Unit 3: What does this risk look like in real life?

Waiting lists grow when there is not enough funded capacity to serve everyone who needs or seeks HCBS. That capacity depends heavily on federal Medicaid matching dollars, which supplement state Medicaid spending.

HCBS are one part of the larger Medicaid program. The federal government and states share Medicaid costs, with states receiving federal matching funds for allowable Medicaid spending. When federal Medicaid support is reduced or financing policies reduce the federal dollars states can draw down, states must either replace those dollars with additional state funds or make budget decisions about where spending can be reduced or limited.

Most HCBS are optional Medicaid services, and many HCBS waiver programs allow states to limit how many people they serve. When there is not enough funding to maintain or expand waiver capacity to meet demand, people wait.

The pressure is being added to a system that already has substantial unmet demand. In 2025, 41 states had HCBS waiting or interest lists, with more than 600,000 people on those lists. Twenty-nine states reported that their lists had grown from the previous year. KFF notes that these data describe waiting lists before many provisions of the 2025 federal Medicaid law take effect.

Funding also affects whether enough providers and qualified workers are available to deliver services. A waiver opening alone does not guarantee that a person will actually receive all the support they need if provider and workforce capacity cannot keep up with demand.

Reductions in federal Medicaid support put pressure on both sides of the waiting-list problem: the number of people states have funded capacity to serve and the provider and workforce capacity needed to actually deliver those services.

Sources:

• KFF — A Look at Waiting Lists for Medicaid Home- and Community-Based Services from 2016 to 2025 Opens in a new window
• MACPAC — Medicaid FinancingOpens in a new window

Approved service hours do not guarantee that a worker will be available to provide them.

When workers are unavailable:

• appropved hours may go uncovered;
• a person may miss assistance with personal care, communication, health-related needs, employment, transportation, appointments, or community activities;
• families or other unpaid supporters may have to provide the missing support;
• hours that are not provided are not recorded as delivered; and
• service records may show lower use of approved hours even when the person’s need has not decreased.

For people who need assistance for health or safety, an uncovered shift can also create immediate risks.

Unfilled hours do not necessarily mean reduced need. They may mean that no qualified worker was available to provide the support.

Source note: In ANCOR’s 2025 provider survey, 62% of responding community-based providers serving people with intellectual and developmental disabilities (I/DD) reported turning away new referrals because of inadequate staffing.

Source:

• ANCOR, The State of America’s Direct Support Workforce Crisis 2025Opens in a new window

Having a worker present is not enough. It is essential for the worker to have the skills and person-specific training to support that individual safely and effectively.

Generic agency training may cover basic topics but still leave a worker unprepared for a person’s specific communication, mobility, equipment, health routines, preferences, or ways of participating in everyday life.

Depending on the person, individualized training may include learning how to:

• support the person’s communication and choices, including augmentative and alternative communication (AAC);
• use assistive technology;
• follow an individualized eating or feeding protocol;
• assist safely with mobility, transfers, or positioning;
• use or maintain health-related equipment;
• charge, position, or safely transport a wheelchair or other equipment;
• recognize the person’s individual health and safety concerns; and
• provide assistance in a way that supports participation rather than simply doing tasks for the person.

Continuity matters too. When workers leave frequently, people may repeatedly lose staff who have learned their communication, routines, equipment, preferences, and support needs—and have to start over with someone new.

The Medicaid and CHIP Payment and Access Commission (MACPAC) notes that direct support professionals provide a broader range of support than personal care aides, including employment support, and that there are no uniform federal training standards for DSPs.

Source:

• MACPAC, State Efforts to Address Medicaid Home- and Community-Based Services Workforce Shortages

Having a worker present is not the same as having qualified, person-specific support.

History shows what can happen when federal Medicaid support falls while states are under financial pressure.

After enhanced federal Medicaid funding provided during the Great Recession was reduced, every state and the District of Columbia reduced spending in at least one home and community-based services (HCBS) program between 2010 and 2012. States reduced inflation-adjusted spending per person, served fewer people, or did both.

The pattern appeared again as temporary federal HCBS funding provided through the American Rescue Plan Act (ARPA) began to run out. ARPA temporarily increased the federal Medicaid match for qualifying HCBS expenditures by 10 percentage points, and states expected to spend nearly $37 billion to enhance, expand, or strengthen HCBS. Nearly all state spending plans included workforce-development initiatives such as recruitment and retention efforts, pay increases, bonuses, and training.

As those temporary funds were exhausted, five states—Connecticut, Maryland, New Jersey, Washington, and Wyoming—reported plans to eliminate provider-payment increases supported by the federal funding. Arizona, Maine, and Nebraska reported plans to eliminate other additional provider payments. More recently, Wyoming reported reductions to some HCBS rates in fiscal year 2026 specifically because the enhanced ARPA HCBS funding had expired.

For the direct support workforce, these funding decisions can affect whether providers can offer competitive wages and benefits, recruit and retain workers, provide adequate training, and maintain enough capacity to deliver services. People can be approved for services and still be unable to receive them.

Reducing or underfunding community services does not make the need for support disappear.
Unmet needs can affect health and well-being, employment, autonomy, relationships, and participation in community life. Families may have to fill service gaps, providers may reduce capacity or close, and costs and responsibilities can shift to families, health-care systems, other public programs, and more restrictive forms of care.

Sources:

• Health Affairs — History Repeats? Faced With Medicaid Cuts, States Reduced Support for Older Adults and Disabled PeopleOpens in a new window
• CMS — Strengthening and Investing in HCBS under ARPA Section 9817Opens in a new window
• KFF — Payment Rates for Medicaid Home Care: States’ Responses to Workforce ChallengesOpens in a new window
• KFF — A View of Medicaid Today and a Look AheadOpens in a new window

A provider shortage can affect much more than whether someone can find a home-care agency. People who use home and community-based services may also need therapists, behavioral-health providers, physicians and specialists, dentists, vision care, assistive technology, equipment and repairs, transportation, employment supports, and other community services.

When there are not enough providers—or when available providers cannot meet a person’s needs—people may have to:

• wait months for appointments, services, equipment, or repairs;
• travel long distances to find a provider;
• depend on transportation that may be difficult or unavailable;
• accept a provider who is not a good match;
• go without a needed service;
• rely more heavily on family or other unpaid support;
• miss work, school, recreation, relationships, or other parts of community life; or
• experience worsening health, safety, independence, or quality of life.

Having a provider nearby does not necessarily mean the service is accessible. A provider also has to be able to support the person effectively.

For example, accessibility may require:

• accessible examination or treatment equipment;
• help with transfers, positioning, or mobility;
• enough time for an appointment or procedure;
• communication access, including augmentative and alternative communication (AAC);
• staff who communicate directly with the person and presume competence;
• knowledge of the person’s disability, health needs, equipment, or support needs; and
• flexibility in how an examination, treatment, therapy, or other service is provided.

A person may technically have a provider available and still be unable to receive appropriate care if those supports are missing.

Provider shortages can be especially difficult in rural or other underserved communities, where there may be only one provider—or no provider at all—for a particular service. When choices are limited, people may have little ability to change providers when services are poor, inaccessible, unreliable, or not a good fit.

Moving a person into an institution does not eliminate these shortages. Nursing facilities and other institutional settings also experience shortages of workers and health-care providers, reliance on temporary staff, delays or missed care, and problems with continuity. Frequent staff changes can also make it harder for workers to learn a person’s communication, routines, preferences, health changes, and individual support needs.

Having enough names on a staffing schedule is not the same as having a stable workforce that knows the people it supports.

When appropriate services are unavailable in the community, that is not evidence that the person needs an institution. It is evidence that the community service system does not have enough capacity to meet the person’s needs.

Gaps in community services are not evidence that people need institutions; they are evidence that the community system needs to be strengthened.

Sources:

• KFF — Payment Rates for Medicaid Home- and Community-Based Services: States’ Responses to Workforce ChallengesOpens in a new window
• MACPAC — State Efforts to Address Medicaid Home-and Community-Based Services Workforce ShortagesOpens in a new window
• National Academies of Sciences, Engineering, and Medicine — The National Imperative to Improve Nursing Home Quality: Honoring Our Commitment to Residents, Families, and StaffOpens in a new window
• Mukamel et al., JAMA Network Open — Association of Staffing Instability With Quality of Nursing Home CareOpens in a new window
• Bowblis et al., Health Affairs — Nursing Homes Increasingly Rely On Staffing Agencies For Direct Care NursingOpens in a new window

Medicaid is the primary payer for many home and community-based services (HCBS). The amount Medicaid pays providers affects whether organizations can hire and retain workers, cover the costs of providing services, expand into underserved areas, and continue offering services at all.

When Medicaid payment rates do not keep pace with the cost of providing services, providers may have difficulty:

• paying competitive wages and benefits;
• recruiting and retaining qualified workers;
• providing training and ongoing staff development;
• maintaining enough staff to accept new people;
• serving rural or other areas where services cost more to deliver;
• providing services that require specialized skills or additional staff time; or
• remaining financially able to provide the service.

The result can be fewer providers, less provider capacity, longer waits, and fewer real choices for people who need services.

This is already a widespread problem. In KFF’s 2025 survey, states reported shortages across multiple types of Medicaid home-care providers, and 41 states reported permanent closures of HCBS providers during the previous year. States also identified increasing Medicaid payment rates as their most common strategy for addressing workforce shortages.

Federal Medicaid funding matters because states and the federal government share the cost of Medicaid. When federal Medicaid support is reduced, states must decide whether and how to replace those dollars or reduce Medicaid spending. Because most HCBS are optional Medicaid benefits, states have several ways to restrain HCBS spending, including limiting waiver enrollment or spending, limiting the amount of particular services people receive, and changing provider payment rates. KFF reports that states used these types of strategies during previous periods of major Medicaid funding pressure.

Provider payment is particularly important because a service that exists on paper is not really available if there is no provider with the capacity to deliver it. MACPAC has concluded that HCBS workforce shortages reduce Medicaid’s ability to serve people in their homes and communities and that adequate Medicaid payment rates are an important tool for attracting and retaining the workforce needed to provide those services.

That means funding pressure can create a cycle:

Lower or inadequate funding → providers struggle to maintain capacity → fewer qualified workers and providers are available → more authorized services go unfilled → people and families experience greater unmet need.

Cutting HCBS spending does not reduce people’s underlying need for support. It can reduce the system’s capacity to meet that need.

Sources:

• KFF — Payment Rates for Medicaid Home Care Ahead of the 2025 Reconciliation LawOpens in a new window
• KFF — States’ Management of Medicaid Home Care Spending Ahead of H.R. 1 EffectsOpens in a new window
• MACPAC — Medicaid Payment Policies to Support the HCBS WorkforceOpens in a new window

Support coordination should be more than completing paperwork or submitting service requests. Good support coordination begins with knowing the person—their needs, strengths, preferences, communication, routines, relationships, and goals.

A support coordinator should help the person:

• understand available services, supports, and choices;
• identify needs that are not being met;
• develop and carry out a person-centered plan;
• find providers and services that fit the person;
• connect with opportunities for employment, health care, recreation, transportation, relationships, and community participation;
• address problems when services are unavailable or are not working; and
• understand other options that may help meet the person’s needs.

People cannot consider services or options they have never been told about. Meaningful support coordination should help people understand what is available rather than expecting them to already know what to ask for.