The Institutional Bias: How Medicare and Medicaid Shortchange Home Care

Medicare and Medicaid provide vital healthcare funding, yet a deep structural divide exists between the institutional care public policy guarantees and the everyday support people need to stay at home and maintain independence, writes James A. Lomastro for Nonprofit Quarterly.

Medicare covers acute medical treatment, but it explicitly excludes ongoing non-medical support for daily activities such as bathing, dressing, meal preparation, and transportation. Medicaid covers long-term care, but under federal law, nursing home placement is a mandatory benefit, whereas home- and community-based services (HCBS) remain largely optional for states. As a result, states frequently cap HCBS enrollment, creating waiting lists that averaged roughly 32 months in 2025.

Having a formal referral or meeting eligibility criteria does not ensure access. In Florida, for instance, severely impaired children authorized for up to 80 hours of weekly home care regularly receive far less due to severe provider shortages. Nonprofits attempt to bridge these deficits by providing meals, transit, and crisis intervention, but low reimbursement rates and unstable, project-based grants are squeezing these organizations.

The burden falls primarily on unpaid family members, who are often aging themselves; federal data shows nearly one million US households include an adult with an intellectual or developmental disability cared for by an aging parent or guardian.

Addressing this crisis requires establishing a “community-first” standard in federal and state policy, making access to home care as enforceable as institutional care. Solutions include enforcing transparent reporting on waiting lists and unfilled hours, providing direct operating infrastructure funding to community nonprofits, raising wages for direct-care workers, and giving the people receiving care a voice in governing policy decisions.