Paid family, medical leave: An unfunded mandate?

The New Mexico Association for Home & Hospice Care represents home care, hospice and personal care service providers at almost 150 locations across the state who provide care to over 56,000 New Mexicans in their home each year. These providers, by and large, are either reimbursed by Medicare or Medicaid, which is important to note as we are rate takers, not rate setters.

We provide patient-preferred and cost-effective care. Based on age and health status of patients served by our providers, we support the oldest and some of the most vulnerable New Mexicans.

We are a part of the state’s critical safety net. And we are in crisis. This crisis is driven, in large part, by a series of unfunded or underfunded mandates enacted by the state over the past five years.

The Legislature has a habit of focusing on bills in silo without considering whether they create an unfunded mandate for our safety net providers. As a prime example, since 2019 the New Mexico minimum wage has increased from $7.50 an hour to $12 an hour, a 60% increase. However, Medicaid reimbursement rate increases have only recognized the cost of the increased minimum wage but have not recognized the corresponding increases such as FICA, Social Security, unemployment taxes and worker’s comp, not to mention corresponding increased overhead costs.

While reimbursement rates were increased by $4.50 an hour, based on our association’s own rate study, costs, driven by the state, increased for providers during that same time by $7.54 an hour. We are short almost $3 an hour every time we provide care. Minimum wage is just one of many examples, which also include electronic visit verification, destination-based gross receipt taxes, and paid sick leave where state-enacted policies don’t consider the impact on our safety net providers.

In spite of these mandates, providers are doing their best to keep worker wages competitive, develop family-friendly policies and create a work environment that attracts and keeps a critical workforce. But time and time again, providers are forgotten, their costs not fully recognized.

Year round, our association works with the state and we go to the Legislature to bring to light the challenges these underfunded mandates pose to our industry. However, these concerns have largely fallen on deaf ears, just as they are, again, in this paid family medical leave policy discussion.

House Bill 11 addressed the biggest concern our industry has with creating a paid family medical leave benefit; it does not create an unfunded cost to our Medicaid providers. The cost to the employee is the same as the alternate, meaning it is not any more expensive for our employees either. But House Bill 6 creates yet another mandate for our industry with no guarantees that it will be funded.

We fully recognize the need to have competitive wages, to have family-friendly benefits and the critical importance for caring for people in their home. However, we are already inadequately funded. The state cannot add benefits by increasing costs to our Medicaid providers. We cannot afford it.