Budget fails to address gap in home care worker pay
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The state budget, signed into law by Gov. Josh Shapiro on Sunday, included a boost in funding to increase the rates paid for some home health visits. The deal, however, did not tackle the challenge of bringing Pennsylvania's Medicaid reimbursement rate for home healthcare in line with the rates paid in neighboring states.
Industry officials say that Pennsylvania's lagging reimbursement rate translates into wages that are uncompetitive, making it difficult for home care providers to recruit enough staff.
A legislative study released last year found that the average wage for a home healthcare aide in Pennsylvania was $14.70 an hour in 2023.
"We simply cannot get enough people to go work in home care because facilities will pay them more, and frankly, other industries will pay them more," Mia Haney, chief executive officer for the Pennsylvania Homecare Association told CapitolWire/State Affairs. "Direct care workers, in particular, can go to Sheetz, they can go to Wawa, they can go to Home Goods, they can go to TJ Maxx, and make more money for less demanding work."
More than 112,500 shifts of care go unfilled each month and nearly 29% of authorized pediatric nursing hours are unstaffed.
Industry officials pointed to the closing of the Philadelphia-based Liberty Home Choices as an example of the financial struggles facing home care providers. Liberty Home Choices announced in March that it was shutting its doors and laying off 615 employees.
The 2025-26 state budget, signed by Shapiro in mid-November, included $21 million to boost the pay of home care workers who are hired directly by the patients.
Home care workers employed by agencies were left out and the 2026-27 budget didn't help much either. The new budget includes funding to help pay for the cost of short-term nurse visits for Medicaid patients who have been released from the hospital. The budget did not tackle the bigger problem of increasing the reimbursement rates to boost pay for the hundreds of thousands of home care workers.
Industry officials say neighboring states made significant investments to boost their Medicaid reimbursements following the COVID-19 pandemic but Pennsylvania did not follow suit.
The cost of catching up is staggering: $800 million-$900 million.
Haney said officials in the home care industry recognize that getting the state to appropriate that much all at once is a big ask, particularly when state lawmakers are already confronting challenging budgets without tackling the reimbursement rate crisis.
"The budget environment is what it is. When you have a structural deficit that you're facing, it is really hard to get these meaningful changes enacted," she said.
Rather than seeking the full amount needed, the trade group has been calling for lawmakers to provide a $500 million boost.
The reason the numbers are so large is that so many people depend on home care services, she said.
"This budget has real consequences for real people," Haney said. "Families go without support, medically fragile children remain hospitalized longer than necessary, and more Pennsylvanians are forced into higher-cost institutional settings. This is about far more than reimbursement -- it's about whether people can access care in their own homes."
Haney said lawmakers on both sides of the aisle recognize the need to respond to the crisis and having not been included in the 2026-27 budget, and attention now turns to 2027-28.
"We're calling on the legislature to prioritize home care in this next year. It has to come from every single one of them. They all need to make it part of their talking points, and we all need to be pushing to support this really basic right of Pennsylvanians," she said. "We all want to age in place. We want to age in this beautiful state that has so much to offer us and nobody envisions their final days in a facility."