Albany Times Union, Sunday, October 2, 2022

It’s just heartless greed

Some insurance companies may be pocketing money meant for raises to alleviate a critical shortage of home care workers.

To comment: TULETTERS@TIMESUNION.COM

New York has a desperate shortage of home care workers to take care of sick, disabled, and frail people. Recognizing that dire situation, state lawmakers and Gov. Kathy Hochul put $7.7 billion in the state budget for wage increases to help retain and attract these vital employees.

But now it looks like hundreds of millions of dollars of that money may end up going to insurance companies that are keeping it for themselves.

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It’s a level of greed and opportunism in the face of a crisis that ought to shock the sensibilities of the governor and Legislature. And Attorney General Letitia James should look into whether there’s a civil or criminal case to be made here. Even it it doesn’t rise to criminality, it’s as offensive an abuse of public funds as the rampant fraud we witnessed in the false claims for unemployment benefits early in the COVID-19 pandemic.

As the Times Union’s Rachel Silberstein reports, the money was supposed to support minimum-wage increases of $2 an hour this year and $1 an hour next year. The increases were slated to start Oct. 1.

But some private insurance companies, in negotiations with home care agencies, are offering only 20 cents to 50 cents more an hour in reimbursement rates. The New York State Association of Health Care Providers says that as of last week, the vast majority of home care agencies reported no insurance companies even talking to them about raising reimbursement rates. Some even want to decrease rates.

The result, then, would be even worse than if the state had offered no new money at all. Because providers would have to pay more per hour but not be made whole by the insurance companies, they’d likely have to cut staffing and overtime pay and turn away clients insured by companies that won’t cover the wage hikes.

Certainly this sounds immoral, and it may not be legal. The state Department of Health says that under federal rules concerning how much money from premiums insurers and managed-care organizations have to spend on direct care, they can’t keep the state funds. The department intends to reinforce that message.

State leaders should deliver a message of their own — that keeping these public funds from getting to the workers is an egregious breach of trust. It’s not just about the pay, but about the health of an industry that so many vulnerable people depend on. Insurance companies are not just shortchanging the providers, they’re thwarting an important public health initiative.

Capital Region lawmakers — state Sen. Neil Breslin, D-Delmar, who heads the Senate Insurance Committee, and Assemblymen John T. McDonald III, D-Cohoes, and Phil Steck, D-Colonie, both members of the Assembly Insurance Committee, should call on their respective committees to convene and demand insurance executives come to Albany and explain themselves. And they should work with the Hochul administration to develop, if necessary, any new laws to force insurers to pass the money on, and retroactively pay anything they failed to do. And a penalty, if possible, might help drive home the point.

In the meantime, we offer some simple, clear, nonbureaucratic advice to the insurance industry: Do the right thing.