The Looming Crisis in Home Health Care

The health care industry has offered a rare bright spot for a struggling labor market, growing at dramatic rates even as employment flags in other sectors. It’s not only hospitals and medical facilities that are hiring more: Demand for home health care workers has spiked over the past decade, and as the American population ages, the need for these professionals will only increase. But cuts to Medicaid and shifts in immigration policy could threaten the future of these vital working-class positions.

The workers in this sector include home health aides, who assist elderly and disabled individuals with care such as checking vital signs and helping administer medications, as well as with activities of daily living, like bathing, eating, and going to the bathroom. There are also personal care aides, who provide assistance with the activities of daily living, and with tasks such as running errands, preparing meals and cleaning. In short, they are crucial to the quality of life for any individual who is otherwise unable to meet their own daily needs.

Despite the importance of home health care for older and disabled Americans, these workers typically earn lower wages, a trend exacerbating difficulties in hiring for these positions. In 2024, the median pay for home health and personal care aides was only $16.78 per hour. While the labor is both physically and emotionally taxing, there is a perception that the occupation is lower-skilled than other health professions because it may require less training.

“The workforce has just historically been under-recognized and under-appreciated,” said Madeline Sterling, associate professor of medicine at Weill Cornell Medicine and the director of the Initiative on Home Care Work at Cornell University.

Home aides are a part of the “direct care” labor force, which includes workers who operate in both home and nursing facility settings. Eighty-seven percent of direct care workers are women, 65 percent are considered low-wage, and 28 percent are black, according to data by the health news and research organization KFF. With 41 percent of workers aged 50 or older, the industry is also disproportionately older, in part because a proportion are family members who are being reimbursed for their care of loved ones.

Nursing assistants, home health aides and personal care aides are collectively paid the least of all direct care workers, earning a median of around $35,000 per year, and are more likely to be uninsured. Those working in home and community-based settings—such as senior centers or adult daycares—are also more likely to be non-citizens and work part time compared to registered nurses and licensed nurse practitioners. The combination of low wages, minimal worker protections, and high stress contributes to a significant strain on mental and physical health.

“Compared to similar workers not working in the home, we see that this workforce has higher rates of stress, depressive symptoms and loneliness,” said Sterling, who co-authored a 2021 report which found that nearly 21 percent of home health workers struggle with poor mental health.

The job is marked by high turnover and vacancies, particularly in the wake of the coronavirus pandemic—a time when many direct care workers left the workforce.

“For how much you’re getting paid—$16, $17 an hour—it’s often easier to go to a local retail store and get paid that much for work that is a little bit less emotionally and physically demanding,” said Priya Chidambaram, senior policy manager with the program on Medicaid and the uninsured at KFF.

Meanwhile, the continued aging of baby boomers will ensure a demand for home care. Pew Research Center polling has found that the majority of older Americans would like to “age in place,” that is, in their own homes with a caregiver. One 2021 report found that more than half of all adults older than 65 will develop a serious disability and use some form of paid long-term services and supports.

“As people need more and more of that care over the course of the day, it may not be possible for their kids or for a neighbor, or … for someone in their community to help them out more informally,” said Chidambaram. “As someone’s need increases, the likelihood that they are going to need professional care is going to increase.”

It is not unheard of for the demand for home health care to exceed the supply. One 2023 study found that the number of home care workers per 100 participants in the Medicaid home and community-based services program declined by 11.6 percent between 2013 and 2019. According to the Bureau of Labor Statistics, there will be an increase of nearly 740,000 home health and personal care aide jobs between 2025 and 2034, a 17 percent growth rate—by comparison, the average growth rate for all jobs is 3 percent.

However, that growth may be insufficient. According to the health policy organization PHI, the home care workforce will add 772,000 new direct jobs over the next decade, the majority of which will be for the home care workforce; however, there will also be 9.7 million job openings in direct care as a whole from 2024 through 2034.

Those struggles to meet demand may be exacerbated by recent federal policy changes, including dramatic cuts to Medicaid approved by Congress last year. Despite confusion among many adults over how long-term care is financed, Medicare—the public health program for elderly Americans—does not cover long-term stays in nursing facilities, nor does it pay for the majority of home-health services. Instead, Medicaid, which provides health care for low-income individuals and is jointly funded by federal and state governments, covers the bulk of long-term care costs in the country. This can also help explain lower wages for home health care aides, as Medicaid reimbursement tends to be less than that of Medicare or other insurance.

Although states are required to provide nursing facility care through Medicaid, they can choose whether to provide home care services such as personal care, as well as household activities such as cooking meals. Slashing federal Medicaid spending could thus lead to a reduction in state coverage of home care. The last time there was a major reduction in federal Medicaid spending, in 2011, it also resulted in dramatic cuts to state spending on home care.

States have a few options for reducing Medicaid spending, said Damon Terzaghi, vice president for Medicaid advocacy and programs at the National Alliance for Care at Home: reducing eligibility, reducing the number of services—either by eliminating certain services, or providing fewer covered services—or reducing the amount paid for services.

“We are seeing combinations of all three of those types of proposals in the home care space directly,” said Terzaghi. He highlighted states like Idaho, where lawmakers are drafting legislation that would cut funds for home care services through Medicaid, and Colorado, where state Medicaid officials paused a controversial plan to cap the number of hours a family caregiver could bill for providing medical care.

Immigration policy will also affect the home care labor force, as immigrants comprise one in three workers in the home care setting. Historical data has shown that previous crackdowns on immigration have led to a reduction in home health care workers. Conversely, another recent working paper found that increasing immigration has a positive effect on American longevity. For example, large populations of Haitians work in elder care; as their Temporary Protected Status is under doubt, it could have dramatic ripple effects for the industry and the health of older Americans.

Then there is the impact on labor force participation for family members of those who require long-term care. Katherine Miller, an associate professor at the Bloomberg School of Public Health at Johns Hopkins University, noted the relationship between paid home care workers and the support systems that may need to be relied upon in the event of a significant shortage in the former. It is often family members who step in when a loved one becomes ill, and may be affected by a shortage in home aides.

“I often think of the direct care workforce as one side of the coin and the other side of the coin being families and friends who provide unpaid help, and the impact that all these policies can have on them as well,” said Miller.

Indeed, there is a clear connection with paid and unpaid home care aides, as caring for a family member can be a pathway to seeking that work elsewhere. Recent KFF focus groups found that most home care workers joined that workforce because they were able to help people, often beginning with someone they knew.

“These individuals have started delivering care on an informal basis, and it’s become a paid job. Sometimes, when the paid job for their family member or loved one or whomever ends they transition to another client, because the work is so rewarding, and they really value that engagement with the individuals,” said Terzaghi. These are the kinds of workers who might be affected by a state’s decision to limit pay for home caregivers as a potential method for cutting Medicaid costs.

Despite the high turnover rate, those who do remain in the workforce may experience high job satisfaction. In interviewing these workers for qualitative studies, Sterling said that home health aides see their positions as a “calling,” despite the struggles that accompany it.

“‘If I’m not doing that, who will?’ We hear that all the time,” Sterling said.