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How Medicaid Supports Seniors and People with Disabilities and Their Caregivers

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Medicaid Supports the Health and Economic Well-Being of Paid and Unpaid Caregivers and is Vital to Older Adults and People with Disabilities

Medicaid is essential to the health and wellbeing of people in the United States at every stage of life. Medicaid is much more than a health insurance program: it is the primary source of funding for long-term care in the nation, paying well over half of the $415 billion spent on long-term care,1 providing coverage to more than 9 million people for long-term services and supports.2 This includes 7.8 million older adults and people with disabilities who rely on home and community-based services (HCBS), seeking to live and age with dignity in their own homes and communities where most people would prefer to receive their care.3 Medicaid dollars also support family caregivers struggling with costs and workers providing essential services for people with long-term care needs.

Medicaid Plays a Critical Role in Supporting the Economic Stability of Family Caregivers

More than 105 million adults are caregivers in the U.S.—over 40% of the adult population.4 Their time is largely uncompensated. Women, especially women of color, play a pivotal role in providing unpaid care for children, family members and friends including those who are aging or disabled. These and other factors make Medicaid critical for many family caregivers, who often experience economic barriers and health challenges and rely on Medicaid for coverage and access to care.5 Medicaid also helps families afford aging and disability care,6 including costs for direct care workers as well as critical emergency back-up care and much-needed respite services.7

A 2021 AARP study found that 78% of family caregivers report having out-of-pocket costs related to caregiving, with an average of $7,242 annually.8 On average, family caregivers spend 26% of their income on caregiving needs with higher levels of financial strain for Black and Hispanic caregivers. For those providing care for aging or disabled family members and young children, also known as “sandwich-generation caregivers,” the lack of affordable, accessible child care and absence of policies, such as paid leave, create additional economic barriers. Medicaid serves a crucial role in supporting family caregivers and their loved ones.

Medicaid Pays for the Vast Majority of Direct Care Workers, One of the Fastest Growing Occupations in the Country

The direct care sector is one of the fastest-growing occupations in the nation.9 Today, this includes over 5 million direct care workers, including personal aides, home health aides, direct support professionals, and nursing assistants, all of whom provide services and support to older adults and people with disabilities.10 They support day-to-day activities such as getting dressed, preparing meals, taking medications, participating in employment, assisting with communication, using transportation, and providing respite services for family caregivers. As the primary source of funding for long-term care, Medicaid is key to paying for direct care workers and addressing shortages of these workers.11 Consistent support from Medicaid decreases turnover and training costs for employers, and provides the consistency and reliability of care that older adults, people with disabilities, and family caregivers need. Existing flexibilities within Medicaid also help families and the direct care workforce by supporting self-directed care models that allow individuals to hire their own caregivers, including family members. Without support for caregivers, many older adults and people with disabilities would be unable to live independently and safely and participate fully in their communities.

Medicaid Supports the Health and Well-Being of Family Caregivers and Direct Care Workers

Medicaid provides affordable health care for family caregivers and direct care workers, supporting healthy, thriving communities. Family caregivers are more likely to experience financial strain and their own personal health challenges while providing care, and less likely to receive health insurance through their employer or spouse.12 Medicaid is also critically important in providing health coverage for over 30% of direct care workers who rely on the program to access affordable health care.13 Medicaid reduces out-of-pocket costs, increases access to healthcare, and improves overall health outcomes for individuals covered by the program, including caregivers, who may rely on the Medicaid expansion for coverage.14

The Support that Family Caregivers and Direct Care Workers Provide is Essential and a Driving Force in the Economy

Care is the work that makes all other work possible. Much of this is uncompensated, with a value exceeding $1 trillion annually and with women performing two-thirds of this labor.15 Medicaid helps family caregivers maintain employment, especially with the consistent, reliable support from direct care workers. Every day in America, 10,000 people turn 65 years old,16 and the number of older adults over age 85 is expected to more than double by 2040.17 These and other factors, including most people’s preference to live and age at home, makes the direct care sector one of the fastest growing in the U.S. economy. Estimates indicate that 8.9 million total direct care job openings will need to be filled by 2032.18 Family caregivers, direct care workers, older adults, and people with disabilities rely on Medicaid and aging and disability care in the home and community to help ease the cost of giving and receiving care. Supporting Medicaid is foundational to supporting families and the long-term care system.

Endnotes

  1. P. Chidambaram and A. Burns, “10 Things About Long-Term Services and Supports (LTSS),” (Washington: KFF, July 8, 2024), available here. ↩︎
  2. C. Murrary, C. Stepanczuk, A. Carpenter, & A. Wysocki, “Trends in Users and Expenditures for Home and Community-Based Services as a Share of Total Medicaid LTSS Users and Expenditures, 2022,” (Washington: Centers for Medicare and Medicaid Services, August 29, 2024), available here. ↩︎
  3. D. Douglas, M. Yiu, & D. Machledt, “Protect Medicaid Funding Issue #6: Older Adults and People with Disabilities,” (National Health Law Program, September 2024), available here. ↩︎
  4. R. Ramchand et al., “America’s Military and Veteran Caregivers: Hidden Heroes Emerging from the Shadows,” (Santa Monica, CA: RAND, September 24, 2024), available here. ↩︎
  5. A. Burns, A. Wolk, M. O’Malley Watts, & M. Mohamed, “How do Medicaid Home Care Programs Support Family Caregivers?” (Washington: KFF, January 13, 2025), available here. ↩︎
  6. Op. cit. Chidambaram & Burns. ↩︎
  7. National Institute on Aging, “What is Respite Care?” (Washington: National Institute on Aging, October 12, 2023), available here. ↩︎
  8. L. Skufca and C. Rainville, “Caregiving Out-of-Pocket Costs Study,” (Washington: AARP, June 2021), available here. ↩︎
  9. U.S. Bureau of Labor Statistics, “Home Health and Personal Care Aides,” (Washington: U.S. Bureau of Labor Statistics, August 29, 2024), available here. ↩︎
  10. PHI, “Direct Care Workers in the United States: Key Facts,” (New York: PHI, September 2, 2024), available here. ↩︎
  11. Ibid.; A. Burns, M. Mohamed, & M. O’Malley Watts, “Payment Rates for Medicaid Home- and Community-Based Services: States’ Responses to Workforce Challenges,” (Washington: KFF, October 24, 2023), available here. ↩︎
  12. AARP, “2020 Report: Caregiving in the U.S.,” (Washington: AARP, May 2020), available here. ↩︎
  13. S. Angell, “Direct Care Workforce State Index: Mapping Workforce Policies and Outcomes,” (New York: PHI, July 30, 2024), available here. ↩︎
  14. M. Guth, R. Garfield, and R. Rudowitz, “The Effects of Medicaid Expansion Under the ACA: Studies from January 2014 to January 2020,” (Washington: KFF, March 17, 2020), available here. ↩︎
  15. National Partnership for Women & Families, New Analysis Shows Unpaid Care Work in the U.S. is Worth More Than $1 Trillion Each Year, Press Release (June 27, 2024), available here. ↩︎
  16. America Counts, “2020 Census Will Help Policymakers Prepare for the Incoming Wave of Aging Boomers,” (Washington: U.S. Census Bureau, December 10, 2019), available here. ↩︎
  17. Administration for Community Living, Administration on Aging, “2023 Profile of Older Americans,” (Washington: Administration for Community Living, May 2024), available here. ↩︎
  18. Op. cit. PHI. ↩︎

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