers. That likely includes the authorization of the fourth round of grants within the Statewide Health Care Facility Transformation Program, totaling $1.6 billion.
On top of that infrastructure spending: About $3.9 billion is set aside in funding – to be spent over four years – to provide aid to hospitals struggling financially from the Covid-19 pandemic. That funding, Hochul’s office said, is an 88% increase over the prior four years.
4. Not quite Coverage for All. In unveiling their budget proposals a month ago, the Assembly and Senate called for including coverage for undocumented immigrants under the state’s Essential Plan, which provides health benefits with no monthly premium for qualified low-income people.
The final budget only partially delivered on that, expanding coverage for undocumented individuals aged 65 and up.
“While the final FY23 state budget will expand coverage to some low-income, uninsured immigrants, more should be done and we remain committed to working with policymakers and key stakeholders to ensuring that every New Yorker has access to comprehensive, quality health care and realizing the goal of universal coverage,” said Eric Linzer, president and CEO of the New York Health Plan Association, which represents 29 health plans across the state.
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The Buffalo Next team gives you the big picture on the region’s economic revitalization. Email tips to email@example.com or reach Deputy Business Editor David Robinson at 716-849-4435.
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