The Highs and Lows of the Home Health Care Sector

As baby boomers approach and live past retirement age it is no surprise that significant demands will be placed on every industry associated with caring for the elderly. This includes the increased demand for in-home health care accompanied by a reduction in the available supply of workers in that industry.

One important hallmark of “boomers” is that they want to remain in their homes for as long as possible. Segments of the home improvement industry are now devoted to what is known as “aging in place” to stay on par with this trend. These professionals retrofit homes making them safe and comfortable for seniors.

Aging in place is also an attractive fiscal option to the homeowner, Social Security and private insurers. The reason for this, is the extreme cost differential between providing care services in the home versus most other living/care options. Another aspect of aging in place that must be considered is that qualified in-home care will become necessary for many. Seniors, especially those living alone, may need help to maintain their independence.

That independence can place strains on the senior’s family. A recent Wall Street Journal article estimated that 60 million adult Americans spend some time helping with the care of an elderly relative living at home. Many families and other caregivers eventually decide that they need professional assistance because they have their own families, careers etc.

These trends have not gone unnoticed. The US Bureau of Labor’s (USBL) statistics estimate that between now and 2022 the home health care field will expand by more than 50 percent. However, this expansion in the work force is accompanied by real concerns. Foremost is the fact that the home health care industry currently has a turnover rate between 40 and 60 percent. This frequently occurs because of the low salary paid to in home care workers. Their average annual salary is approximately $20,000. That figure is almost 25 percent less than others working in different areas of health care support. The main reason for this disparity is that approximately three-quarters of the funding for the home health care sector comes from Medicare, Medicaid and other government agencies.

The Fair Labor Standards Act will apply to home health care workers employed by agencies  and other third parties, and hourly wages will begin to increase in 2015. This significant change means these workers will earn at least minimum wage and will be guaranteed overtime when applicable. However, the Act will not apply to private workers hired by families.

How the issues stemming from home health care will eventually be resolved is an open question. The next several years appear to present a collision course between skyrocketing demand and low wages resulting in a huge turnover in an industry that’s vital to the well-being of many Americans.

Questions about home health care or other elder law issues? Contact the attorneys at Abraham and Bauer, LLC.

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