The Budget Reality
Simplify Your Home Care Operations
CareCade helps DDA and HCBS providers manage scheduling, EVV, and billing in one platform.
When money gets tight, home and community-based services (HCBS) face pressure. According to KFF's analysis, 15 states are planning new cost containment strategies for fiscal year 2026.
This isn't theoretical. It affects the authorization hours your family member receives.
What States Are Planning
Service Limits
According to KFF, 12 states plan to adopt new waiver service limits in FY 2026:
- 8 states implementing new caps on spending for specific waiver services per participant
- 5 states implementing limits on the quantity of personal care services
When states cap services, families receive fewer authorized hours. The care need doesn't change—only the funding.
Cost Containment Strategies
Nearly a third of responding states (15) reported planning to adopt new strategies, including:
- Rate freezes - Providers don't receive increases despite inflation
- Authorization scrutiny - Tighter reviews of requested hours
- Utilization management - More frequent reassessments of need
- Waiting list management - Longer waits for services to begin
Why This Is Happening
The Federal Squeeze
H.R. 1 reduces federal Medicaid funding by an estimated $700 billion over the next decade. States receive less federal matching money, so they must either:
- Raise state taxes to fill the gap
- Cut services to fit reduced budgets
- Find efficiencies (which often means restrictions)
Most states are choosing some combination of cuts and restrictions.
State Budget Pressures
Washington faces a $2.3 billion deficit. Other states face similar challenges:
- California's Medi-Cal commission is preparing for federal cuts
- New York is implementing home care minimum wage increases while managing costs
- Florida, Texas, and other large states face billions in potential federal funding reductions
When state budgets strain, HCBS programs—which are largely optional under Medicaid—become targets.
The Optional Nature of HCBS
Here's the uncomfortable truth: most home and community-based services are optional under Medicaid. States aren't required to offer them.
According to MACPAC, HCBS waivers give states flexibility but also discretion. When budgets tighten, optional programs face cuts before mandatory ones.
What This Means for Families
Authorization Reviews
Expect more scrutiny when authorizations are requested or renewed:
- More documentation required to justify hours
- More frequent reassessments of care needs
- Tighter interpretation of eligibility criteria
- Longer approval timelines as reviews become more thorough
Potential Hour Reductions
If your family member currently receives 40 hours per week and your state implements caps, you might face:
- Reduction to state-defined maximum
- Requirement to demonstrate "exceptional" need for current level
- Phased reductions over time
Waiting Lists
States may also manage costs by:
- Slowing new enrollments
- Extending time between application and service start
- Creating or extending waiting lists for certain services
The Bigger Picture
According to PwC's Future of Health report, healthcare is in the midst of a fundamental transformation:
- $5 trillion in annual US healthcare spending
- 90% of costs go to chronic and mental health conditions
- $1 trillion projected shift toward home-based care by 2035
The irony: just as the healthcare system recognizes that home-based care is more effective and cost-efficient than institutional care, budget pressures are constraining HCBS programs.
The long-term trend favors home care. The short-term budget reality creates restrictions.
How to Protect Your Services
Document Everything
When authorization reviews tighten, documentation is your defense:
- Care needs - Specific assistance required for activities of daily living
- Progress - How services are helping achieve goals
- Medical necessity - Healthcare provider statements supporting need
- Family circumstances - Why informal supports can't fill the gap
The more thoroughly documented your case, the stronger your position in authorization reviews.
Understand Your Rights
Each DDA waiver has specific service parameters. Know:
- What services you're entitled to under your waiver
- What the appeal process is if services are reduced
- What advocacy resources are available
- What timelines apply to decisions
Build Relationships
Case managers have discretion in recommendations. When they know your family:
- They understand the full picture of care needs
- They can advocate more effectively for your services
- They're more likely to flag you for exceptions if caps apply
Track Your Care
When your care is documented:
- You have evidence of services actually provided
- You can show outcomes and progress
- You have data to support authorization requests
- You can demonstrate the impact if services are reduced
Prepare for Advocacy
If your services face reduction:
- Know the appeal process before you need it
- Connect with advocacy organizations (Washington State Developmental Disabilities Council)
- Document the impact of any reductions
- Engage your case manager as an ally
What Agencies Should Know
Authorization Volatility
As states tighten controls, authorization levels may become less predictable:
- Hours authorized may decrease
- Renewals may take longer
- Documentation requirements may increase
- Appeals may become more common
Build flexibility into your operations.
Documentation as Defense
When authorizations are scrutinized, the agencies that document outcomes have an advantage:
- Client goal progress
- Family engagement
- Care quality metrics
- Demonstrated impact
Agencies that can show services are achieving results are more likely to see those services maintained.
Advocacy Role
Agencies serve families. When families face service reductions:
- Help them understand the process
- Support their documentation needs
- Connect them with advocacy resources
- Provide data that supports their case
Your advocacy strengthens client relationships and serves your mission.
How CareCade Helps Families Protect Services
When authorizations tighten, CareCade provides the documentation families need:
Verified Care Records
- GPS-confirmed visits - Proof that services actually occur
- Activity documentation - What happened during each visit
- Progress tracking - How care is helping achieve goals
- Comprehensive logs - Complete record of services provided
Outcome Documentation
- Goal progress over time - Evidence that services are working
- Family engagement records - Documentation of involvement
- Care consistency - Proof that services are reliable
- Quality indicators - Data that demonstrates value
Family Portal Access
The Family Portal keeps families informed:
- See exactly what services are provided
- Track progress toward goals
- Access records for authorization requests
- Stay connected even when you can't be there
Reports for Authorization
When you need to support an authorization request or appeal:
- Export care records
- Generate progress summaries
- Document service utilization
- Provide evidence of need
The Advocacy Perspective
KFF notes that 5.1 million Medicaid enrollees use home care services. Medicare generally doesn't cover long-term care—Medicaid paid for two-thirds of home care spending in 2023.
These aren't abstract numbers. They're people—your family members—who depend on services that face budget pressure.
Advocacy matters. Voices matter. Documentation matters.
When states consider where to cut, they need to hear from families about the impact. When authorizations are reviewed, they need to see evidence of care's value.
Silence makes cuts easier. Data makes cuts harder.
Looking Ahead
The budget pressures are real. H.R. 1 is law. State deficits are growing. Cost containment is coming.
But HCBS remains essential. Families still need care. The alternative—institutional care—costs more and serves people worse.
The families that navigate this best will be those who:
- Document thoroughly - Evidence of need and impact
- Engage proactively - Relationships with case managers and advocates
- Understand the system - Rights, processes, timelines
- Advocate effectively - Voice in policy discussions
Be prepared. Be documented. Be heard.