What did the California analysis model?

A 10% cut to In-Home Supportive Services hours and to slots in four other Medi-Cal home and community-based programs, with 3% of people at a nursing facility level of care moving into nursing facilities as a result.

Would the cuts save money?

No, according to the model. California's Medi-Cal long-term care spending would rise $57 million in the first year and about $1.17 billion from 2026 through 2030, because nursing facility care costs the state $34,000 to $60,000 more per person per year and costs grow faster.

Does the analysis cover I/DD services?

No. The brief covers five programs for people who need a nursing facility level of care and says programs focused on people with intellectual or developmental disabilities were not included.

California home care cuts could add $1.17B in costs by 2030

A 10% cut to five Medi-Cal home and community-based services programs would raise California's long-term care costs by $57 million in year one and $1.17 billion over 2026-2030, an ATI Advisory brief for CHCF published Oct. 23, 2025, found.

Direct Support News desk · October 23, 2025 · Updated September 26, 2026 · 2 min read

Cutting five Medi-Cal home and community-based services programs by 10% would cost California more, not less: $57 million more in the first year and about $1.17 billion more from 2026 through 2030. That is the finding of a model built by ATI Advisory for the California Health Care Foundation.

The foundation published the issue brief, "How Could Cuts to Medi-Cal Home and Community-Based Services Impact California?", on Oct. 23, 2025, with a technical appendix.

Which programs were modeled

The model covers five programs for Medi-Cal enrollees who need a nursing facility level of care: In-Home Supportive Services (IHSS), the Home and Community-Based Alternatives Waiver, Community-Based Adult Services, the Assisted Living Waiver and the Multipurpose Senior Services Program. Together they serve nearly 500,000 people at that level of care. IHSS alone accounts for about 443,000, or 89%. About 56,000 Medi-Cal enrollees at that level of care live in nursing facilities.

The brief notes that programs focused specifically on people with intellectual or developmental disabilities are not included.

What the model assumed

The scenario is a 10% cut to IHSS hours and a 10% cut to available slots in the other four programs. The model assumes that just 3% of the people served at a nursing facility level of care would then move into nursing facilities. The authors call that a conservative assumption, since others might rely more on unpaid family or go without help.

What it found

Nursing facility care costs California $34,000 to $60,000 more per person per year than these home care programs, or $62,000 to $113,000 more when federal Medi-Cal dollars are counted. Because nursing facility costs are projected to grow faster than home care costs, the gap widens each year, reaching about $1.17 billion over five years.

The shift would also use up the state's spare nursing facility capacity. The brief puts it at 16,123 unfilled beds, about 3 for every 100 people receiving home care at a nursing facility level of care. Moving 3% of that group would fill every one. The model counts costs only up to that limit, so it leaves out people who could not find a bed, longer hospital stays and other costs.

Why the programs are exposed

Nursing facility care is a mandatory Medicaid benefit, while most home and community-based services are optional, which makes them easier to cut when budgets are tight. The brief points to federal cuts under the July 2025 reconciliation law, H.R. 1, and notes that Medi-Cal is about 15% of California's general fund spending. After the Great Recession, it says, every state cut eligibility or spending in at least one home care program between 2010 and 2012.

Why this matters for providers and DSPs

Providers in many states are hearing that home and community services could be trimmed to balance budgets. This model gives agencies and advocates a concrete, state-specific way to show lawmakers that such cuts can backfire, pushing people into costlier settings and straining nursing facility and hospital capacity. California I/DD providers should note that their programs were not modeled, so the brief does not estimate the effect of cuts to developmental services.