Medicaid Cuts Threaten Home Care Lifeline for Millions
A new KFF issue brief highlights the growing reliance on Medicaid to support older adults aging at home and the potential fallout from looming federal funding cuts. For millions of Americans, Medicaid Home and Community Based Services (HCBS) aren’t just a benefit – they’re the key to remaining independent and avoiding costly institutional care.
The Rising Demand for Home-Based Care
Medicaid now covers approximately two-thirds of all U.S. Spending on home- and community-based services, filling a critical gap left by Medicare’s limited coverage of long-term home care. In 2023, 5.1 million Medicaid enrollees used home care, with nearly 20% being adults 65 and older managing chronic illnesses or disabilities. This demand is fueled by a strong preference among seniors to age in place, supported by their families.
Federal Cuts and State Budget Pressures
The recently enacted “One Big Beautiful Bill Act” (H.R. 1) is projected to reduce federal Medicaid spending by $911 billion over the next decade. States, constitutionally required to balance their budgets, are facing difficult choices about how to respond. Optional benefits like HCBS are particularly vulnerable to cuts.
Alice Burns, Associate Director of KFF’s Program on Medicaid and the Uninsured, notes that the impact of these cuts remains uncertain. Still, reductions in payments and supports for family caregivers could force more older adults into institutional care or place an even greater burden on unpaid family members.
The Impact on Family Caregivers
Medicaid supports family caregivers in multiple ways, including direct payments for care exceeding typical family responsibilities, respite care to provide temporary relief, and even health insurance coverage for caregivers themselves. AARP estimates that over 8 million family caregivers – 13% of the total – rely on Medicaid for their own health coverage.
All responding states allow waiver payments to family and friends providing care, and 44 permit payments to “legally responsible relatives.” These payments are contingent on demonstrating a need, close supervision, and meeting provider requirements.
Workforce Shortages Exacerbate the Problem
The availability of paid home care workers is shrinking even as demand rises. Immigration policies are contributing to the problem, as nearly one in three home care workers are immigrants. Recent reports indicate that restrictive policies have led to some workers avoiding work, further straining the system.
Potential State Responses and What to Watch For
Advocates are concerned that states may respond to budget pressures by denying waivers for caregiver payments, reducing payment amounts, or cutting back on home-based and respite services. Local nonprofits and public-private partnerships may attempt to fill these gaps, but their capacity is limited.
Reporters and concerned citizens can monitor state budgets and line items for aging services to identify potential cuts. Key questions to investigate include whether states are denying waivers, reducing payment amounts, or scaling back essential services.
New Work Requirements and Caregiver Exemptions
New Medicaid work requirements are going into effect in 41 states that have expanded Medicaid eligibility. While family caregivers are supposed to be exempt, the details of how this exemption will be documented and enforced remain unclear.
FAQ
Q: What are Medicaid HCBS?
A: Medicaid Home and Community Based Services are programs that help older adults and people with disabilities receive care in their homes or communities, rather than in institutions like nursing homes.
Q: Why are Medicaid HCBS important?
A: They allow millions to age in place, maintain independence, and avoid costly institutional care.
Q: What is the biggest threat to Medicaid HCBS right now?
A: Federal funding cuts are forcing states to create difficult budget decisions, potentially leading to reductions in HCBS.
Q: How can I discover out what’s happening with Medicaid HCBS in my state?
A: Check your state’s budget and line items for aging services, and contact your state representatives.
Did you know? Approximately 1 in 5 Medicaid home care recipients are adults 65 and older with chronic illnesses or disabilities.
Pro Tip: Stay informed about proposed legislation impacting Medicaid at the state and federal levels. Advocate for policies that support home- and community-based services.
Learn more about Medicaid and HCBS programs by visiting the KFF website.
Have questions or concerns about Medicaid HCBS in your area? Share your thoughts in the comments below!
