April 9, 2024 Washington, DC — Statement from Katie Smith Sloan, president and CEO, LeadingAge, the association of nonprofit providers of aging services, serving older adults in a range of care settings and community types, wherever they call home, regarding President Biden’s remarks on the Care Economy today: 

“For the first time in decades, our federal government is committed to meaningful action to ensure America’s older adults and families can receive quality care in nursing homes, and in their homes and communities. LeadingAge and our nonprofit, mission-driven aging services providers share the Biden Administration’s goal. Caregivers, as the President noted, are critical; without staff, as our nonprofit mission-driven members know, there is no care. Yet, unfortunately, the administration’s approach misses the mark. 

First, on the goal of ensuring more Medicaid dollars go to the home care workforce, via the proposed Medicaid Access Rule. While well-intentioned, the “80/20” provision, which would require that at least 80% of all home and community-based services (HCBS) Medicaid payments are spent on compensation to direct care workers (specifically homemaker services, home health aide services, and personal care services), will likely reduce, rather than increase, older adults’ access to care and services. 

Implementation would be costly. Analyses of current state rate structures show that states, on average, would need to raise rates by over 45% without requiring massive cuts to quality, health and safety. Without rate increases, providers would need to cut their non-caregiver wage expenses by over two thirds. 

We expect that the rule, if implemented as proposed, will lead to provider closures and exits from the sector. 

In addition to expense, even if implemented as proposed, the regulation’s desired impact is not guaranteed. Neither the infrastructure nor data exist that would enable tracking and support for this wage passthrough. 

A proposal of this magnitude cannot be implemented without federal and state investment, both to fund the workforce and to ensure that the administrative infrastructure needed to ensure that such a threshold can be implemented as intended. 

Quite simply, the math does not work and is only achievable if there are substantial additional resources to allocate substantially more Medicaid dollars towards ensuring fair pay for our workforce. 

As for the Biden Administration’s proposed staffing mandates for nursing homes, again, we share the goal of ensuring quality care in nursing homes. However, mandates are not the right approach. 

Two major issues – the ongoing workforce crisis and the proposal’s astronomical implementation costs – make this proposal impractical and simply bound to fail. Instead of impractical and ineffective new rules, the administration and Congress should invest in serious solutions to tackle the aging services workforce crisis in America:

Develop and invest in a robust workforce development strategy that includes:

• prioritizing immigration reform to help build the pipeline of workers
• increasing funding and work with states to increase Medicaid reimbursement rates to cover the cost of care and increase wages; and 
• replicating existing successful training programs and expanding opportunities for interested applicants to pursue careers as RNs, LPNs and CNAs. 

Finally, we urge the President to think more broadly when considering older adults’ needs. A focus on care in the home is important, as is care in nursing homes. But older adults and their families rely on a range of care settings to ensure their well-being and quality of life, which is why we urge action to support providers serving older adults in assisted living, adult day settings, and affordable housing communities for low-income older adults. Housing is critical to maintaining good health. Older adults need affordable homes to live in in order to receive the care they need. We cannot cut housing funding without negatively impacting older adults’ ability to age in community.”