MONTPELIER — A bill that would increase Vermont’s minimum wage to $15 an hour is idling in a House committee over concerns about whether some Medicaid-funded health care workers should see higher pay if the legislation becomes law.
A discussion that began last week about how to fund Medicaid programs to ensure their lowest-paid employees could earn the proposed minimum wage has become a discussion about giving those workers raises across the board, regardless of how much they make.
The General, Housing and Military Affairs committee is now considering an amendment to the minimum wage bill that would give raises to health care workers who provide care to the elderly and the disabled. Their pay would be hiked over four years, at the same rate that the minimum wage would be increased.
Under the minimum wage bill, the state’s base pay rate for all workers would be hiked from $10.78 an hour to $15 between 2020 and 2024.
Employees at facilities including home health agencies, nursing homes, residential care homes, assisted living residences, and adult day agencies, regardless of their current wage, would see higher pay under the amendment to the legislation.
But the cost of giving the employees raises over five years would be steep: the Joint Fiscal Office estimates it would leave a $27.9 million gap in state funding between 2020 and 2024.
Some lawmakers this session, including Senate budget writers, have made increasing funding for Medicaid programs catering to seniors a priority. Some elderly care facilities haven’t seen increases in Medicaid reimbursement rates for years.
Legislators have pointed out the problem at residential care facilities in particular, where the cost of caring for residents far outweighs Medicaid reimbursement rate. Residential care facilities serve seniors who require some level of supervised care, but don’t need to live in a nursing home setting.
“If we can push this along to aid both better wages for their hard workers and to assist in equalizing the costs to keep a resident in there, that would be my objective,” said Rep. Chip Troiano, D-Stannard, who proposed the amendment to the minimum wage bill.
With a new $15 minimum wage, Troiano said, it also would be important to increase pay for all Medicaid workers to so that lowest-paid workers don’t start earning as much as more experienced employees — a problem known as wage compression.
But Troiano said that after seeing how expensive it would be to raise the wages across the board, he was beginning to see funding the issue as “insurmountable.”
“We could easily abandon the compression wage piece,” he said, noting that the committee likely would reach some sort of compromise on the matter. The compromise simply could be making sure that the lowest paid Medicaid workers earn the new $15 minimum wage, he noted.
Last week, the committee was discussing the Medicaid funding gap that raising the minimum wage to $15 an hour would create. The concern came after the Joint Fiscal Office said the state would need to appropriate, on average, an additional $1.6 million per year to bring Medicaid workers’ wages in line with the policy.
The committee’s chairman, Rep. Tom Stevens, D-Waterbury, said he had hoped to pass the minimum wage bill this week, but now next week looks more likely. He said that, after hearing testimony on the health provider wages on Tuesday, the committee still has “a lot to settle.”
He agreed that workers in the industry should be earning higher wages.
“There’s only going to be more old people for the next 25 years, so we can’t lose this industry,” Stevens said. “So we have to be paying the people who are doing the job more than they get paid at McDonald’s or at a service job or gas station.”
But Stevens said he has yet to decide whether he supports giving raises to all employees at the Medicaid-funded programs. And the less expensive option — providing funding so the lowest earning workers make the minimum wage — is still on the table.