Several states propose wage cuts for family caregivers under Medicaid self-direction programs

Several states have proposed lowering hourly wages for family caregivers who provide Medicaid-funded services to people with intellectual and developmental disabilities. Maryland’s Developmental Disabilities Administration released new wage tables earlier this summer that would cut some caregivers’ pay by as much as $20 per hour.

The tables were originally set to take effect July 1 but were delayed until October after objections from disability advocates.

Background on self-direction programs Under the self-direction option, participants manage their own care and can receive payment for providing that care. The number of people using the program has grown from roughly 750,000 to more than 1.5 million over the past decade, according to a 2024 AARP report.

In Maryland, about 3,900 individuals currently self-direct their services. Caregivers interviewed said their pay would drop from rates near $41–$47 per hour to a uniform $29.98 per hour under the new schedule.

State actions and federal funding pressure Idaho, Indiana, Missouri, and Colorado have also advanced 2026 proposals to cut family caregiver compensation. Ohio legislators considered but later withdrew a measure that would have barred family members from serving as certified caregivers.

These state-level changes coincide with the scheduled January 1, 2027 implementation of a $1 trillion reduction in federal Medicaid funding enacted in the 2025 tax bill. Kim Musheno, senior director of Medicaid policy at The Arc, said states have historically reduced optional home- and community-based services when federal Medicaid dollars decline.