AUGUSTA — A commission that studied the labor shortage at agencies that help elderly Mainers live at home is recommending the state mandate that “direct care workers” be paid at least 125 percent of the minimum wage.

Raising wages could draw more workers into a critical field in a state with the nation’s oldest population. But it would also carry a hefty, but not yet known price tag for the state because MaineCare reimbursement rates would have to increase.

Leaders of the Commission to Study Long-term Care Workforce Issues said the reimbursement rate increase – and more than two dozen other recommendations – are needed to address a staffing problem that is “beyond urgent.”

Underscoring those concerns, an Augusta-area nonprofit that provides in-home care to nearly 600 senior citizens announced this week that it will close on April 30. Home Care for Maine singled out low reimbursement rates as a key factor in that decision, which will also affect nearly 400 employees.

“This a major problem that is affecting families in every corner of the state and make no mistake: This is a problem that affects the entire family, not just the person that is receiving care,” said Sen. Erin Herbig, D-Belfast, co-chair of the commission. “The problem is just getting worse, and it will continue to do so unless we do something, which is why we ask the entire Legislature to support the recommendations.”

The commission also recommends creating a rate-setting commission independent of the Maine Department of Health and Human Services, and that the department take into account employer costs for minimum wage increases, paid time off and electronic visit verification equipment.

Other recommendations include more aggressive worker recruitment and training, making direct care workers eligible for student loan repayment, allowing family members to serve as paid caregivers, and creating an oversight committee to ensure the recommendations are implemented.

On Tuesday, a legislative committee voted unanimously to move forward with a bill that would require direct care workers be paid 125 percent of the minimum wage and create an oversight committee.

The Health and Human Services Committee will hold a public hearing on the bill at a future date but would also have to get funding approved by the Appropriations and Financial Affairs Committee.

Commission members noted that several of the recommendations were included in a 2010 report from a similar task force, but were never implemented.

“We need to keep an eye on this to make sure this isn’t going to happen again and that those recommendations are acted on . . . and that this time the recommendations won’t just sit on a shelf,” said Rep. Jessica Fay, D-Raymond.

With a mean age of 44 years old, Maine has the nation’s oldest population and is expected to experience worker shortages in many fields in coming decades unless the trend is reversed.

To illustrate the looming crisis, the commission’s report pointed out that Mainers over age 65 already accounted for 25 percent of the population in two counties in 2016. By 2026, those 65 or older will account for one-quarter of the population in 14 counties, and in all 16 counties by 2036.

DHHS estimated that 52 percent to 70 percent of individuals turning 65 today will eventually require assistance with daily living.

Maine has taken several steps to address the crisis, including providing additional funding to support direct care workers who help elderly or disabled Mainers live at home. But lawmakers have also enacted other policies that have contributed to the direct care workforce shortage.

Maine’s minimum wage has increased 60 percent in four years – a jump that meant many long-term care workers saw their wages also jump from $7.50 to $12 an hour. But while lawmakers also approved reimbursement rate increases and budgeted additional funding, those increases have failed to cover rising wage and other costs paid by employers.

Commission members heard during their meetings that the current reimbursement rate for “direct support professionals” of $27.72 an hour only provides about $11.20 for wages after accounting for benefits, taxes, training, administration and other expenses.

Another challenge is attracting workers to the industry. Maine’s extremely low unemployment rate means workers can make the same or more money working at a big-box store or in retail jobs that are less physically and emotionally demanding.

Mollie Baldwin, former CEO of Home Care for Maine, said supporting Maine’s elderly through long-term care should not be a partisan issue. Not only are the health outcomes better for seniors who live at home, it is also typically costs less than institutional care.

Baldwin “new mandates and new policies that have been made with the best of intentions” are seriously impacting home-based care agencies’ ability to stay in business. The minimum wage increase, new electronic equipment to meet new regulations and paid time-off mandates were not adequately incorporated into reimbursement rates.

“These new mandates cost money and someone has to be willing to pay those costs, otherwise our home-based care system will be permanently damaged,” Baldwin said Tuesday during a press conference.

It is unclear how much paying direct care workers 125 percent of the minimum wage would cost the state in reimbursement rates.

Last year, the Legislature passed a much narrower bill to raise reimbursement rates to 125 percent of the minimum wage for direct care workers who serve adults with intellectual disabilities or autism. But that bill never made it out of the budget-writing committee because it would have cost more than $3 million a year.

A sweeping bill that died during the 2017-18 legislative session would have increased wages for all direct care workers.

Thousands of Mainers have been stuck on wait lists – sometimes for years – for home-based care and other services funded either through Medicaid or state programs.

In 2019, DHHS reported nearly 800 elderly people or other adults were waiting for in-home or support services aimed at keeping them in their homes. Another 1,800-plus individuals with autism, brain injuries, intellectual disabilities or similar conditions were on wait lists for home-based or community-based care.

Yet even who are receiving services may not be getting everything that they need or qualify for because there are not enough workers or group home providers. DHHS reported more than 11,000 “unstaffed hours” among registered nurses, personal support care professionals per month last year.