If you or someone you love has ever needed help getting out of bed, preparing a meal, managing medications, or bathing safely at home, you have relied on a direct care worker. These are the home health aides, personal care attendants, certified nursing assistants, and homemaker companions who provide what the healthcare system calls long-term care — a broad category of services that helps people with activities of daily living (ADLs) like eating, dressing, and bathing, as well as instrumental activities of daily living (IADLs) like cooking, housekeeping, and managing prescriptions. For millions of older Americans and people with disabilities, direct care workers are not a convenience. They are the difference between living at home and being placed in a nursing facility.
The scale of need is staggering and growing. According to the Department of Health and Human Services, more than half of Americans who live past age 65 will at some point need help with at least two activities of daily living. More than half will use paid long-term care services at some point in their lives, and more than one-third will spend time in a nursing home. These are not edge-case statistics — they describe the majority of the senior population. And yet the workforce responsible for delivering this care is chronically underpaid, frequently burned out, and perpetually understaffed. A series of federal policy changes now moving through Washington could make that situation considerably worse, with direct consequences for Medicare and Medicaid beneficiaries who depend on these services.
To understand why these policy shifts matter so much, you first need to understand who direct care workers are and what they earn. The direct care workforce includes roughly 4.8 million paid workers across home care and institutional settings such as nursing homes and assisted living facilities, according to PHI, a national research and advocacy organization focused on the direct care workforce. These workers earn a median wage of approximately $15 to $16 per hour, and many work part-time or irregular hours with no employer-sponsored health insurance, no paid sick leave, and no retirement benefits. The work is physically demanding — involving lifting, transferring, and supporting people with limited mobility — and emotionally taxing, often involving end-of-life care and complex behavioral health needs. High turnover is endemic: annual turnover rates in home care frequently exceed 60 to 80 percent at individual agencies, meaning the same client may cycle through multiple caregivers in a single year, disrupting continuity of care and increasing safety risks.
Medicaid is the financial backbone of the long-term care system, and that is a critical fact for Medicare beneficiaries to understand. While Medicare covers short-term skilled nursing care and limited home health visits following a hospitalization, it does not cover custodial long-term care — the ongoing help with daily activities that most people eventually need. Medicaid fills that gap for people who meet income and asset eligibility thresholds, and it is by far the largest single payer for long-term care in the United States. This means that proposed cuts to Medicaid have a direct pipeline to the quality and availability of care that seniors receive, even seniors who are primarily enrolled in Medicare. According to KFF analysis of Medicaid claims data, more than half of people who used any Medicaid long-term care services were actually under age 65 — meaning the program serves a broad population of people with disabilities alongside the elderly.
The most consequential policy threat to the direct care workforce right now is the proposed $911 billion in reductions to federal Medicaid spending currently moving through Congress. These cuts would reduce the federal matching funds that states receive to run their Medicaid programs, forcing states to make difficult choices: cut eligibility, reduce covered services, lower reimbursement rates to providers, or some combination of all three. When Medicaid reimbursement rates for home care agencies fall, those agencies have less money to pay their workers. Lower wages mean fewer people willing to take these jobs, and the workers who do take them are more likely to leave for better-paying alternatives in retail, food service, or other sectors. The result is fewer available caregivers for a growing population of people who need them.
Adding to the Medicaid funding concern is the proposed addition of work requirements for Medicaid recipients. This policy detail matters for the direct care workforce in a specific and often overlooked way: many direct care workers themselves rely on Medicaid for their own health coverage. Because wages in this sector are low and employer-sponsored insurance is rare, a significant share of home care aides and nursing assistants are enrolled in Medicaid. If work requirements create administrative barriers that cause workers to lose their own Medicaid coverage — which research from prior state-level work requirement experiments suggests is a real risk — some workers may leave the field entirely in search of jobs that offer employer health benefits, further shrinking the available workforce.
Immigration policy is the second major pressure point. Approximately three in ten direct care workers are immigrants, a category that includes naturalized citizens, lawful permanent residents, visa holders, and undocumented individuals. In major metropolitan areas and in states with large immigrant populations, that share is often considerably higher. The current administration's intensified immigration enforcement — including expanded deportation operations, reduced pathways for legal immigration, and a climate of fear that affects immigrants of all legal statuses — is already having measurable effects on workforce participation. Workers who fear detention or deportation may reduce their hours, avoid certain work sites, or leave the workforce entirely. Agencies in some regions are already reporting difficulty filling open positions that were previously filled by immigrant workers. Over the longer term, restrictive immigration policy reduces the pipeline of new workers entering the country, compounding a shortage that was already projected to worsen as the baby boom generation ages into peak long-term care need years.
Data Snapshot: According to CMS.gov data from the 2024 Medicare Advantage landscape file, there were 7,543 Medicare Advantage plans available nationwide for the 2024 plan year, reflecting the broad expansion of managed care options for seniors. However, Medicare Advantage plans — which now cover more than half of all Medicare beneficiaries — typically do not cover custodial long-term care either, meaning that regardless of which Medicare plan a beneficiary holds, the direct care workforce shortage affects their access to home-based support. CMS data also shows that Medicaid spending on home and community-based services (HCBS) exceeded $100 billion annually in recent years, underscoring how deeply the federal-state Medicaid partnership funds the direct care workforce that Medicare beneficiaries ultimately rely on.
Two proposed rules from the Department of Labor represent a third layer of risk. The first rule would roll back minimum wage and overtime protections for home care workers — protections that were only extended to this workforce in 2015 after decades of exclusion from the Fair Labor Standards Act. Removing or weakening these protections would allow home care agencies to pay workers less than the federal minimum wage for certain hours and to avoid paying time-and-a-half for overtime, making an already low-wage job even less financially viable. The second proposed rule would make it easier for employers to classify direct care workers as independent contractors rather than employees. Independent contractor status sounds neutral, but in practice it means workers lose access to unemployment insurance, workers' compensation, employer contributions to Social Security and Medicare taxes, and any employer-sponsored benefits. For workers already living paycheck to paycheck, this reclassification can be financially devastating and is likely to accelerate departures from the field.
There is also a regulatory development at the Centers for Medicare and Medicaid Services worth noting. CMS has delayed enforcement of a provision in the Medicaid Access Final Rule that would have required states to establish advisory committees with direct care worker representation — a mechanism designed to give workers a formal voice in the policies that govern their employment. Delaying this provision removes a structural check on the conditions that drive turnover and workforce instability.
For Medicare beneficiaries, the practical implications of all this are not abstract. If you currently receive home health services through Medicare, your care is delivered by workers in this same labor market. If you are on a waiting list for a Medicaid home and community-based waiver program — and in many states those waiting lists number in the thousands — workforce shortages mean longer waits and fewer available slots. If you are in a Medicare Advantage plan that offers supplemental home support benefits, those benefits depend on agencies being able to staff the visits. And if you eventually need nursing home care, staffing shortages in that setting are already well-documented, with CMS's own nursing home staffing data showing that a significant share of facilities fall below recommended nurse staffing thresholds.
What can beneficiaries and their families do with this information? First, if you are planning ahead for long-term care needs, do not assume that the current availability of home care workers in your area will remain stable. Talk to a certified financial planner or elder law attorney about long-term care insurance options, hybrid life insurance policies with long-term care riders, or Medicaid planning strategies — ideally well before you need care, since Medicaid has a five-year look-back period for asset transfers. Second, if you are currently receiving home care services through Medicaid, stay informed about your state's Medicaid budget situation. Your state Medicaid agency and your State Health Insurance Assistance Program (SHIP) counselor — reachable at no cost through Medicare.gov — can help you understand how proposed cuts might affect your specific benefits. Third, if you have concerns about the quality or continuity of care you are receiving, Medicare.gov's Care Compare tool allows you to look up quality ratings for home health agencies and nursing facilities in your area, including staffing data.
The direct care workforce crisis is not a new problem, but the current convergence of Medicaid funding cuts, immigration enforcement, weakened labor protections, and delayed regulatory safeguards represents an unusually concentrated set of pressures arriving simultaneously. For the more than 65 million Americans enrolled in Medicare, and the millions more who will age into long-term care need in the coming decade, the stability of this workforce is not a policy abstraction. It is a personal health security issue that deserves the same attention as prescription drug costs or hospital coverage gaps.