HR4029-119

What This Bill Does

This bill provides emergency federal funding to help states expand and improve Medicaid home and community-based services (HCBS) for elderly and disabled individuals. It temporarily increases the federal government's share of Medicaid HCBS costs by 10 percentage points during fiscal years 2026 and 2027, allowing states to draw down more federal dollars for these services. The bill requires states to use this increased funding to raise payment rates for home care agencies and to improve wages and working conditions for home health workers and direct support professionals.

Who Benefits and How

Home health workers and direct support professionals benefit through higher wages, paid sick leave, paid family leave, hazard pay, overtime pay, and more stable job conditions. Home health agencies and HCBS providers benefit from increased Medicaid reimbursement rates, though they must pass these increases on to their workers. Elderly and disabled Medicaid beneficiaries benefit through improved access to services—particularly those currently on waiting lists—and better quality care as workforce conditions improve. Family caregivers benefit through potential payments, respite services, and assistance with supplies and equipment. State Medicaid programs benefit from reduced state costs as the federal government picks up a larger share of HCBS expenses.

Who Bears the Burden and How

Federal taxpayers bear the cost of the 10 percentage point increase in the federal matching rate for HCBS expenditures, representing a significant but temporary increase in federal Medicaid spending during 2026-2027. State Medicaid administrators face new administrative burdens including preparing detailed applications describing their planned activities, ensuring that federal funds supplement rather than replace state funding, verifying that agencies pass rate increases to workers, conducting oversight, and submitting comprehensive reports by December 31, 2029. Nursing facilities and institutional care providers may face reduced revenues as the bill incentivizes community-based care over institutional settings and specifically funds transitions from nursing facilities back to home settings.

Key Provisions

• Increases the Federal Medical Assistance Percentage (FMAP) by 10 percentage points for state Medicaid HCBS expenditures during fiscal years 2026 and 2027, capped at 95% federal matching
• Requires states to submit applications describing how they will use funds, with applications automatically approved within 90 days if complete
• Mandates that states use increased funding to raise provider reimbursement rates to levels that support workforce recruitment and retention, and requires providers to pass increases to workers
• Authorizes 17 specific uses of funds including: providing paid leave and hazard pay for workers, serving individuals on HCBS waiting lists, purchasing emergency supplies and PPE, recruiting new workers, supporting family caregivers, paying for assistive technologies, and helping individuals transition from nursing facilities back to community settings
• Requires states to supplement, not supplant, existing state HCBS funding and to expend all federal funds by September 30, 2029
• Mandates external evaluation by experts in HCBS, disability programs, and older adult programs, with findings reported to Congress and made publicly available