As the population ages and the number of individuals with disabilities continues to grow, the demand for long-term care services is steadily increasing. Many older adults and people with disabilities require assistance with essential self-care tasks like bathing, dressing, and eating. This support, known as “long-term care,” can be delivered in a variety of settings—from institutional facilities such as nursing homes and assisted living facilities , to the comfort of one’s own home and within the community. Despite a common misconception—with four in ten adults incorrectly believing Medicare is the primary payer—Medicaid is, in fact, the cornerstone of funding for these vital services, covering nearly two-thirds of all home care spending in the United States as of 2023 .
Recent federal policy changes,especially the 2025 reconciliation law,are poised to substantially impact the landscape of Medicaid and,consequently,home care provision. This law is projected to reduce federal Medicaid spending by approximately $911 billion (roughly 14%) over the next decade . These cuts could have far-reaching implications for the home care workforce, support for family caregivers, and the scope of services covered by state Medicaid programs . Considering that over half of all Medicaid spending already supports care for individuals 65 and older and those with disabilities—the very population most reliant on home and community-based services—the proposed reductions present substantial challenges for states . The reconciliation law also introduced a new type of 1915(c) home care waiver for individuals who do not require the level of care provided in institutional settings. However, the uptake of these new waivers is expected to be limited due to the aforementioned funding cuts and requirements for states to demonstrate that the waivers won’t lengthen existing wait times for services.
this article provides an overview of Medicaid home care—also referred to as “home- and community-based services” (HCBS)—exploring who is covered, what services are available, and the critical changes occurring in the system as of 2025.Data presented here is based on a extensive survey of state officials conducted by the Kaiser Family Foundation (KFF),encompassing all 50 states and the District of Columbia between April and July 2025 .Over 5.1 million people recieve Medicaid-covered home care services annually , underscoring the pervasive need for these essential supports.
how Medicaid Home Care Works: A State-by-State Landscape
Unlike institutional long-term care, which states are
Currently, all states have at least one home care program, with many operating multiple programs to cater to diverse needs. The most prevalent models are 1915(c) waivers (utilized in 47 states) and the personal care benefit offered through the state plan (available in 33 states). 1115 waivers (employed in 15 states) and the Community First Choice option (present in 10 states, as of Figure 1 in the source material) also play a role in the home care ecosystem. This demonstrates a growing shift towards home- and community-based services over traditional institutional care; in 2023, 5.1 million people utilized Medicaid home care, compared to 1.4 million in institutional long-term care .
Eligibility for Medicaid Home Care
The primary pathway to Medicaid home care eligibility is based on either a disability or age (65 or older). These “non-MAGI” pathways—which don’t rely on Modified Adjusted Gross Income calculations—are common for individuals needing long-term support.Beyond age or disability, eligibility typically requires meeting certain income and asset limitations . Most states allow for somewhat higher income thresholds, capping it at 300% of the Supplemental Security Income (SSI) limit—equivalent to $2,901 per month in 2025 —with asset limits generally capped at $2,000 per person. To qualify, enrollees must also demonstrate a functional need for assistance with activities of daily living (ADLs), which include tasks like eating, bathing, and dressing. A significant proportion of Medicaid home care recipients—over half—are dually eligible for both Medicaid and medicare, adding complexity to program coordination .
Variation in Program Structure and Covered Services
As of 2025, states operated over 300 different programs for Medicaid home care, each often tailored to specific population groups. The majority (259) are operated through 1915(c) waivers, while 15 utilize 1115 waivers. Programs most commonly target individuals with intellectual or developmental disabilities (48 states) and those aged 65 or older, or with physical disabilities (46 states).States frequently offer multiple waivers to address the diverse needs within these populations—such as,18 states offer three or more waivers for individuals with intellectual or developmental disabilities,and 10 states offer three or more waivers for older adults or those with physical disabilities.
What Services are Covered?
Beyond core home health services, Medicaid home care encompasses a broad range of supports designed to assist with both ADLs and instrumental activities of daily living (IADLs). The Centers for Medicare & Medicaid Services (CMS) provides a comprehensive taxonomy to standardize service descriptions across the country . Commonly covered services include adult day care, supported employment, round-the-clock care, services for family caregivers, home-delivered meals, and non-medical transportation.
All responding states (50) provide supported employment, day services, home-based services, and cover equipment/technology modifications, a testament to their foundational role in home care. Though, service availability varies significantly. as an example, Colorado offers illness support, group counseling, and bereavement services within a waiver for medically fragile children, while Louisiana provides dental services, and supportive housing options for individuals with intellectual or developmental disabilities. Rent and food expenses for live-in caregivers are the least frequently covered service. States tailor service offerings based on the target population served. For example,47 states cover supported employment through waivers for individuals with intellectual or developmental disabilities,compared to only 15 states for older adults or those with physical limitations. similarly, home-delivered meals are widely available for seniors (41 states) but less common for individuals with intellectual or developmental disabilities (10 states).
Managed care and the Future of Medicaid Home Care
Managed care is becoming increasingly common in the delivery of Medicaid home care. All but 11 states now utilize managed care organizations (MCOs) to deliver at least some home care services . States contract with MCOs, paying them a fixed fee (capitation) per enrollee, with the MCO responsible for coordinating and providing services. This approach aims to enhance care coordination and predictability in spending. Managed care is more prevalent for home health services provided under state plans and 1115 waivers than for 1915(c) waivers. Furthermore,the number of states integrating managed care into their 1915(c) waivers has grown,with 26 states now utilizing this approach in 2025—four more than in the previous year.
The evolving landscape of Medicaid,driven by factors like the 2025 reconciliation law and the increasing adoption of managed care,presents both challenges and opportunities. States will need to navigate funding reductions while striving to maintain access to high-quality, person-centered home care services. Careful consideration will be required to ensure that vulnerable populations—including older adults, people with disabilities, and dual-eligible beneficiaries—continue to receive the support they need to live safely and independently in their communities. Ongoing monitoring of these trends and innovative approaches to care delivery will be crucial in shaping the future of Medicaid home care.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis,polling,and journalism activities.
