Why Medicaid Home Care Matters and Why It Is at Risk

Takeaways

• Medicaid is the main payer of home and community-based services (HCBS).

• Since states don't need to cover HCBS, these services are vulnerable to budget cuts. Federal Medicaid reductions under H.R. 1 could add to the pressure.

• Applying early, learning your state’s Medicaid rules, and knowing your appeal rights can help families prepare for possible changes to home care.

Most of us would like to grow old in the familiar comfort of our own homes. Many older adults, however, find this wish complicated by the realities of aging. Often, they need help with everyday tasks they used to accomplish with ease. These activities of daily living, or ADLs, can include bathing, dressing, eating, or simply getting around.

Older Americans can get help with ADLs while living at home through Medicaid home and community-based services, or HCBS. Recent legislation, though, might force states to cut back on these services.

Why Home Care Matters and What It Entails

People become attached to their homes for many reasons. It may be where they raised their children, created lasting memories, and formed routines. For these reasons and others, most older adults say they want to age at home and get any help they need there. 

The need for help with daily activities is more common than one might think. A 2025 survey found that 44 percent of adults age 60 and older reported having a disability. Nearly 30 percent had difficulty with daily activities such as dressing, bathing, eating, or using the toilet alone.

The struggle with ADLs increases with age. Around half of people 75 and older report a diminished ability to complete these daily tasks. Among those over age 85, this number rises to 75 percent.

Most older adults use Medicare for health coverage. Yet it does not pay for the comprehensive daily support many of them need. It doesn’t include 24-hour care, homemaker help, home-delivered meals, and personal care aides. Medicare’s home health benefit also generally requires being homebound.

Instead, Medicaid is primarily responsible for covering this kind of care. Medicaid HCBS can include:

• Help with ADLs, such as bathing, dressing, eating, and using the toilet

• Skilled nursing care, specialized therapies, durable medical equipment (such as wheelchairs, oxygen, and assistive technology)

• Adult day programs, respite, and caregiver training.

• Home-delivered meals, rides to appointments, and chore services

• Home safety features such as ramps, wider doorways, and grab bars 

These supports help people avoid pricey nursing facilities, live near their families, and stay in their communities.

The Catch: Home Care is Optional

Federal Medicaid law requires states to cover nursing facility care. However, it does not require them to cover HCBS beyond a limited home health benefit. Justice in Aging calls this the “institutional bias” in Medicaid.

The result is a patchwork of HCBS across and within Medicaid programs. What is available, who qualifies, and how long someone may wait for services all differ state to state.

The gaps in offered services are already large. Roughly 17.6 million adults nationwide likely need long-term support — including more than 9 million age 65 and older. Yet only about 8.4 million people receive Medicaid HCBS. In 2025, more than 600,000 people were on waiting lists for HCBS, waiting an average of 40 months. 

Although most Medicaid long-term care spending across all ages now goes to HCBS, the number is far lower for older adults (47 percent).  In most states, more is still spent on nursing homes and other institutions than on HCBS for older adults.

How H.R. 1 Could Put These Services at Risk

The 2025 Budget Reconciliation Act (H.R. 1) includes significant changes to Medicaid. While it does not directly eliminate home care, it'll likely still affect HCBS in a few ways. H.R. 1 will likely result in federal Medicaid reductions. KFF, an independent health policy research organization, and the Congressional Budget Office (CBO) estimate this will amount to $911 billion over the next ten years. 

States share Medicaid costs with the federal government, and unlike Washington, they generally must balance their budgets. As mentioned above, federal law doesn't require states to provide HCBS. Justice in Aging notes that states frequently cut non-mandatory benefits during budget shortfalls.

Since H.R. 1 passed, some states have already proposed cuts to HCBS. This includes Missouri, Colorado, Utah, Idaho, Nebraska, and North Carolina, among others. Cuts can mean longer waiting lists, tighter eligibility, or lower provider payments. People who lose services may be pushed toward nursing facilities or left to receive care from their families.

H.R. 1 also made a few HCBS-related changes of its own. Starting in 2028, states may create a new type of waiver. It would apply to those who need help, but not quite a nursing-facility level of care. The waiver will apply only if the waiting times for people with higher needs don’t grow.

Medicaid will also limit how much home equity a person can have while remaining eligible for long-term care. This will also begin in 2028, with a $1 million upper limit.

Supporters of H.R. 1 say the law aims to reduce waste and fraud rather than care. Advocates for older adults claim that the funding reduction will leave states no option other than to cut services.

Legal protections exist but may be uneven. Under the Supreme Court’s 1999 Olmstead decision, states must provide community-based care in certain circumstances. Failure to do so would contravene the Americans with Disabilities Act. Recently, however, the Department of Justice indicated it would no longer enforce Olmstead when a state fails to provide adequate community services.

What Older Adults and Families Can Do Now

No one can fully protect themselves from state budget cuts, but these steps can help:

• Call your local Area Agency on Aging or the Eldercare Locator. They can help determine which home care programs exist, who qualifies, and whether there is a waiting list.

• Many eligible people don’t get available benefits because they never signed up. If you or a loved one may need help soon, starting an application or joining a waiting list now can save time later.

• Learn how your state handles income and assets. Many programs use asset limits of about $2,000 for a single person or $3,000 for a couple. Married couples have special protections for a spouse who doesn’t need care. Check your state’s limits before assuming you do not qualify.

• Look into estate recovery rules. States must try to recover long-term care costs from a deceased enrollee’s property, which often means their home. Talk with an elder law attorney or legal aid program about your state’s rules before you decide to apply for Medicaid.

• Keep your Medicaid eligibility in order. Respond quickly to renewal notices, keep contact information current, and save copies of what you submit.

• Ask your doctor to note daily-living needs in your records. If services are reduced or denied, request a fair hearing within the deadline on your notice. 

• States must also have a complaint process for HCBS enrollees. Legal aid and a long-term care ombudsman can help. A care plan cannot require family members to provide unpaid help.

• Share your story with state legislators and your state Medicaid agency, attend public comment sessions, and join local aging or disability advocacy groups. State proposals sometimes move quickly.

• Talk with family now about who could help if services shrink. Get familiar with other options such as PACE programs, and VA benefits for veterans. For people in a nursing facility who want to return home, Money Follows the Person programs can help where offered.

The Bottom Line

Medicaid home care is what makes aging at home possible for many who cannot afford to pay for it themselves. But because it is optional, it is vulnerable to budget cuts. Knowing how your state’s program works is the most practical way to protect yourself.

Additional Reading

For additional reading on issues related to long-term care and Medicaid, check out the following articles:

• The Costs of the Rising Cost of Long-Term Care

• Discussing Long-Term Care With Older Adults in Your Life