The Impact Of Immigration Curbs

Start with President Trump’s aggressive efforts to slash immigration and deport current foreign-born workers, even those who have been here legally. That adds to an already-existing shortage of direct care workers which harms people living at home and in facilities.

Prior to Trump’s crackdown, about a third of care workers were immigrants. It is impossible to know how many aides, nurses, and companions have left their jobs due to these restrictions. But home care agencies and families report it is harder than ever to find staff.

Those they can hire are more costly than ever. In 2025, families paid an average of $35 per hour for a home care aide hired through an agency, and often are required to pay for a minimum of four hours for each visit.

Assaulting Medicaid

The aide shortage also raises costs for Medicaid, the largest payer of long-term services and supports. And that’s happening as the federal government is taking multiple steps to slash program funding.

A quick bit of background: Medicaid is operated by the states but overseen by the federal Centers for Medicare and Medicaid Services. CMS sets the overall rules but states can apply for waivers from some regulations.

One very important rule: States must provide Medicaid long-term care in nursing homes. They can request waivers to offer home and community-based care as well, and every state has. About two-thirds of those who are receiving Medicaid LTSS benefits live in the community and not in nursing facilities.

But home-based support is not required and, unlike nursing home care, states can cut or even drop those home-based services.

In 2025, Medicaid spending exceeded $900 billion, with the feds paying about two-thirds of all costs. The program spent more than $200 billion on long-term services and supports alone, both in the community and in nursing homes.

The Big Beautiful Bill

But last summer’s big budget bill made deep cuts in all of Medicaid.

It limited access to the program by imposing new work and paperwork requirements for beneficiaries. People will need to prove their eligibility at least twice a year.

Those tough new rules will not only limit access to care for older adults and people with disabilities, they also could end Medicaid benefits for some family members who leave their jobs or reduce their work hours to care for relatives.

The measure also directly cuts the federal contribution to Medicaid for states that expanded the program under the ACA. And it will limit the ability of states to increase their Medicaid budgets by imposing taxes on providers such as hospitals and nursing homes.

The Robert Wood Johnson Foundation estimates between 4.9 million and 10.1 million people will lose Medicaid coverage in 2028 just due to work requirements and more frequent eligibility checks. Others may lose benefits because of budget cuts themselves.

While states still are wrestling with how to respond to the direct cuts in federal payments, several are looking to limit their HCBS programs. They could do this in several ways, including limiting benefits, making it harder to enroll, or cutting payments for home care or nursing homes.

Seeking Fraud

The Administration did not stop there. In recent months, it opened and aggressively promoted Medicaid fraud investigations into states including California, Maine, New York. Colorado, Illinois, Minnesota, Oregon, and Washington. Some investigations directly targeted home-based personal care, others were aimed at benefits for immigrants.

The White House efforts are so far had mixed results.

In New York State, the administration was forced to acknowledge that it badly overstated data it claimed proved widespread fraud. When he opened a wide ranging investigation into New York’s Medicaid HCBS program, CMS administrator Mehmet Oz alleged the state provided five million people, or three-quarters of its total enrollees, with personal care services.

But CMS now has conceded that fewer than one-tenth that many, or about 450,000, used home care benefits. And much of that care was appropriate. CMS, however, is continuing its investigation.

The White House had better luck in Minnesota. It initially threatened to cuts $500 million in federal Medicaid funds, then scaled that back somewhat. On April 6, a Trump-appointed judge rejected a state effort to block the Trump Administration from reversing $259 million in federal payments while its investigation into Medicaid fraud continues.

There undoubtedly is fraud in Medicaid programs, and states should step up to prevent it. However, CMS itself estimates that “improper payments” in the program amount to only about 6%. And many of those payments resulted from billing disputes rather than fraud.

More important, nearly all payments are to providers such as doctors, hospitals, and nursing homes that Medicaid pays directly for services. While many states have modest programs to pay family caregivers, this self-directed care amounts to only about 6% of Medicaid spending.

Yet, the real victims of the Administration’s Medicaid cuts often are older adults and younger people with disabilities. According to recent surveys, about three-quarters of Americans want to age at home, if they are physical and cognitively able. Why is the Trump Administration, which calls consumer choice a top priority, making it so hard for them to do so.