Legislative Appropriations
Wage pass-through legislation is a key strategy for directing money towards the direct care workforce. State legislatures can designate Medicaid reimbursement funds to increasing the wages of direct service workers by requiring providers to spend a percentage of funding on wage increases or by specifying dollar amount to be spent on increases. Some state legislatures have also designated reimbursement funds to increasing access to health insurance for direct service workers.
Several states have found this to be a successful strategy. In 2002, the Wyoming legislature targeted a 28% increase in funding for Medicaid Home and Community-Based Services program for adults with developmental disabilities. The state used these appropriations to raise the average wage rate for direct service workers to $9.96 per hour. In 2007, the Louisiana Department of Health and Hospitals (DHH) received approval at the Joint Legislative Committee on the Budget for a $2.00 per hour wage pass-through for Direct Support Professionals. At least $1.50 of the allotted amount must go directly to the wages of DSPs. Up to fifty cents ($.50) could be used to pay employer payroll taxes, FICA, workman’s comp insurance, unemployment insurance and employee benefits, annual and sick leave, short and long term disability, and health insurance.
In addition to appropriating new dollars for direct service workforce initiatives, states can pay for direct service workforce projects with existing funding. Under Federal funding, we discussed using the Workforce Investment Act (WIA) structure to direct funding (whether federal or state) to DSW projects; Temporary Assistance to Needy Families (TANF) funds can be used in a similar way.
Under TANF, states can use block grant funds for worker training and other support services aimed at moving low-income parents in to the workforce. In New York, for example, the legislature has allocated TANF funds to the Health Worker Training Initiative. The Initiative awarded grants to hospitals, nursing homes, and home care entities for recruitment and retention strategies including training, outreach to high school students about careers in health care, wage subsidies, and childcare and transportation.
For more information about the use of TANF, WIA, and wage pass-through legislation to fund direct service workforce initiatives, please see:
- “Rescuing the Health Workforce: Options for State Action,” National Governor’s Association Center for Best Practices Issue Brief, January 8, 2004.
- “State Wage Pass-Through Legislation: An Analysis,” PHI Workforce Strategies, No.1, April 2003.
- “Paying for Quality Care: State and Local Strategies for Improving Wages and Benefits for Personal Care Assistants” Dorie Seavy, PhD and Vera Salter, PhD, PHI, October 2006.
- "State legislation regarding wages and benefits of home care workers: Thirteen promising practices," Alice Wong, H. Stephen Kaye and Robert Newcomer, Center for Personal Assistance Services, July 2007.
