Minimum wage increase could challenge providers

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In a move likely to affect many long-term care providers, Congress has voted to increase the federal minimum wage rate - the first increase in a decade.

The measure, which the House approved overwhelmingly as part of a deal on Iraq spending, would raise the minimum wage to $7.25 an hour from $5.15 in three stages over two years. The bill also includes $4.8 billion in tax breaks for small businesses.

Provider groups have voiced concern that raising wage rates could make it harder to compete in the marketplace for direct caregivers. This, in addition to proposed funding cuts for nursing homes, poses a potential burden for providers, experts say. The president said he would approve the bill.