Home Care Rates to Increase by 50% for Millions of Seniors if New Government Policy Passes

DOL proposed change could cost seniors an additional $10,000 per year or more to remain independent

MARCH 20, 2013 – When it comes to a new piece of legislation that will affect the cost of home care in America, it is the overtime pay – not the minimum wage – that could cost American seniors and the disabled their independence, according to the home care industry. The proposed rule change currently under consideration by the U.S. Department of Labor (DOL) would force caregivers to begin charging overtime for hours worked over 40 per week. This could cost the average senior an additional $10,000 per year, or more.

“The problem we see is that charging overtime could force seniors and the disabled who use these services – many of whom already have limited and fixed incomes – to forgo the quality of care they deserve, or worse, to leave their homes because they cannot afford to stay,” explains Jim Mark, president of the Private Care Association (PCA), the voice of the private duty home care industry since 1977.

As it stands today under the Fair Labor Standards Act, the Companionship Services Exemption (CSE) allows a caregiver to care for one senior or disabled individual for an extended period without the senior/disabled being charged overtime. In April, the DOL intends to finalize regulations that will narrow the CSE, requiring overtime compensation for companionship services. 

This could significantly affect the independence of millions. A study funded by the Urban Institute showed 6 million people ages 65 and older require some form of long-term care, and it is estimated that number could grow to 21 million seniors by 2040 as the baby boomer generation ages (from Long-Term Care for the Elderly, by Robyn Stone; Urban Institute Press). According to data from the Bureau of Labor Statistics, seniors and disabled individuals who have in-home care today pay an average of $20 per hour. Many need more than 40 hours of care each week, anywhere from 12 to 24 hours per day. Requiring overtime pay amounts to an additional $10,400 paid by seniors/the disabled each year.

The breakdown:

To remain independent, if the senior/disabled person cannot pay the $10,400 a year to keep the caregiver to whom they have become accustomed, he or she will be forced to rely on multiple caregivers each week to avoid overtime. In turn, both caregivers and their clients will be affected – consumers will lose the important “continuity of care” that makes so many of these relationships work, and caregivers may be forced to seek additional work/clients to make ends meet.According to the National Council On Aging (NCOA), more than 23 million Americans age 60+ are considered “economically insecure,” with incomes at or below 250% of the federal poverty level, making this potential increase in pay is a substantial percentage of seniors’ income going to in-home care.

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Contact on behalf of Private Care Association

Amy Ferguson 504-343-7536 or amy@fergusonfreelance.com

Meri Monsour 504-484-3442 or meri@hmadvertising.com

Since 1977,the Private Care Association (PCA) has been the voice of private duty home care. PCA's membership is made up of home care registries that refer self-employed caregivers to provide assistance with activities of daily living such as bathing, dressing, lifting/transferring, continence care, feeding/meal preparation, companion care, homemaker services and nursing services in the client's home. The PCA has an involved government relations program that actively presents its position to public policymakers at the state and federal levels. As the national voice for home care registries, the PCA continues to expand its membership and develop a greater capability to promote the interests of the private duty home care industry, advocating the consumer-directed model of care, and consumer choice. www.PrivateCare.org

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