Orrin Hatch: “I would like to ask the bill's proponents about one serious ramification of a minimum wage increase, that is, the effect…”

“I would like to ask the bill's proponents about one serious ramification of a minimum wage increase, that is, the effect this increase will have on the Medicaid Program. Almost one-half of Medicaid dollars are spent in long-term care, primarily for the elderly. It stands to reason that an increase in the minimum wage will affect all health care providers, including those who are providing care under Medicaid. Nursing homes are large employers of minimum wage workers. They employ significant numbers of nurse aids, orderlies, food service, and housekeeping staff who all contribute to the care of nursing home patients. Labor costs account for about 60 percent of all nursing home costs. However, unlike other businesses, the nursing home industry is unable to reduce its staff. The level of care that is required both by internal quality standards and by Federal regulations means that nursing home staff, particularly those individuals who are directly providing patient care, cannot be reduced. In short, nursing homes are caught in a catch-22.”