As states absorb Medicaid funding cuts, family caregivers face financial ruin

Politics As states absorb Medicaid funding cuts, family caregivers face financial ruin Several states have proposed slashing wages for family caregivers of people with disabilities Manage alerts for this article Email this article Share this article By O. Rose BroderickJuly 13, 2026 Disability in Health Care Reporting Fellow O. Rose Broderick[email protected]Rose covers disability and mental health, and she helps write STAT’s daily Morning Rounds newsletter. Confidential tips can be sent to Rose on Signal at rosebroderick.11. In 2018, Kristine Fifer was lucky to avoid bankruptcy. Her son, Eddie, had lost the nurse provided to him by the state after he turned 22. Maryland health officials told Fifer that he didn’t qualify for nursing care, even though Eddie’s cerebral palsy, feeding tube, and other complex medical conditions require around-the-clock care. Fifer spiraled as she sought to pay for the care Eddie needed. She lost her job, took on heaps of debt as bills piled up, and eventually called a lawyer about filing for bankruptcy. Advertisement “I lost everything,” said Fifer, who also has a 13-year-old son. Then Fifer found out about self-direction. The program allows Medicaid waiver participants like Eddie and their families to manage their own care and even receive payment from the state for their caregiving. The program wasn’t perfect and her debt didn’t dwindle, but Fifer was able to catch her breath as she employed her mother and a family friend to look after her son, as well. The calls about foreclosing her home stopped. But eight years later, Fifer’s luck has run out. Advertisement Thousands of family caregivers of people with intellectual and development disabilities in Maryland are facing a grim future after the Maryland Department of Health’s Developmental Disabilities Administration proposed steep cuts to their wages earlier this summer. Some caregivers are looking at $20 per hour pay cuts. The new wage tables were slated to go into effect July 1, but pushback from disability advocates delayed the changes to October. They say the cuts will force families to make an impossible choice between going bankrupt and institutionalizing their loved ones in facilities that often face higher rates of abuse and neglect. “With these new cuts, I’m done. I’m going to foreclose,” Fifer said, fighting back tears. “It’s either I ride it out until the very last day until they kick us out of our home, or I put him in an institution.” Maryland is not an isolated case. Idaho, Indiana, Missouri and Colorado have all introduced proposals in 2026 that would dramatically slash pay for family caregivers and community care. Ohio legislators even proposed banning family members from being certified caregivers before ultimately dropping the measure. These states’ moves are a sign of the deadline looming over state health departments as the $1 trillion Medicaid funding cut tucked in the 2025 GOP-backed tax bill goes into effect Jan. 1, 2027. “We know from the past that whenever the federal government reduces Medicaid, almost every state has made cuts to home and community-based services, and that those optional services include paying family caregivers,” said Kim Musheno, senior director of Medicaid policy at The Arc, a national nonprofit that advocates for people with developmental and intellectual disabilities. Soon after President Trump started his second term and discussed cutting Medicaid funds, disability advocates raised the alarm that home and community-based services probably would feel the brunt of those cuts, since the care is not mandatory. Since then, the Trump administration has targeted family caregivers, with health secretary Robert F. Kennedy Jr. saying in April that Medicaid-funded programs that pay family caregivers are “rife with fraud” and that those caregivers are doing tasks they used to do for free. Advertisement Kennedy was not talking specifically about the self-direction program, and data do not exist about the amount of fraud in this type of care. Users of the program have doubled in the last decade to over 1.5 million individuals who manage their own care in the community, according to a 2024 report from AARP. Qualifying for this program differs based on a person’s medical condition and varies by state, but it is most widely used for people with intellectual and developmental disabilities who have high care needs. While financial data on this group is not readily available, people with disabilities are generally poorer and are more than twice as likely to have medical debt than people without disabilities. In Maryland, there are roughly 3,900 people who self-direct their Medicaid services, often the mother of an adult child with a disability. The proposed wage cuts have some people regretting their choice to participate. “I was never told that every year that there was going to be some budget meeting, that your salary could be cut or not,” said Monique Duell, who cares for her son, Jeremiah, who has cerebral palsy and is nonverbal. “Had I known a lot of these things beforehand, I probably would not have run with this program, because now I’m left scrambling.” A caregiver’s pay depends on the type of care they are providing, such as nursing, personal care, community development. The proposed budget would reduce wages across the board. Shari Dexter, one of the co-founders of Concerned Citizens of Self-Direction Maryland, has heard from people who are facing a budget cut from roughly $47 per hour to $29.98. Duell’s pay would be cut from roughly $41 per hour in 2024 to $29.98 — a daunting prospect when living costs are skyrocketing in Prince George County where she lives. “How am I supposed to sign a full mortgage when I don’t know from one year to the next what my salary is going to be? We’re supposed to go all the way down to $29.98 an hour. What am I supposed to do with that if I can’t work outside the home?” said Duell, who receives pay for her son’s care and also hired two nonfamily-member providers.Advertisement Many caregivers echoed Duell’s inability to work outside the home due to the heavily-involved nature of her son’s care. Maryland state officials did not respond to questions about why the caregiver’s wages were dramatically lowered, nor if there were any plans to reverse the cuts after the pushback. Earlier this year, state lawmakers suggested that the budget for home and community-based services had to be lowered or the state would lose its ability to provide Medicaid waivers, but a Baltimore Sun investigation suggested otherwise. “MDH is committed to … supporting the health, safety, and independence of waiver participants,” said a spokesperson for the Maryland Department of Health. “Our implementation of FY 2027 budget requirements will continue to evolve in response to federal guidance and feedback from the stakeholder community and legislative and federal partners.” Disability advocates have been personally lobbying officials at the Centers for Medicare and Medicaid Services to hold off on the budget changes to the self-directed program, even taking out ads displayed on barges that travel along the shoreline in Ocean City, Md. The advocates are holding out hope that their messages will incite change. They’re already burned out. Duell says the constant stress of caring for her child has led to numerous health problems, including gut pain and heart palpitations. The treatments have placed her further in debt — nearly $40,000 — as she’s set to lose nearly a quarter of her wages. She says she’s at risk of becoming homeless and placing her son at risk of ending up in an institution. If the budget changes remain, many caregivers will face impossible choices. Fifer recalled how devastating it was to hear from a parent who contemplated buying a life insurance policy and committing suicide in the hope that the payout would take care of their loved ones. (Most life insurance policies have an exclusion clause that prevents payouts when suicidal deaths happen within a specified number of years after the policy begins.)Advertisement She has felt that darkness encroaching, too. “It’s like some people feel like they’re worth more dead than alive to be able to take care of their loved ones,” she said. If you or someone you know may be considering suicide, contact the 988 Suicide & Crisis Lifeline: Call or text 988 or chat 988lifeline.org. For TTY users: Use your preferred relay service or dial 711 then 988. STAT’s coverage of disability issues is supported by grants from Robert Wood Johnson Foundation and The Commonwealth Fund. Our financial supporters are not involved in any decisions about our journalism. disability, Policy Submit a correction requestReprints O. Rose Broderick Disability in Health Care Reporting Fellow Rose covers disability and mental health, and she helps write STAT’s daily Morning Rounds newsletter. Confidential tips can be sent to Rose on Signal at rosebroderick.11. 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