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IV. How States Are Using ARPA
The American Rescue Plan’s investments in home care are beginning to show results. Forty-six states and DC are using ARPA dollars to improve home care worker compensation through wage passthroughs, hazard pay, bonuses, temporary and permanent increases, training, and benefits. Thirty-four states are making special payments such as bonuses; 18 states are providing temporary wage increases; 12 states are making wage increases permanent; and five states are increasing benefits (see table 1). Though some data in the table is “unspecified,” as it was not mentioned in the state plans, this provides an overview of how and when the money was distributed.
The most common way that states are increasing home care worker compensation using ARPA funding is through special payments, such as a one-time spot bonus. For example, Iowa provided a one-time $2,500 bonus per employee. Louisiana increased pay by $100 per month per worker. Three states provided transportation benefits and one provided childcare benefits.
In addition, 11 states are using ARPA funds to increase home care worker wages permanently. For example, Illinois increased the Direct Service Professional rate by $1.50 per hour. Colorado now guarantees a home care wage of $15 per hour. These could be administered in a variety of ways, whether through a wage passthrough, as North Carolina is hoping to do (use a certain percentage of the increased funds must be spent directly on wages) or, as mentioned above in Illinois and Colorado, by specifying a new wage that workers are guaranteed.
Other states are using a combination of incentives. For example, Nevada provided $500 retention bonuses and a 15 percent temporary wage increase for personal care and adult day health care services.
Several states made investments specifically tied to recruitment, retention, or quality-improvement initiatives. For example, Maine provided a $1,500 recruitment incentive and a $2,000 retention bonus for Direct Service Professionals (DSPs). In addition, Utah increased pay by 5 percent for high performers on quality incentives. Minnesota increased wages for Personal Care Assistants (PCA) by 9.7 percent and reinstated a kin-care program that reimburses people who provide home care services to a member of their own household.
More workers will see increases to compensation as the Centers for Medicare and Medicaid Services (CMS approves state spending plans.
Additionally, as the map above demonstrates, investing in the home care workforce enjoys robust bipartisan support. The diversity of states showing leadership on this issue lays a strong foundation for future investments, with communities across the country eager for resources to provide excellent care for older adults and the disabled residents.
Policy Design Recommendations Based on Early Results
Early results suggest that future legislative design tweaks could speed implementation of future home care investments. Specifically, federal legislation can help higher wages reach home care workers faster by encouraging states to set higher base rates, ensuring that funding reaches workers quickly and effectively. States could be required to examine rates and determine if they are sufficient to sustain this workforce, as currently, it is unclear if wage increases will be sufficient. Additionally, making pay increases permanent (as opposed to relying on temporary increases) would help bolster this workforce for the long-run, as opposed to temporary measures that will run out.
State Implementation Spotlight: Colorado
Setting a New Base Wage Speeds Implementation
When new federal funding arrived from the American Rescue Plan, Colorado was ready. A multi-year collaborative effort to create and implement a strategic plan to revitalize the home care workforce meant that key infrastructure was in place, easing implementation and the speed with which workers felt increases. As a result, Colorado was able to use ARPA funding to guarantee a wage of at least $15 per hour, which will benefit approximately 35,000 home care workers.
“When we were first sitting down and trying to wrap our mind around both the timing and the money, we identified the home care workforce as the biggest priority,” said Colin Laughlin, deputy office director, Office of Community Living, Colorado Department of Health Care Policy & Financing.
Several design aspects of the Colorado plan eased implementation:
Existing Strategic Framework: Colorado’s success in getting dollars to workers quickly began years earlier. Before the pandemic and before ARPA funding became available, Colorado honed in on a strategic plan for home care focused on strengthening the workforce and enhancing rural sustainability. With a strategic framework in place, Colorado was able to focus on implementation as soon as more federal funding became available. “Our first priority was getting the money outlet as quickly as possible,” said Laughlin.
A Higher Permanent Base Wage: Instead of a traditional pass through focused on individual agency discretion, Colorado structured their increase in home care compensation as a rate increase, in the form of a new base wage.“What we had experienced in the past was that pass throughs, while really well-intended, often could be administratively burdensome,” said Laughlin.
By the time ARPA was enacted, Colorado had already implemented two wage pass throughs: one in 2018 through House Bill 18-1407 which raised wages for certain home care workers, and another thorough Senate Bill 19-238, which provided an additional 8.1 percent in wages for workers providing certain types of care. This structure required reporting for two distinct buckets of money, creating administrative hurdles. Colin Laughlin said, “And that wasn’t just for the agencies. It was also administratively burdensome for some of the workers, trying to track what was what and the difference between certain clientele.”
When ARPA funding became available, Colorado took a different approach. “We decided [the way] to make an impactful difference as quickly as possible, was just to establish a new base wage,” said Laughlin. After surveying the home care field nationally, and in communities across the state, Colorado set the new base wage at $15 per hour. This enabled the funding to move quickly to workers. Colorado will use ARPA funding to pay for the first 18 months of the new base wage. After that, they will pay for the wage increase through traditional reimbursement policies and matches through Medicaid. A bill is already making its way through the legislature to provide this funding, and ensure there will not be a “cliff” once ARPA funding ends.
Sustainability: More broadly, Colorado is strengthening the home care workforce by working to improve career paths. “This can be a career,” stated Laughlin. The state wants standardized training so that home care workers can earn specialized credentials for caring for different kinds of clients, such as those with brain injury, or dementia. The state is working across agencies to create professional pathways so that home care is seen as the first step in a long-term career in health care.
Data infrastructure: “Most people will leave this industry within two years. And so how do we extend that?” Colorado is investing in data infrastructure to understand the impact of the ARPA funds. The state has allowed for flexibility, encouraging agencies to increase wages beyond $15/hour for workers who were already making near that amount. The state will use surveys, interviews, and quantitative analysis to assess wages before and after the new base wage went into effect.
Publicity: When people are considering Starbucks or a service industry job but are “passionate about making a difference in the world,” Laughlin says Colorado wants home care to be at the forefront of job seekers’ minds. “A lot of people when you say direct support or home care professional, they don’t know what you’re talking about. So we also knew we needed to do some work to publicize exactly what this work was.”
Early in the pandemic, the state started a website to serve as a clearinghouse for people to find jobs with various organizations. They are looking to expand it. “We need to make sure there is a way for people to advance into that work.” On the new website, Colorado wants employees to be able to “access the free trainings. They can get themselves trained to access those new jobs. And they can search by area or expertise or type of background that they have. And so really establishing that training and connecting that to career pathways. All of that can lead to a better and more sustainable workplace.”
Recommendations for Future Interventions
Colorado’s experience provides clear takeaways for other states.
First, states’ program design choices can get funding to workers more quickly. Colorado’s decision to increase worker compensation by setting a new permanent base wage helped to ensure that increased federal funding went to home care workers faster than if the state had simply set a higher home care agency reimbursement rate. For example, Colorado’s approach contrasts with other states, such as Florida, where home care agencies had to apply for funding, describe how they would use it, and then distribute it to the workers. By cutting through these levels of implementation, workers in Colorado saw a sizable wage increase fast.
Second, improvements in compensation need to be permanent. Any wage increase is useful, but to have a long-term impact on the industry and to ensure care for the future, wage increases must be long term and regularly updated. Colorado, as well as states with higher wages, such as Washington state, demonstrate that when states prioritize this workforce state budgets can accommodate the expenditure.
By focusing on permanency and clear, easily implemented increases in base wages, Colorado has taken an important step in bolstering the care workforce and ensuring its sustainability in the long run. As additional federal funding is debated, following this model of implementation would make sure money is distributed quickly and efficiently to those it is intended to serve.
Table: State by State Increases in Home Care Compensation through ARPA
What Increases in Compensation Mean for Workers
For home care workers who received a recent bump in compensation, help could not have come soon enough.
Kate Jones in Parkersburg, West Virginia, received an incentive bonus just before Christmas in 2021:
“They told us if we didn't call up for the whole month of November each week, you got a hundred dollars extra that week and then [the] same way for each week. And then if [you] didn't call off all four weeks, you got …another hundred [dollars]. So you got the potential to make $500 bucks. That was very helpful. Right before Christmas. Definitely.”
Jones began working in home care three years ago after her divorce. She makes $10.25 per hour with no benefits as a contractor with a private home care agency. Jones herself has a disability, which sometimes makes working difficult. However she enjoys being a home care worker. “It is just amazing to feel needed.”
With the extra money, Jones says, “I was able to pay some extra on a bill and I was able to buy some Christmas gifts with it. And then I saved some [because] I knew I was going to need two new tires in January.” She ended up needing four new tires and a new battery. “So that was all $580, but I had some of that money from the bonus where I saved it, because you know, you never know what's going to happen. It definitely helped.”
Denzel Norwich in Kenova, West Virginia, also got higher wages through the American Rescue Plan. “This money was given to the company and they were permitted to distribute this money any way they wanted to. They were permitted to take the money and give it to the employees in one lump sum,” Norwich said. “[If] you don’t miss any days, you come to work on time, and so on and so forth, then you do get the extra $3 on the hour. Which is really nice, but how long is that going to last?”
State Spotlight: Minnesota’s Family Caregiver Program
In Minnesota, Andrea Hanek, cares for her three children with disabilities through Minnesota’s Personal Care Attendant Choice Program, a new family caregiver program which allows people providing home care in their own household to receive reimbursement for their work. Hanek’s children, ages 9, 10, and 17, need assistance with activities of daily living.
Before this program, Hanek said she and her family were living “so poor.” “I didn't even know how little money I had. I mean, I didn't even know … I was getting no essentials before. I was having to do food shelf [at] every opportunity. Like I was counting down the days to do food shelf.” The family care program passed, it was just before Christmas 2020 and provided funding through February 2021. American Rescue Plan funds enabled it to be reinstated in August 2021.
“When this got passed [and] we were able, because of the pandemic [funding], to have this. . . I have to say it was like one of the best Christmas presents I've ever gotten,” said Hanek. “It happened shortly before Christmas. It really has been a life changer. I mean, it really has changed so many things in my life.”
Sumer Spika also benefits from Minnesota's new family caregiving program. In addition to working as a home care worker and a union organizer advocating for home care workers, Spika provides home care for her husband, who has multiple sclerosis (MS). Like Andrea, she also began receiving reimbursement for her work through Minnesota’s Personal Care Attendant Choice Program, including the extension funded through ARPA.
“Before we got this ARP money, I was not able to get paid for caring for [my husband],” Spika said. Before the program, she said the prevailing view was that you were on your own if you were caring for a family member. “Unless they're on a specific program, the government says 'well, it’s your moral obligation to take care of these folks, even if you can't work a full-time job, so why should we pay you?'” said Spika. Under the new program, “it's been pretty amazing to be able to get paid for some of the work that I'm doing even though it's in my own home.”
In July 2022, home care wages in Minnesota will increase from $14.40 to $15.25 under a new union contract. Talking about what the increase will mean, Spika said, “I am very privileged” because “I'm in a position where I'm working multiple jobs. So for me it just means like a little more. Maybe I can put a little more money into my life insurance plan, or maybe I can set a little money aside to maybe take my kids on a vacation this summer.” She said that “for most people doing this work, it [means] much, much more.”
The upcoming wage increase will begin just in time for Hanek and her family. “School supplies … that one hits me hard every year. It comes out of nowhere,” she said. “You have to have a nice pair of shoes for gym shoes and to start the school year and you have to have boots and rain boots. Hopefully that will help.”
Recommendations for Future Interventions
- States can enhance family economic stability and access to care by ensuring that workers who provide home care to people in their own household are eligible for reimbursement.