Deep Medicare Cuts Exacerbating the Employment Challenges Facing Women

Washington, DC – According to the March jobs report from the Bureau of Labor Statistics (BLS), jobs in the home health sector continue to be impacted by recently-imposed Medicare home health cuts. Since implementation of the cuts began on January 1, the nation’s home health community has witnessed a significant decline in job growth. With women occupying the vast majority of home health positions, this impact is exacerbating the employment challenges that women face. According to BLS, the number of unemployed women reached 4.85 million in March.

A provision in Section 3131 of the Affordable Care Act (ACA) authorized the Obama Administration to modify Medicare home health reimbursement by an amount not to exceed a 14 percent increase over 4 years or a 14 percent reduction over that same period of time. Despite this significant discretion, the Administration elected to impose the deepest cuts allowable under the ACA and, on January 1, initiated implementation of Medicare home health funding cuts of 3.5 percent annually over the next four years (2014-2017), for a total cut of 14 percent. Recognizing the severity of this cut, the Administration noted in its final regulation that the cut would drive “approximately 40 percent” of all home health agencies into net loss by 2017, which lawmakers, senior advocates and home health leaders have been warning for months would lead to closures and job losses.

Historically, home health has been a reliable source of job growth in the nation’s healthcare sector, due to seniors’ preference to receive medical treatment in the safety and familiarity of their own home. As shown below, the home health sector experienced average annual job growth of 5.41 percent during the 120 months preceding the Administration’s issuance of the Medicare home health rebasing cut on November 22, 2013. Since the Medicare rebasing cuts were issued, however, the home health sector has experienced a sharp reversal. In fact, the average annualized job growth in home health jobs was four times higher before the rebasing cuts were announced. In December 2013, BLS reported the loss of 3,100 home health jobs and in February 2014, BLS reported the loss of another 3,800 jobs – the largest job loss experienced by the sector in more than a decade. According to analyses by Avalere Health, more than 498,000 home healthcare jobs could be lost by the time the full 14 percent cut takes effect.

This impact is expected to disproportionately impact women. According to data analyses by Avalere Health and Dobson DaVanzo & Associates, the vast majority of Medicare home health professionals are women. In fact, an estimated 90 percent of registered nurses, occupational therapists, and home health aides – professionals that are commonly employed by home health agencies – are women. As a result, the vast majority of the jobs that are being lost and the job growth that has been stymied impact female healthcare professionals.

“Despite the broad discretion granted to it by Obamacare, the Administration decided to impose the deepest possible cut, which is already having a dire impact on jobs, women and vulnerable seniors,” stated Eric Berger, CEO of the Partnership for Quality Home Healthcare. “Without relief, these Medicare cuts will continue to impact the home health professionals upon whom millions of the Medicare program’s most vulnerable seniors depend.”