Home care agencies serving Medicaid patients are in a catch-22 with the current inflation rate and the higher cost of everything these days. On one hand, the critical services these agencies provide in Colorado communities have never been more needed. The most vulnerable among us are often hit the hardest when times get tough, and the invaluable services provided by home care workers help to keep Colorado’s Medicaid patients safe and healthy in their homes. On the other hand, the cost of providing these services has also never been higher, while the reimbursement for these services has not yet been adjusted by the Colorado Legislature to keep pace.

If home care agencies can’t cover the multitude of costs that go into delivering safe and effective Medicaid care under current reimbursement rates, how will they be able to continue serving patients? The reality is, they may not be able to. Agencies are quite literally being squeezed out of Medicaid – with the fate of patients and caregivers alike hanging in the balance.

The solution? The state needs to ensure reimbursement rates for Medicaid providers keep up with inflation and the rising costs of expenses that are inherent in delivering Medicaid services in the home – including the need for these agencies to provide competitive compensation for hard-working caregivers. These workers are also struggling with the high cost of living.

It isn’t only the state’s Medicaid population that stands to lose. Taxpayers also have a lot at stake. Extensive research demonstrates the lower costs for at-home services provided through Colorado Medicaid programs such as Home and Community-Based Services waivers. According to the U.S. Department of Health and Human Services, average monthly spending for Medicaid clients under these waivers was $485 per month, compared with an average monthly spending per Medicaid-covered nursing home resident of $2.4K. That’s a staggering difference. According to HHS, by investing in home and community-based services, Colorado is among the states that likely has avoided building nursing home beds that otherwise would have been built. If provider agencies are squeezed out of providing these cost-saving services, Colorado taxpayers will be the ones forced to foot the bill.

When the COVID-19 pandemic hit, home care and personal care workers were among Colorado’s frontline essential workers. In many ways, they were the unsung heroes of the pandemic, going into patients’ homes to perform essential daily tasks. They were helping people with intellectual and developmental disabilities, physical disabilities and mental illnesses. They were helping children, adults and seniors. Their work allowed people to remain living with dignity in their own homes and communities, rather than in an isolated institutional setting where the staff were overwhelmed and COVID had everyone in lockdown. The need for those services continues.

Home care and personal care workers help with everything from administering health care services, to helping people stand and walk, to helping with nutrition, bathing and toileting. This is hard work that needs to be done, and that deserves to be fairly compensated.

Never before has it cost so much to operate a business. Just like all businesses, home care agencies must pay the higher costs for standard expenses such as rent, utilities, insurance and payroll. They also face additional expenses that come with providing medical care and servicing Medicaid clients – ensuring proper compliance, staff training and health privacy and security measures.

There is fierce competition in the field of health care for skilled nurses and medical providers. Home care agencies compete with hospitals, nursing homes and other institutions for staff.

There is also fierce competition for other home care workers. Home care agencies must compete with businesses like McDonald’s, Amazon and Starbucks for workers who are facing tremendous inflationary pressure on their personal finances. Without the ability to pay higher wages, these agencies risk losing skilled workers.

Providers in the City and County of Denver also have to contend with a minimum wage that is among the highest in the country – ahead of even Washington, D.C., New York City, San Diego, Chicago and Los Angeles. Beginning in January, the minimum wage for work performed in the City and County of Denver will increase to $17.29 per hour. And per local ordinance, Denver’s minimum wage will only go up from there.

This is great news for hard-working Coloradans employed by home care agencies – workers who themselves are struggling to keep up. Inflation this year has made history, and we’re all aware of higher gas and grocery costs.

At the same time, as Mayor Michael Hancock, a sponsor of Denver’s minimum wage increase ordinance, said, “we know this will put additional burdens on our local businesses.”

And that’s exactly what most of Colorado’s home care agencies are – local businesses.

We want what is best for Colorado’s Medicaid population and for the individuals who have answered the call to help them. What does the future hold for these patients and workers? That’s a question only the Colorado Legislature can answer.

Don Knox is the executive director of the Home Care and Hospice Association of Colorado.