Eighty-five percent of I/DD provider agencies still report moderate or severe staffing challenges, according to ANCOR’s seventh annual survey of 524 organizations in all 50 states and the District of Columbia. The State of America’s Direct Support Workforce Crisis 2026 report, released Sept. 30, finds little recovery in the ability to recruit and retain DSPs even as federal Medicaid funding pressure grows.

More than half of respondents (55%) said they turned away new referrals for lack of staff. Twenty-nine percent discontinued programs already serving people, 57% delayed launching new programs, and 48% are considering further cuts if recruitment does not improve. Thirty-six percent reported more frequent reportable incidents tied to staffing shortages. Fifty-nine percent serve areas with few or no other providers, and 56% of those delivering case management said they struggle to connect people to available services.

When providers had to eliminate supports, residential habilitation was named most often (40%), followed by home-based services (31%) and day habilitation (26%). ANCOR says the share of providers forced to drop home-based and day habilitation because of staffing doubled compared with the 2025 survey.

Medicaid funding pressure shapes decisions

Fifty-six percent of respondents said the threat of state reimbursement cuts or service reductions tied to last year’s budget reconciliation law (H.R. 1) influenced decisions not to expand this year. Forty-six percent said they would need to discontinue programs within three months if Medicaid payments were paused or delayed. Thirty-eight percent employed at least one DSP through an immigrant or nonimmigrant visa, a figure ANCOR flags as immigration-policy sensitive.

CEO Barbara Merrill said the most troubling finding is “how little has changed,” calling crisis conditions a “dangerous equilibrium.” The report urges higher federal support for HCBS, rates that cover competitive DSP wages, a standard occupational classification for DSPs, careful review of immigration impacts, and program-integrity efforts that do not freeze payments to good-faith community providers.

Why this matters for providers and DSPs

These numbers describe the daily reality for agencies and the people they support: referrals refused, programs delayed, and residential and day supports cut when shifts cannot be filled. Managers planning budgets for 2027 should treat the 46% “three-month payment pause” finding as a continuity risk, and frontline teams should expect caseloads and overtime pressure to stay high until rates and recruitment improve. Families on waiting lists face a second barrier even after a slot opens — finding a provider with staff.