HARRISBURG — Supporters believe Pennsylvania lawmakers will include $21 million in the final budget deal to raise wages for a small group of home care workers in an industry known for low pay.
The increase, pitched by Democratic Gov. Josh Shapiro in his budget proposal earlier this year, would affect roughly 8,500 workers directly employed by their patients through a Medicaid-funded state program. They’re among the lowest paid home care workers in the commonwealth, making an average of $13.50 per hour and receiving no benefits, according to SEIU Healthcare Pennsylvania, a union that represents them.
They also make up just 6% of Pennsylvania's home care workers. Industry groups are pushing state lawmakers to allocate hundreds of millions of dollars so wages can be raised across the board.
Still, even the lower investment isn’t guaranteed to be in the final budget. With the June 30 deadline to pass a budget in the rearview, Democratic and Republican leaders are keeping their public comments to a minimum as they work to negotiate a deal behind closed doors.
Meanwhile, the home care industry is bracing for dramatic service reductions from President Donald Trump’s tax cuts. KFF, a health policy nonprofit, estimates it would reduce federal Medicaid spending in Pennsylvania by up to $66 billion over 10 years.
Home care services are popular because older adults often prefer to avoid nursing homes and hospices, industry advocates told Spotlight PA. Home services are also cheaper overall than nursing homes.
But groups such as the Pennsylvania Homecare Association, which represents agencies that employ caregivers, say low pay is driving a crisis, with over 100,000 unfilled shifts each month.
As a whole, more than 240,000 home care workers are currently paid an average wage just shy of $16 per hour, according to the association.
These workers fall into two main categories: those employed through agencies, and those employed through a “participant-directed” program. The latter, smaller group often includes patients’ family members and friends, and is the one Shapiro’s proposal would benefit.
SEIU Healthcare Pennsylvania estimates the funding would produce about a $1 to $2 pay increase for directly employed caregivers.
Union President Matt Yarnell said Shapiro’s proposal would provide a “strategic boost” to caregivers under the participant-directed model, an approach that “saves taxpayer dollars by bypassing agency overhead and administrative layers, putting more dollars directly into wages and benefits.”
“By leveraging this in-home model, the state will see improved health outcomes and bolstered workforce stability," he said.
A low reimbursement rate
The agency-employed caregivers who make up the vast majority of Pennsylvania’s home care workforce also make low wages relative to neighboring states.
The state reimburses home care agencies $20.63 per hour on average to cover all costs, including employee wages, benefits, and administrative costs. The Medicaid reimbursement rate is the lowest among Pennsylvania’s neighbors and has increased by less than $2 in the past decade.
This work includes assisting patients in a wide variety of ways, from providing meals and medicine, to bringing patients to appointments, to helping them dress and use the bathroom. Nearly 80% of home care workers quit each year, according to the Homecare Association.
In a study released earlier this year, the state Department of Human Services recommended a reimbursement rate of $25.42 per hour to fund better pay. This would cost more than $800 million in state dollars, the study found.
The Pennsylvania Homecare Association is making a more modest call — it wants a $370 million investment from the state to increase the reimbursement rate by 10%.
Cody Jones, the org’s government affairs director, told Spotlight PA he was disappointed that the governor’s proposal included an increase only for nonagency workers.
Without a pay increase for all home caregivers, this support will be harder to access for those who depend on it, he argued, and the situation will grow more dire as the population ages. More than a third of Pennsylvanians are expected to be over 65 by 2030.
“What makes me even more anxious than what is happening right now is what's going to happen down the road,” Jones said. “If we don't have the ability to attract more direct care workers as we're approaching this demographic cliff, we can be in serious trouble.”
Budget questions
In 2023, the state House passed a resolution directing the Legislative Budget and Finance Committee to study funding for home- and community-based services. The report, which was released in June, recommended that the General Assembly periodically raise funding based on inflation.
State Rep. Maureen Madden (D., Monroe), chair of the House Aging & Older Adult Services Committee, is pushing fellow lawmakers to fund a pay increase for home care workers. She told Spotlight PA that Shapiro’s proposal is a step in the right direction, but she’d like to see funding for both agency and non-agency caregivers in this year’s budget.
“We have good infrastructure in Pennsylvania for seniors, but we're not funding it,” she said.
In a recent letter sent to Shapiro and legislative leadership in both chambers, Madden urged funding for across-the-board pay increases for these workers.
“The workforce shortage is real and growing,” she wrote. “If we fail to act, thousands more Pennsylvanians will be left without the care they deserve, and our capacity to care for the most vulnerable in our communities will collapse under the weight of inaction.”
Madden also warned that federal Medicaid cuts could worsen the problem.
In a letter sent by the Homecare Association to the state’s congressional delegation in May, before the cuts passed, CEO Mia Haney said they could “collapse Pennsylvania’s in-home care industry.”
Spokespersons for Shapiro and state House Majority Leader Matt Bradford (D., Montgomery) did not respond to requests for comment.
As budget negotiations continue, Republicans, who control the Senate, are determined to address the state’s structural deficit. Reducing Medicaid spending has been one of their key goals. Leaders say they are considering cuts to coverage of weight-loss drugs that can also be prescribed for diabetes.
Kate Flessner, spokesperson for Majority Leader Joe Pittman (R., Indiana), did not say if the senator would support a higher Medicaid reimbursement rate in the budget. She pointed instead to a recent statement by Republican leadership on budget negotiations.
“Pennsylvania is facing a multi-billion-dollar structural deficit that we must address this year to prevent a financial crisis and tax increases in the future,” they said.
