Federal Cash Boost Proposed for Home Care: States Get 10% FMAP Bump to Raise Worker Pay and Cut Waitlists

This bill is a major, though temporary, cash injection aimed squarely at fixing the broken system of Medicaid Home and Community-Based Services (HCBS). Essentially, it tells states: if you promise to seriously improve your home care programs, the federal government will pay a much bigger share of the bill for two years—Fiscal Years 2026 and 2027. Specifically, states that qualify will see their Federal Medical Assistance Percentage (FMAP)—the federal share of Medicaid costs—jump by 10 percentage points for HCBS spending, though the federal government won’t pay more than 95% of the cost for any state.

The Direct Care Worker Rescue Plan

For anyone who relies on home care, or knows someone who does, the biggest problem is finding and keeping reliable staff. This bill tackles that head-on by making the extra federal money conditional on states focusing on the direct care workforce. States must use the funds to increase reimbursement rates for agencies, but only if those agencies commit to passing that money along as higher compensation for workers—including better wages, paid sick leave, and benefits. The goal isn't just a raise; it’s job stability, ensuring workers have consistent hours and better eligibility for benefits. Think of it as an attempt to turn high-turnover, low-wage jobs into viable careers, which means better, more consistent care for recipients.

Clearing the Queue and Coming Home

Beyond stabilizing the workforce, this funding is meant to expand access dramatically. One of the most frustrating realities of HCBS is the massive waiting lists—people who qualify for care but can’t get it because the state ran out of money. The bill explicitly requires states to use this enhanced funding to expand services and get people off those waiting lists. Furthermore, it focuses on helping individuals who were forced into nursing homes or institutions due to a lack of community-based options to move back home, providing the necessary services and rehabilitation to regain their independence. This is a huge win for personal autonomy and quality of life, allowing people to receive care in their own homes rather than an institutional setting.

The State’s Catch-22: Maintenance of Effort

While the federal money is welcome, it comes with a strict requirement that keeps state budget folks on their toes: the “maintenance of effort.” To get the 10% FMAP boost, a state has to guarantee that this new federal cash will add to, not replace, the amount of state money they were already spending on HCBS before this law passed. This is critical because it prevents states from just cutting their own spending and pocketing the federal increase. However, the temporary nature of the funding—it expires after FY 2027—means states are committing to using this money to start programs and hire staff that they’ll have to sustain with their own increased state spending once the federal bonus disappears. It’s a push to improve, but it requires a long-term budget commitment from the states.

Oversight and Accountability

This isn't just a blank check. States must submit detailed plans to the Secretary of HHS outlining exactly how they will spend the money on things like family caregiver support, assistive technology, and public health preparedness. After the funding period, states must report back on how many people were served and how many got off waiting lists. The bill also mandates an external evaluation to figure out what actually worked to improve access and quality. This level of required reporting and external review means we should get solid data on whether this massive investment actually delivered better outcomes for people needing home care and for the essential workers providing it.