Minimum wage proposal vexes Connecticut nursing homes
They're squeezed between higher employee pay demands, limited state funds
For years, Kevin O’Connell has struggled to lure and retain nursing assistants who provide vital care to the hundreds of aging patients at Geer Living, a senior community nestled in Connecticut’s northwest hills.
Competition for the aides, known as certified nursing assistants, is fierce in the state’s nursing home sector, as facilities battle over a limited number of skilled workers that answer patient calls, check vital signs, and bathe and dress the elderly residents.
A well-intended proposal to boost Connecticut’s minimum wage could make the problem even worse.
Nursing homes receive a fixed amount of state aid for Medicaid patients, who make up the majority of the facilities’ patient pool. For the last decade, that level of aid has barely budged.
If a plan to raise the state’s minimum wage to $15 an hour, up from $10.10, succeeds this year, nursing home operators – wedged between rising labor costs and stagnant funding – say they may be forced to lay off staff or trim benefits to come up with the additional money for the organizations’ lowest paid employees.
And while they are raising pay for those workers, the pressure would heighten to increase compensation for others, including the nursing aides that are in short supply.
“Now you have the line staff making the same as the skilled staff or close to it, and that just puts pressure right up the chain,” said O’Connell, chief executive officer of Canaan-based Geer. “So while raising the minimum wage will certainly help employees, it will just exacerbate the problems I face.”
O’Connell has estimated he would need another $70,000 to bring all of his workers’ hourly pay to $15. It could be double that if he also raises the salaries of nursing assistants.
The dilemma – how to lift pay for thousands of employees who make less than $15 an hour, plus those above them with a greater skill set – has confounded nursing home leaders and others in the care sector who rely on state assistance to keep the facilities adequately staffed and running smoothly.
“Now you have the line staff making the same as the skilled staff or close to it, and that just puts pressure right up the chain. So while raising the minimum wage will certainly help employees, it will just exacerbate the problems I face.”
CEO, Geer Living
Gov. Ned Lamont and lawmakers have floated budget proposals for the next two years that do not include an increase in the state’s Medicaid reimbursement rate, which would help offset the dramatic rise in pay for many nursing home employees. Sluggish wages have already prompted union members at 20 nursing homes to vote in favor of a strike, though a threat to stop work has been called off for now.
At the same time, Lamont and legislators are pushing a minimum wage hike. The governor’s plan would nudge pay to $15 an hour by 2023; lawmakers’ bill would bring it to that level by 2022.
That has led caregivers and administrators to show up in droves at the Capitol, pleading with state leaders to put more money in the budget to address the chasm. Others wrote letters to lawmakers.
“I fear that our nursing home is now at a critical juncture,” Thomas Russo, executive director of Kimberly Hall South in Windsor, wrote to legislators. “We are clearly at a point where we can’t go another year without Connecticut policymakers recognizing that substantial Medicaid help is overdue.”
Russo stopped short of listing the consequences should a funding increase go unmet. But advocates for home care agencies, which also serve a significant number of Medicaid patients, were more blunt.
Chaim Gewirtzman, chairman of the Home Care Association of America’s Connecticut chapter, told lawmakers that a minimum wage hike could trigger layoffs, fewer hours or less pay for caregivers, or a reduction in entry-level positions.
It would also fuel demands by more experienced workers for higher wages, he said.
Deborah Hoyt, president and chief executive officer of the Connecticut Association for Health Care at Home, said $21 million, or a 22 percent increase in the Medicaid reimbursement rate, would be needed just to make up for years of flat funding and cuts to her industry. She did not have an estimate for the overall increase required to offset the minimum wage proposal.
One home health agency in her network would need $65,934 more a year to keep up with the mandate, Hoyt said. Another, larger group would need an additional $358,081 annually.
“The reimbursement has not kept up with the need to be able to increase the wages,” she said. “Most of our home health agencies are just hanging on by their fingernails. They are in the red; they’re seeing financial losses.”
“The reimbursement has not kept up with the need to be able to increase the wages.”
President, Connecticut Association for Health Care at Home
Without an increase in the reimbursement rate, Hoyt added, “agencies will opt-out as Medicaid providers and Medicaid clients will find it increasingly difficult to access cost-effective, home-based care.”
That could push more people into nursing homes, further burdening those facilities.
Mag Morelli, president of LeadingAge Connecticut, said the 35 nursing homes her group represents would collectively have to come up with another $8 million to $9 million to support the raises and benefit increases under the minimum wage hike, a seemingly impossible feat without more state aid.
But given Connecticut’s enormous fiscal challenges, advocates’ appeal for more money has so far gone unanswered.
‘We deserve more’
The plight of nursing home operators and residential care groups is one side of the coin.
On the other are workers with tremendous demands who have gone years with little-to-no pay raises.
For Howard Francis, a 49-year-old janitor at Fresh River Healthcare in East Windsor, earning $15 an hour would be a considerable adjustment. He now makes a little over $13 an hour.
The extra money would help pay for overdue car and medical bills. It would replenish his overdrawn bank account and maybe even allow him to buy a cell phone.
Francis has been living paycheck to paycheck as he tries to make ends meet for his family, which includes a 3-year-old daughter in Hartford and a son in Jamaica.
“It’s rough, trust me,” he said recently. “I owe car taxes. My insurance bill is coming up later this month. I don’t have money right now.”
A few weeks ago, he wound up in the emergency room. After a battery of tests turned up no serious ailment, a doctor suggested it might be stress-related.
“I am stressed,” Francis acknowledged. “I’m worried about my bills.”
Since 2015, Careene Reid, a certified nursing assistant at Trinity Hill Care Center in Hartford, has only received one modest pay increase of 27 cents an hour. Her $15.12 hourly rate would be unchanged by the minimum wage proposal, but Reid said that if salaries for other, less-demanding jobs are boosted, hers should be, too.
“We’re the ones who get all the pressure, all the heartache,” she said. On a daily basis, she helps feed, toilet and clean up after people who can’t care for themselves.
“It is not fair for a worker to get $15 an hour just to flip a burger when we’re in the nursing homes. We’re certified with the state. We had to go to school,” she said. “We don’t expect somebody to just walk off the street and do it.”
Reid’s union, New England Health Care Employees SEIU District 1199, which represents more than 19,000 people in Connecticut, has made a separate push for a 4 percent pay raise, threatening to strike if the state doesn’t come up with more money for nursing home workers. Employees at some of the facilities had planned to walk off the job on May 1, but postponed the move after Lamont indicated he would try to work on the issue.
“It is not fair for a worker to get $15 an hour just to flip a burger when we’re in the nursing homes. We’re certified with the state. We had to go to school.”
CNA, Trinity Hill Care Center
As a licensed practical nurse, Meriam Robinson makes more than some of her peers at Trinity Hill. But if lower-paid employees are seeing a salary bump, Robinson, who earns $26.80 an hour, would like one as well.
“The work is so hard, and the money is just not adding up,” she said. “We can’t take a vacation. Food is expensive, even with my paycheck as a nurse. We deserve more. A lot more.”
Nursing home managers and home care administrators are quick to side with their workers. They point to the long hours and arduous tasks caregivers handle every day as evidence that better pay is warranted.
But the lack of state funding has left them in a bind.
“They certainly deserve a wage increase,” Hoyt said of the employees. “But mandating it in the absence of any reimbursement change is just not feasible.”
No easy answers
Lawmakers are in a similar predicament. Several have expressed a desire to help workers across the care sector, but concede that the state’s financial crisis has hampered their efforts.
Lamont and legislators are struggling to close major deficits projected for each of the next two fiscal years. The governor’s office estimated earlier this spring that spending is on pace to exceed revenues by $1.7 billion in 2020 and by $2 billion in 2021.
Connecticut also faces substantial budget deficits in future years as it tries to pay down pension debt that has accumulated over more than seven decades.
Rep. Toni Walker, House chairwoman of the Appropriations Committee, said lawmakers often fail to weigh the long-term effects of proposals like the minimum wage hike.
“We have a lot of state employees and a lot of what I call ‘cousins of state employees’” – nursing home and community-based workers, she said. “We’ve got to gradually move our hourly wage up, but we’ve got to do other things so we don’t bankrupt these systems.”
Rep. Gail Lavielle of Wilton, the ranking House Republican on the Appropriations Committee, said Connecticut can’t afford the extra funding providers would need. That’s part of the reason she’s opposing a minimum wage increase.
A $15-per-hour mandate without safeguards built in for nursing homes, home-care agencies and other nonprofits signals a lack of planning, she said.
“We aren’t going to be able to serve the people who need it,” Lavielle said. “Everything is connected.”
But some lawmakers remained optimistic as they headed into the contentious final stretch of the legislative session. The session ends June 5, though officials have said budget negotiations may run beyond that.
Sen. Mae Flexer, D-Killingly, a supporter of the minimum wage hike, is hopeful that legislators who back the proposal are also prepared to invest state dollars in care providers. The General Assembly has tackled lean budgets in recent years, she pointed out, giving lawmakers ample opportunity to learn how one issue affects another.
“We know providers have been dealing with difficult fiscal realities because the state has been dealing with them,” she said. “It all goes together.”
CT Mirror Staff Writer Keith M. Phaneuf contributed to this report.
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