Part A covers inpatient hospitalizations, care in skilled nursing facilities, palliative care, and some home health care. HCBS programs are often funded with state exemptions. Exemptions are part of the state's Medicaid program, but they provide a special group of services to a specific population. Exemptions generally require medical and financial eligibility, but the eligibility requirements for the state exemption may not be exactly the same as those of a state for receiving Medicaid. Other HCBS funders may include your tribe or your patients' private long-term care insurance.
Approximately six out of ten caregivers (63%) who provide home care services receive their salaries only from personal sources. In contrast, 28 percent receive payments only from publicly funded programs and 9 percent from a combination of personal and public program sources. Older people with household incomes of more than $75,000 a year receive 8.5 more hours of overall home care than those in the lowest income category (less than $15,000).). While the combination of funding for home care services is closely related to the economic resources of older people, across all income groups, at least 65 percent of services are provided by caregivers who are fully or partially paid from personal sources.
In fact, nearly all home care received by people with household incomes of more than $75,000 a year (97%) is funded solely from personal sources. First, this study shows that older people with household incomes of more than $75,000 a year receive 8.5 more hours of overall home care than those who earn less than $15,000 a year (additional file). Economic disparities are explained by the greater use of personally funded services by people with incomes higher. Therefore, our results suggest that the use of these services by people with higher incomes is more than sufficient to compensate, at least in terms of service hours received, their low rates of use of services from public program sources.
The independent source for research, surveys and news on health policies. Medicaid funding is shared between states and the federal government, guaranteeing states federal counterpart payments without a pre-established limit. The percentage of costs paid by the federal government (known as the percentage of federal health care or “FMAP”) varies by state, depending on the specific services and types of people enrolled, and depending on whether the costs relate to medical care or to program administration. The equalization rate was also temporarily adjusted during economic recessions and, more recently, during the COVID-19 pandemic.
The FMAP for services used by people who qualify for traditional Medicaid, which includes people who qualify as children, parents with low income, disability or age (over 65), is determined by a formula established by law. The formula is designed so that the federal government provides a counterpart rate of at least 50% and a higher equalization rate for states with a lower average per capita income. The resulting FMAP varies by state and ranged from 50% (the “minimum” of the FMAP) in ten states (California, Colorado, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Washington, and Wyoming) to 77% in Mississippi for the federal fiscal year (FFY) 2026 (figure).To participate in Medicaid and receive federal matching funds, states must meet basic federal requirements. States must offer certain mandatory benefits (for example, states can also receive federal matching funds to cover “optional services”) (for example, people with incomes above the limits established for the primary population).States also have the discretionary power to determine how to purchase covered services (for example, members who meet disability or age requirements (65 and older) account for 23% of all registrants, but account for more than half of total spending due to increased costs per person (figure).
Children represent 34% of those enrolled, but only 14% of the expenditure. Enrolled adults (those who qualify under the ACA's Medicaid expansion, as well as low-income parents) account for 43% of all enrollments and 34% of expenses. Disproportionate spending in certain eligibility groups is due to variation in spending per member between eligibility groups, reflecting differences in health care needs and utilization. The spending per member for people who qualify by age (65 and older) and disability, the two groups with the highest costs per enrolled person, is approximately six times greater than the expenditure per person enrolled for children, who had the lowest expenditure of all the eligibility groups.
People who qualify based on age or disability tend to have higher rates of chronic diseases, more complex health care needs, and are more likely to use long-term care than other members, contributing to increased spending. Social Security, Medicare and Medicaid are the three major social benefit programs and accounted for 41% of all federal disbursements in fiscal year 2024 (figure). Of these three programs, Medicaid is the smallest in terms of federal outlays, although it covers a larger number of people than Medicare or Social Security. Overall, federal spending on national and global health programs and services accounted for more than a quarter of net federal outlays in fiscal year 2024, including expenditures on Medicare (12%), Medicaid and CHIP (8%) and other health expenditures (6%).
It is expected that, in 2025, the new Congress and the new Administration will take advantage of the reconciliation to make significant spending reductions that may offset some of the costs of extending the tax cuts that expire. Budget reconciliation is a special legislative process used to introduce changes to mandatory taxes and expenditures and that allows the Senate to pass laws with only 50 votes, instead of the usual 60 votes. To begin the reconciliation process, Congress must develop a budget resolution that sets spending levels, including any significant deficit or spending reduction goal. If President-elect Trump sidesteps substantial cuts to Medicare and Social Security, there will be considerable pressure to reduce Medicaid spending.
The independent source for health policy research, surveys and news, KFF is a nonprofit organization based in San Francisco, California. Yes, Medicaid will pay for home care, and it does so one way or another, in all 50 states. Medicaid has traditionally paid for, and continues to pay for, nursing home care for people who demonstrate a functional and financial need. However, home care offers an alternative for older people who need help to continue living at home but prefer not to move to a nursing home.
Medicaid-funded home care helps older people maintain their independence and age at home, in addition to being a more cost-effective option for the state than paying for institutionalization. For a comprehensive resource focused on the informational needs and interests of Medicare fee-for-service (FFS) home health agencies, visit the HHA Center website. Regular Medicaid plans in many states also offer personal care assistance (help with bathing, dressing, eating and other non-medical care) at home, which is not a federal requirement. Home care services (provided by paid caregivers) are a valuable source of post-acute and long-term care for older people and their families.
Second, while Medicaid is the most important provider of long-term (as opposed to post-acute) home care services in the United States, its reach is quite limited in two ways. The process includes a review of the person's health status, administration of medications, and follow-up care. The results of the previous model were similar to the results of the model, discussed above, which includes “dual eligibility” for Medicare and Medicaid. Older people who struggle to perform a higher number of ADL and IADL are much more likely to receive general home care services than older people with fewer disabilities.
Several studies show that states that have adopted the ACA's expanded Medicaid program have achieved budgetary savings, increased revenues and overall economic growth, as well as seeing positive effects on the finances of hospitals and other health care providers. This helps you and the home health agency to know early in the process if Medicare is likely to cover services. However, for 33% of these respondents (n = 29), we had information about their use of home care services and the covariates of at least one additional wave.
