Medicaid pays home care's costliest patients first and its workers last

Medicaid's home- and community-based services program (HCBS) is supposed to be the humane alternative to a nursing home: care delivered in a person's own home or a small group setting instead of an institution.▸ The money follows that mission — the population with the heaviest needs draws the largest share of the budget. What the money does not do is reach the workers who show up to deliver the care. That gap is now a waiting list of 607,000 people.

MACPAC — the Medicaid and CHIP Payment and Access Commission, which advises Congress — analyzed federal claims data and found that in calendar year 2021, Medicaid spent $82.5 billion on HCBS, more than the $66.6 billion it spent on institutional care that same year.▸ HCBS has been the majority form of long-term care spending since 2013, and it now serves more people too: 2.5 million HCBS users in 2021 versus 1.5 million institutional users.

Within that $82.5 billion, the money is not spread evenly across populations — and it isn't supposed to be.▸ Beneficiaries with intellectual or developmental disabilities (I/DD) or autism need the most support per person, and the dollars reflect it: per the same MACPAC analysis, they were 30.7% of HCBS users but drew 52.5% of HCBS spending in 2021.

By the arithmetic of a budget, that looks like the system working exactly as designed: money chasing need.▸ It is what happens next — whether that money actually buys a worker to show up at someone's door — where the system breaks down.

The people who deliver HCBS in someone's home are direct support professionals (DSPs) — aides who help with bathing, meals, medication, and the rest of daily living for people with I/DD.▸ ANCOR, the national trade association for community disability providers, surveyed 469 provider organizations across 48 states and D.C. in 2025 and found DSP turnover holding near 40% nationally, with vacancy rates of 12–15%. Eighty-eight percent of providers reported moderate or severe staffing shortages in the past year, and 62% said they had turned away new referrals because they didn't have the staff to serve them.

The Bureau of Labor Statistics doesn't track DSPs as their own occupation — PHI, a direct-care workforce research group, notes they're folded into the broader "residential care aide" category because they lack a distinct federal occupation code.▸ That category's median wage was $17.71 an hour in 2024, up from $14.10 a decade earlier — real progress, but still low enough that PHI finds 49% of all direct care workers nationally rely on public assistance like Medicaid or SNAP to get by. The workforce that keeps disabled Medicaid beneficiaries out of institutions is, in meaningful numbers, also relying on Medicaid.

When providers can't hire or keep staff, they cap enrollment — which is how a program with a growing budget produces a growing waiting list.▸ KFF surveyed state Medicaid officials in 41 states that maintain HCBS waiting or interest lists and counted 607,000 people waiting nationally in 2025, up 14% from 2024. Nearly three-quarters of them — 74% — have I/DD. The average wait fell from 40 months to 32 months across all waivers year over year, but that national average hides where the worst waits still concentrate:

I/DD applicants wait 37 months on average — five months longer than the national figure — and applicants to autism-specific waivers wait 63 months, nearly twice the overall average and the longest of any population KFF tracks.▸ This is the same population that already draws the largest share of HCBS dollars. More money reaching the program hasn't shortened the line for the group it was supposed to help most; the workforce to deliver that money hasn't grown to match it.

The exposure is about to widen.▸ On July 4, 2025, the federal reconciliation law was signed into effect, and the Congressional Budget Office estimated it will cut federal Medicaid spending by $911 billion over the next decade — cuts state Medicaid programs are likely to absorb, in part, by trimming optional benefits like HCBS. ANCOR's 2025 survey found 52% of providers already considering further program cuts if staffing doesn't improve; nearly 30% were already discontinuing programs or services outright.

Spending and population-share figures are calendar year 2021, the most recent year with a full national MACPAC breakdown; waiting-list and wage figures are 2025, the most recent survey year for each source. The two years aren't the same vintage, and are labeled as such throughout.