The Home Care Workforce Has Not Kept Pace with Growth in Home and Community-Based Services

Abstract

Home and community-based services (HCBS) are the predominant approach to delivering long-term services and supports in the United States, but there are growing numbers of reports of worker shortages in this industry. Medicaid, the primary payer for long-term services and supports, has expanded HCBS coverage, resulting in a shift in the provision of long-term services and supports out of institutions and into homes. Yet it is unknown whether home care workforce growth has kept up with the increased use of these services. Using data from the American Community Survey and the Henry J. Kaiser Family Foundation we compared trends in the size of the home care workforce with data on Medicaid HCBS participation between 2008 and 2020. The home care workforce grew from approximately 840,000 to 1.22 million workers between 2008 and 2013. After 2013, growth slowed, ultimately reaching 1.42 million workers in 2019. In contrast, the number of Medicaid HCBS participants grew continuously from 2008 to 2020, with accelerated growth between 2013 and 2020. As a consequence, the number of home care workers per 100 HCBS participants declined by 11.6% between 2013 and 2019, with preliminary estimates suggesting further declines in 2020. Improving access to HCBS will require not just expanded insurance coverage but also new workforce investments.

Introduction

More than nine million United States residentsrely on long-term services and supports for help with everyday tasks such as dressing, bathing, and mobility.^1,2 As about half of these people, and more than 70 percent of those who use paid help overall, are older adults,^1–3 demand for these services is projected to grow substantially in the coming decades as the population ages.⁴

Although long-term services and supports were historically provided in institutional settings such as nursing homes, today the majority are delivered as home-based services through Medicaid’s home and community-based services (HCBS) programs.^5,6 Most people needing assistance at home receive only informal care from family and friends, if they receive any help at all, but 13–32 percent receive paid care,^3,7,8 relying on the labor of direct care workers at home, such as home care and personal care aides. Advocacy groups and the media have raised the alarm about shortages of these workers,⁹ and the pandemic has only exacerbated these concerns.^5,10

A home care workforce shortage could result in unmet care needs, with serious adverse consequences for patients.^11,12 It could also lead to extended stays in nursing homes when home care is unavailable. Furthermore, family members—most commonly daughters—fill in when paid care is unavailable, with growing evidence of serious economic and health consequences for the caregiver.^13–16

As worries about a labor shortage grow, the rising availability of insurance coverage for HCBS has resulted in an increase in the number of people receiving paid help at home. In response to a desire of beneficiaries to receive care in noninstitutional settings, coupled with the Supreme Court’s Olmstead decision, which required states to provide services in the least-restrictive setting possible,^5,17 state Medicaid programs have significantly expanded coverage of HCBS during the last several decades. As of 2020, 66 percent of long-term services and supports spending in home and community settings comes from Medicaid.⁵

Given a national policy focus on improving access to HCBS, it is critical to understand whether the home care workforce has expanded sufficiently to meet the needs of newly insured HCBS participants. Using national data on the annual number of home care workers in the US, coupled with data on the number of Medicaid HCBS participants in the United States, we examined trends in the supply of home care workers relative to Medicaid HCBS enrollment from 2008 to 2020.

Study Data And Methods

Data

Our two primary data sources were the American Community Surveys (IPUMS USA)² and the Henry J. Kaiser Family Foundation (KFF). The American Community Survey is a large, representative sample of 3.5 million households conducted annually by the Census Bureau and is designed to capture the demographic, socioeconomic, and housing characteristics of the US population.¹⁸ We used the American Community Survey to estimate the number of home care workers (that is, direct care workers who work in home-based settings) in each year between 2008 and 2020. Similar to other surveys, the 2020 American Community Survey data suffered from data quality issues due to the COVID-19 pandemic¹⁹; thus, the 2020 data should be interpreted with caution.

We supplemented the American Community Survey data with survey data from KFF on the number of Medicaid HCBS participants in each state from 1999 to 2020.^20–24 Although HCBS participants are often eligible to receive both home-based and community-based care, the vast majority of HCBS spending is for home-based services.⁶ Therefore, as the number of HCBS participants grows, we expect the demand for home care workers to grow.

Medicaid payment for HCBS is made possible under several different legal authorities,²⁵ and KFF collects annual data on the number of participants in the two largest²⁶: Section 1915(c) waivers and state plan personal care. The 1915(c) waivers allow states to “waive” traditional Centers for Medicare and Medicaid Services (CMS) rules to allow a subset of beneficiaries meeting the criteria of demonstrating a need for an institutional level of care to instead receive services in the community.²⁵ In contrast, state plan personal care is offered through CMS-approved amendments to existing Medicaid state plans that allow states to add personal care services to the suite of benefits offered under their state Medicaid plans. Although states can cap enrollment in 1915(c) waivers, state plan benefits must be provided to all Medicaid enrollees who meet the state’s medical need criteria.

Beginning in 2017 the KFF data also include the number of HCBS participants in three additional legal authorities: Section 1115, Community First Choice, and Section 1915(i). Section 1115 waivers offer states broad flexibility in designing their Medicaid programs²⁷; states typically use them to offer Medicaid coverage through private managed care plans, which may or may not cover HCBS, and KFF tracks the number of HCBS participants within these waivers. Section 1915(i) and Community First Choice are newer program authorities that provide additional options for states to offer 1915(c) waiver-like services or personal care services, respectively, under their state plans.²⁵

Study Sample

We included all states and Washington, D.C., in the analyses, with the exception of Arizona, Delaware, Hawaii, Rhode Island, and Texas. We excluded Arizona, Delaware, Hawaii, and Rhode Island because we could not distinguish long-term services and supports participants from other Section 1115 participants in those states, and we did not have reliable data on Arizona’s HCBS participation before 2017. We excluded Texas as a result of implausibly dramatic growth in state plan personal care participation in that state. In addition to excluding these states, we excluded Section 1115 participants in California and New York to avoid inflating estimates in later years.²⁸

Methods

First, we used data from KFF to estimate the number of Medicaid HCBS participants in each state and year from 1999 to 2020. We summed across all Medicaid HCBS program authorities described above. Participant data for Section 1115 waivers, Community First Choice, and Section 1915(i) were available starting only in 2017; to estimate the number of participants in these program authorities in years before 2017, we supplemented the KFF data with additional research on the state-specific start dates and implementation of these programs. We assumed that participation in each program authority started at zero in the year before its implementation in each state. If one of the new program authorities supplanted another (for example, a state transitioned state plan personal care participants into Community First Choice), we assumed that enrollment in the new program authority mirrored disenrollment in the older program authority in the first one to three years after implementation. Then we used linear interpolation to estimate enrollment in each year between the program’s implementation and 2017. For further details on how we handled missing data, see online appendix A.²⁹

Next we used American Community Survey respondents’ reported industry and occupation to estimate the supply of home care workers in each year from 2008 to 2020. Following previous research,^30–32 we defined home care workers as nursing, psychiatric, and home health aides (occupation code 3600) and personal and home care aides (occupation code 4610) who reported working in the following industries: home health care services (industry code 8170), individual and family services (industry code 8370), and private households (industry code 9290). We restricted to respondents who reported being employed at the time of the survey. We used census-provided sampling weights and survey methods in Stata, version 17.0, to create nationally representative estimates and to account for the American Community Survey’s complex survey design.

Finally, to test whether the supply of home care workers kept pace with Medicaid HCBS participation, we calculated ratios of the supply of home care workers to the number of Medicaid HCBS participants in each year between 2008 and 2020.

Limitations

There were several limitations to this study. First, the KFF data may double-count people enrolled in multiple Medicaid HCBS program authorities. For example, beneficiaries participating in both a 1915(c) waiver and state plan personal care could be counted twice. A recent report suggests that this is uncommon.^33,34 Even so, we conducted two sensitivity analyses to avoid double-counting: restricting to 1915(c) waiver participants and restricting to state plan personal care and Community First Choice participants.³⁵

An additional challenge in examining Medicaid HCBS participation is that there is wide variation across states in the services covered by HCBS programs. Although HCBS 1915(c) waivers most commonly cover home-based services such as home health aides, there is likely to be variation in HCBS participants’ intensity of home-based service use and need for home care workers. Our sensitivity analysis restricting to state plan personal care and Community First Choice participants represents a cleaner measure of participants receiving a similar set of home-based services that require home care workers, and our overall findings remained the same when restricting to these participants.

Third, states are increasingly using private managed care plans or new options such as Community First Choice to cover HCBS, and the KFF data do not capture all participants receiving such services.³⁶ Thus, we may have underestimated the slope of the trend in people with Medicaid HCBS coverage. As such, we consider our results to be conservative estimates of rising demand for HCBS.

Finally, home care workers serve both people with long-term services and supports needs and those with shorter-term, postacute care needs, which are typically covered by Medicare. In this article we focus on growth in Medicaid-funded HCBS services that do not include Medicare-funded home health. If demand for home-based postacute care is also growing, then our results will underestimate growth in HCBS demand, providing a lower-bound estimate.

Study Results

Exhibit 1 presents the number of participants in Medicaid HCBS programs, disaggregated by program authority, from 1999 to 2020. The number of Medicaid HCBS participants more than tripled between 1999 and 2020, going from 1.10 million participants in 1999 to 3.37 million participants in 2020. In addition to overall growth in Medicaid HCBS participation, the relative importance of the five HCBS program authorities changed over time. Between 1999 and 2010, 1915(c) waivers were the predominant mechanism for delivering Medicaid HCBS, making up 58.0–61.0 percent of participants, followed by state plan personal care, at 39.0–41.9 percent. Starting in 2011, the relative importance of these two program authorities, especially state plan personal care, declined as states began implementing newer options such as Community First Choice. By 2020, 12.7 percent of Medicaid HCBS participants were in Community First Choice, whereas 55.0 percent were in Section 1915(c) waivers and 24.8 percent were participating in a state plan personal care option. Participation in the other two program authorities, 1915(i) and Section 1115, remained low in the study states (<5 percent of total participation), but were important in other states, such as New York, whose Section 1115 participants were excluded from the analysis.

Exhibit 1.

Trend in the number of Medicaid home and community-based services (HCBS) participants, disaggregated by program authority, 1999–2020

Source/Notes:SOURCE Authors’ analysis of data from the Henry J. Kaiser Family Foundation. NOTES This exhibit presents the number of Medicaid HCBS participants in each year from 1999 to 2020, disaggregated by program authority. Program authorities include 1915(c) waiver programs, state plan personal care, Section 1115, Section 1915(i), and Community First Choice. Section 1915(c) waivers allow states to “waive” traditional Centers for Medicare and Medicaid Services rules to allow some Medicaid beneficiaries to receive long-term services and supports in the community. In addition, states have the option to cover personal care services as part of their standard Medicaid benefit package; this is referred to as “state plan personal care.” Section 1915(i) and Community First Choice are newer program authorities that provide additional options for states to offer 1915(c) waiver-like services or personal care services, respectively, under their state Medicaid plans. Finally, Section 1115 waivers offer states broad flexibility in designing their Medicaid programs; states typically use them to offer Medicaid benefits through private managed care plans. Participants in Arizona, Delaware, Hawaii, Rhode Island, and Texas were excluded from the analysis, along with Section 1115 HCBS participants in California and New York. (For details, see Methods section.) Participation data for Section 1115, Section 1915(i), and Community First Choice were only available starting in 2017. For information on how we interpolated data for missing years,see online appendix A(see note 29 in text).

Exhibit 2 compares the number of Medicaid HCBS participants with the number of home care workers (in millions) from 2008 to 2020, with 95% confidence intervals included for the workforce estimates. Notably, the home care workforce grew by 45 percent between 2008 and 2013, going from 0.84 million to 1.22 million workers, or an increase of about 76,000 workers per year. However, after 2013, this growth slowed to about 33,000 additional workers per year, reaching 1.42 million workers in 2019. Estimates suggest that the number of workers may have fallen slightly in 2020 to 1.38 million; however, these data should be interpreted with caution because of the COVID-19 pandemic.

Exhibit 2.

Trend in the number of home care workers relative to Medicaid home and community-based services (HCBS) participants, 2008–20

Source/Notes:SOURCE Authors’ analysis of data from the Henry J. Kaiser Family Foundation and the American Community Surveys, 2008–20. NOTES This exhibit presents the number of home care workers and the number of Medicaid HCBS participants in the US in each year from 2008 to 2020. Data are reported in millions (left y axis). In addition, it presents a ratio of home care workers per 100 Medicaid HCBS participants (right y axis). Workers and participants in Arizona, Delaware, Hawaii, Rhode Island, and Texas were excluded, along with Section 1115 HCBS participants in California and New York. (For details, seeMethods section.) For information on how we interpolated data for missing years, seeonline appendix A (see note 29 in text). ^aSimilar to other surveys, the 2020 American Community Surveys data suffered from data quality issues because of the COVID-19 pandemic (see note 19 in the text); thus, the 2020 data should be interpreted with caution.

In contrast to workforce trends, growth in HCBS participation accelerated slightly after 2013. Therefore, the size of the home care workforce has not kept pace with new demand from HCBS participants since 2013. The number of home care workers per 100 Medicaid HCBS participants rose nationally between 2008 and 2013, going from 41.30 to 49.68 workers per 100 HCBS participants; however, this ratio declined by 11.6 percent between 2013 and 2019, going from 49.68 to 43.90 workers per 100 HCBS participants, with preliminary estimates suggesting that it may have declined further to 41.08 workers per 100 HCBS participants in 2020.

Although the number of HCBS participants may be overestimated because of the potential for double counting of people enrolled in more than one program, this trend remains when limiting participation to either 1915(c) waivers or personal care, which are incomplete counts but do not double-count participants. See appendix B, exhibits B1 and B2, for details.²⁹ The downward trend between 2013 and 2019 is moderated in the analysis restricting to 1915(c) waiver participants; however, several states integrated their 1915(c) waivers into Section 1115 managed care demonstrations (for example, New Mexico) or Community First Choice (for example, Maryland, Montana) in more recent years—therefore, this analysis likely underestimates the true growth in HCBS participation.

Discussion

There has been a dramatic shift in long-term services and supports from nursing homes to home and community-based settings; this trend, coupled with an aging population, has raised concerns that the home care workforce will not keep pace with demand. Consistent with prior research describing growth in this workforce between 1989 and 2004,³⁰ we found that the number of home care workers continued to increase between 2008 and 2019, albeit with markedly slower growth after 2013. At the same time, Medicaid coverage for HCBS expanded rapidly throughout the study period. The resulting growth in HCBS participation, which outpaced the workforce expansion and provides access to HCBS at no cost to participants, is likely to have increased overall demand for paid home-based care.

Our study only examines the home care workforce relative to Medicaid-funded HCBS participation. Although Medicaid is not the only payer of long-term services and supports and HCBS, it is the predominant payer. A smaller percentage of long-term services and supports is paid for out of pocket,^5,37 but these services are expensive; for example, the median annual cost of a home health aide is more than $60,000.⁵ Private health insurance in the US generally does not cover long-term care, and Medicare’s postacute home health benefit is not ordinarily available for long-term services and supports,⁵ representing a major coverage gap. Therefore, Medicaid is the primary payer for accessing long-term services and supports in the US, with many people spending down their income and assets to qualify.³⁸

In addition, Medicaid coverage for HCBS varies across states and disability groups,^3,5 and people with disabilities must meet strict income and asset limits to qualify. There are likely many more people in need of long-term services and supports who would like to access HCBS, but who cannot afford services and are ineligible for Medicaid coverage. Although our study describes trends over time in worker supply and public HCBS coverage, we are not aware of federally collected data on the absolute level of unmet need for long-term services and supports, or how this varies across states. As others have noted,³⁹ these data would be a valuable tool for assessing the extent to which the nation’s long-term services and supports needs are being met.

Our finding that coverage for HCBS has grown faster than the home care workforce is consistent with anecdotal evidence that some Medicaid enrollees gain access to HCBS coverage only to encounter difficulty hiring workers.^40,41 One Arkansas resident described the situation to the Arkansas Nonprofit News Network: “The governor has been releasing more of the waitlist people to start receiving coverage services…It’s not going to help us families if they can’t find staff. And the more people [they] release off of that waiver waiting list, the more people that need staff.”⁴⁰ Further, there is reason to believe these worker shortages may worsen over time, as the COVID-19 pandemic has increased the desire of older adults and people with disabilities to receive care at home.⁴²

Given these findings, and the increasing importance of HCBS in long-term services and supports, it is important that states and the federal government expend effort to support and expand the home care workforce. Greater insurance coverage for HCBS through Medicaid is an encouraging development for individuals and families needing support at home, but expanded coverage alone is not sufficient to improve access—it should be coupled with investment in the workforce to meet rising demand. Although states are using new funding made available in 2021 through the American Rescue Plan to improve workforce recruitment,⁴³ this additional funding is temporary; states have until March 2025 to use it.⁴⁴ Unfortunately, the more recent Inflation Reduction Act of 2022, which initially included a new $400 billion federal investment in HCBS, ultimately omitted this funding,⁴⁵ which was a major blow to the people who rely on these services and those who provide them.

When directing future investments to sustain the home care workforce, policy makers should first and foremost prioritize improving wages and benefits. It is commonly understood that arduous working conditions, low pay, and poor benefits contribute to worker shortages in this industry,^46–48 with 24 percent of home care workers living below the federal poverty level and 51 percent relying on public benefits such as the Supplemental Nutrition Assistance Program.⁴⁷ And these jobs are becoming more difficult over time, with higher-acuity patients staying home instead of going to nursing homes.⁴⁹ Economic theory suggests that wages will increase in response to a worker shortage; however, low reimbursement rates in Medicaid may act as a cap on wages, limiting home care agencies’ and clients’ ability to increase pay to attract workers. Indeed, meager industry wages and benefits are frequently attributed to Medicaid reimbursement rates.^47,48 Future work should examine whether higher Medicaid fees for personal assistance services improve job quality.

Conclusion

This study presents new evidence on national trends in the size of the home care workforce, comparing growth in this workforce with growth in Medicaid HCBS enrollment. We find that although the home care workforce grew by 69 percent between 2008 and 2019, this growth slowed after 2013. As a result, increases in the number of Medicaid HCBS participants have outpaced workforce expansion since 2013. To sustain access to HCBS for current and future generations, new investments in this workforce are essential.

Biographies

Bio1: Amanda Rae Kreider (akreid@wharton.upenn.edu), University of Pennsylvania, Philadelphia, Pennsylvania.

Bio2: Rachel M. Werner, University of Pennsylvania and Corporal Michael J. Crescenz Veterans Affairs Medical Center, Philadelphia, Pennsylvania.