SB 525 would devastate health care for the state’s most vulnerable

OPINION – California’s population age 65 and greater will nearly double by 2030, increasing by 4 million. People are living longer than ever before, and as a result, more people will need assisted living and skilled nursing services.

Senate Bill 525 directly threatens our ability to care for this growing population by forcing additional costs on care providers.

Senate Bill 525 would significantly increase the minimum wage for all employees working in any health care facility (including assisted living and skilled nursing) to $25 per hour, with annual increases thereafter. A recent economic study found SB 525 would increase costs for public and private health providers by $8 billion annually beginning in 2024, increasing to more than $11.3 billion by 2030. This immediate, unfunded mandate will impose insurmountable operational costs on long-term care providers, threatening the critical services they provide and potentially leaving residents without access to care.

Nonprofit providers cannot absorb this drastic and sudden increase which could force a reduction or discontinuation of services.

At Channing House – a trusted community partner providing senior living and health care services to older adults in Palo Alto since 1961 – we provide assisted living, skilled nursing, and more. We are proud to provide high-quality care while embracing respect and dignity for all who live and work here.

We serve 250 residents who all have unique needs, and a reduction in services will have devastating effects on the health and well-being of those who need care the most. We have a dedicated team at Channing House who are committed to supporting residents as they age and their conditions change whether it’s frailty, illness, or dementia. This mandate would not improve services, but force service reductions.

Senate Bill 525 directly threatens our ability to care for this growing population by forcing additional costs on care providers.

Providers that serve older adults throughout the state are still reeling from the pandemic, struggling with staffing shortages and worsening financial conditions, all while the demand for older adult services continues to increase, especially for low-income and underinsured communities.

As the need for staffing increases to meet the growing demand for services, SB 525 will reduce employment opportunities as providers consider cutting back services or worse, close, threatening access to long-term care services for millions of vulnerable Californians.

Senate Bill 525 would not just impact older adult services. The mandate would affect all health care providers at a time when many clinics, hospitals, and family and primary care providers are also facing financial hardships.

Health care workers deserve to be fairly compensated for their work. However, this bill does not consider the necessary mechanisms to achieve that goal like increased reimbursement rates. Instead, it poses devastating implications for our health care system. We urge lawmakers to reject SB 525 because it jeopardizes the stability of providers and would be potentially devastating for millions of older adults across the state. Let’s work together to create workable solutions that improve lives for our health care workforce as well as the older adults they serve.

Rhonda Bekkedahl is the CEO & Executive Director of Channing House, a non-profit skilled nursing facility providing memory care services to 250 adults in Palo Alto.