Health Care Reform’s Effect on Homecare

Many provisions of the Patient Protection and Affordable Care Act (commonly referred to as “health care reform”) will come into effect in January, 2014. According to a report by William B. Eck, an attorney and shareholder for Greenberg Traurig LLP, “the affordable health care act is expected to reduce Medicare spending on home healthcare services by $4.2 billion by 2014 and over $39.5 billion by 2019.”

Starting Jan. 2014, companies with over 50 employees will be charged a $2,000 fee for not offering full-time employees with health insurance. Currently, there are over 1,700 home health care agencies around the country and the majority do not offer healthcare to the caregivers. Online-based companies, like CareFamily, allow families to employ caregivers directly, and thus do not fall under those provisions of the health care reform. CareFamily will not have to adjust its fee structure to accommodate reform.

Towards the summer, agency prices will increase to prepare for the healthcare reform, according to Tom Knox, president and CEO of CareFamily. Senior care agencies will have to raise prices to accommodate the new health care standards. He predicts that rates will increase $1 or $2, “but closer to two,” he said.

Senior care agencies will have two options: to offer health insurance to caregivers working 30 or more hours a week, or to hire more caregivers per client. Many agencies will opt to hire more caregivers part-time. A client requiring 24 hour care may have eight to ten different caregivers each week instead of three to four. Patients with Alzheimer’s disease and dementia need structure, familiarity and consistency, according to These patients would have a hard time adjusting to the different routines, schedules and habits of the separate caregivers.

Caregivers who have their hours cut will have to get other part-time jobs to make up the lost hours. According to AARP, the reform law is using $4.2 million to train over 5,100 new home health care workers in six states this year.​