Colorado has put on hold its plan to pay many parents and other family members who provide live-in care to adults with developmental disabilities at the lower host-home rate. As of Sept. 26, 2026, the change remains paused.
The state's Department of Health Care Policy and Financing (HCPF) paused the effort in an operational memo, OM 26-009, effective Feb. 3, 2026, after the legislature's Joint Budget Committee chose to table it. The Colorado Sun first reported the plan in November 2025.
What the state planned
The change, called Individual Residential Services and Supports (IRSS) rate alignment, would have redefined settings in the state's developmental disabilities waiver. A home where the paid caregiver lives with the person and provides at least 51% of the supports would be classified as a "shared living environment," the same category as host homes, and paid at that rate. Many family caregivers had been billed at the rate for staffed homes, where workers come in on shifts. The Colorado Sun reported the difference would mean a cut of up to 10% for some families.
HCPF adopted the definitions through an emergency rule dated Jan. 9, 2026. The rule estimated that the change touched about 6,000 members receiving IRSS services and projected $1.45 million in state general fund savings in fiscal 2025-26. The Colorado Sun had reported savings of about $2.4 million; the state's rule uses the $1.45 million general fund figure.
The rule acknowledged that some family caregivers would be paid less. It said those changes followed years of investment, including a 36% pay increase for family caregivers and similar providers over five years.
Why it was paused
The plan was one of several long-term services and supports cuts the state began under a governor's executive order to address a budget shortfall tied to the 2025 federal reconciliation law, H.R. 1, and Colorado's structural deficit. HCPF issued operational guidance on Jan. 15, 2026, for changes planned to start April 1. After the Joint Budget Committee tabled the initiative, the Feb. 3 memo told case managers to stop related discussions, prior authorization requests and plan revisions, and to undo any setting changes already made. Residential providers were told to stop setting determinations. The memo expires Dec. 31, 2026.
Other changes families were watching
The Colorado Sun also reported in November 2025 that the state planned to end automatic entry into adult services for young people with the highest support needs, who had been able to skip an eight-year waitlist. Parents argued that their care costs far less than an institution, which the Sun reported runs about $1,080 a day at a state regional center.
Why this matters for providers and DSPs
Family caregivers are part of the direct support workforce, and the agencies that employ them bill at these rates. For now, agencies should keep billing under existing rules and watch for new Joint Budget Committee action or guidance before the memo expires at the end of 2026. The episode also shows how states are targeting fast-growing services rather than cutting every rate.