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Murphy Recommends Middle Ground for Home Care Wage Measure

Issuing a conditional veto, governor urges new hourly rate of $18 rather than the $20 legislators had wanted

Home care

Agencies that dispatch home care workers to help elderly and disabled Medicaid members with bathing, dressing and other daily tasks could soon earn $2 more per hour under legislative changes the governor is urging lawmakers to adopt.

Gov. Phil Murphy issued a conditional veto on Sunday that returned to lawmakers a bill designed to raise the rate for this work to $20 an hour, starting this week, and to $25 by 2025. Murphy urged them to amend this to $18 hourly, a rate he said is supported by the new state spending plan; Medicaid currently pays just over $16 for these so-called personal care services. Any change now requires legislative action.

“I agree with my legislative colleagues that this is inadequate, particularly when compared to our peer states. Competitive wages are critical to recruiting and retaining quality workers and ensuring consistent, high-quality care,” Murphy wrote in his veto message. According to the legislation, Pennsylvania reimburses providers at $19.50 an hour and New York pays $23 hourly.

But Murphy also noted that the fiscal year 2020 budget lawmakers sent to him, which he signed Sunday and which took effect the following day, includes $21 million funding to boost Medicaid payments for these services; the Assembly appropriations committee acknowledged it would require more than $65 million in state money — plus equal federal matching funds — to cover the $20 rate proposed in the legislation.

“Curiously, this bill and the budget passed by the Legislature, which were delivered to me on the same day, do not align,” he said. The funding gap had also raised questions for representatives of Medicaid managed-care companies, which would be tasked with paying the higher rates and wanted to make sure the state would cover the additional costs.

‘Unconstitutional and unenforceable’

Murphy also urged lawmakers to strike language that would increase the pay scale in future years, noting that state law prevents them from “creating liabilities in future fiscal years without voter approval,” he wrote in his CV message. “The mandate upon future appropriations contained in this bill is therefore unconstitutional and unenforceable.”

Representatives for the lead sponsors — Sens. Richard Codey and Teresa Ruiz, and Assemblywoman Eliana Pintor Marin (all D-Essex) — declined to comment Tuesday on the Legislature’s plans for the bill. Both houses would need to vote to accept Murphy’s changes for it to become law; they are now on their summer break and have no legislative sessions scheduled for the coming months.

Increasing wages for personal care assistants, or PCAs, has long been a priority for lawmakers in both parties, as well as healthcare advocates who argue that the low wages — the employees are paid a portion of the Medicaid rate, not the full $16 — make it hard for agencies to attract and retain staff. The work can be physically and emotionally challenging, requires extensive training and state licensing, and the take-home pay can equate with that available at retail or fast-food jobs, making it a tough sell to new hires, advocates note.

Roughly 30,000 residents now receive care from these aides, who supplement the work of nurses and other clinical staff. And demand for their services is growing as the elderly population grows and more people try to remain independent at home.

“Importantly, home-based care not only allows individuals who would otherwise be unable to continue living at home to remain in their communities, but is also more cost-effective than care provided in hospitals and nursing homes,” Murphy noted. “As our population continues to age, and medical advancements enable people to live longer and with chronic conditions, the demand for personal care services will increase. New Jersey needs a robust workforce capable of meeting this demand,” he wrote.

Who benefits from increased funding?

Any increase approved by lawmakers would build on a rate hike Murphy helped implement in 2018, when he included an extra $16.7 million in the previous state budget to add $1 to the Medicaid reimbursement rate for personal care services, bringing it to just over $16 hourly.

Murphy did not take issue with how the bill is silent on who benefits from the increased funding. The legislation was amended to remove language that would have required the rate increase to be passed on to the workers directly, which lawmakers said allowed employers the needed flexibility to cover any additional payroll tax or related costs.

Ironically, when a similar measure passed in 2017, former Gov. Chris Christie vetoed the bill for several reasons, including the fact that it did not guarantee that any rate hike went into the workers’ pockets. “These increases cannot and should not go to administrative costs or additional profits for the MCOs, since the sponsor and supporters contend that is not the intent of the bill,” Christie noted in his veto message.

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