Home and Community-Based Services

Home and community-based services are Medicaid-funded supports that help older adults and people with disabilities get the care they need at home or in a community setting instead of a nursing home. Home and community-based services, usually shortened to HCBS, cover help with daily activities, adult day programs, and in many states the care services delivered inside assisted living, while Medicaid does not pay for housing or meals. This guide explains how HCBS programs and HCBS waivers work, what they cover, who qualifies, why waiting lists form, how self-direction works, and how families usually apply.

HCBS matters because it is the main way Medicaid supports long-term care outside an institution. KFF's 2025 survey of state Medicaid programs, published in January 2026, estimates that 5.1 million people used Medicaid-covered home care in 2023, compared with 1.4 million who used institutional long-term care.

What Home and Community-Based Services Are

Medicaid has always paid for nursing home care, and over time Congress gave states ways to pay for care at home as well. Most home care under Medicaid is optional, so each state decides which services it offers, who can receive them, and how many people it will serve. Only home health, which includes part-time nursing, home health aide services, and medical supplies, is a required Medicaid benefit.

Because of that flexibility, no two states run HCBS exactly alike, and a single state often runs several programs aimed at different groups. KFF counted more than 300 such programs in 2025, and the most established route for older adults is the Section 1915(c) waiver, which is the focus of the next section.

How Section 1915(c) Waivers Work

A Section 1915(c) waiver is an agreement in which the federal government lets a state offer home and community-based services to people who would otherwise need the level of care provided in a hospital, nursing home, or intermediate care facility. The name comes from the section of the Social Security Act that created it, and 47 states offered at least one 1915(c) waiver in KFF's 2025 survey. Federal rules at 42 CFR 441.301 limit waiver services to people who, without those services, would require that institutional level of care.

States may target a waiver to a specific group, such as adults age 65 and older or adults with physical disabilities, and they may cap how many people enroll. Waivers can also be approved for a limited area of a state. The state must run a written, person-centered service plan, reviewed at least every 12 months, and must offer each eligible person a choice between institutional care and home and community-based services.

What HCBS Can Cover

Federal rules list the kinds of services a 1915(c) waiver may include, and states can add others that CMS approves as necessary to avoid institutional care. The list in 42 CFR 440.180 includes case management, homemaker services, home health aide services, personal care, adult day health services, habilitation, and respite care. KFF's survey adds that states also cover home-delivered meals, non-medical transportation, caregiver support, and equipment, technology, and home modifications.

For older adults, the most common supports fall into a few groups:

Families who want to understand the home-based side in more detail can read the guides to home care and adult day care. Programs such as PACE combine many of these services under one team.

HCBS and Assisted Living

Many families assume Medicaid pays for assisted living outright, but federal law draws a firm line between care and housing. Under 42 CFR 441.310, federal Medicaid funds cannot pay for room and board in a home and community-based waiver, with narrow exceptions for room and board during respite care in an approved setting and for the share of rent and food attributable to an unrelated live-in caregiver. In practice, Medicaid can pay for the care services a resident receives, while the resident pays for the apartment and meals from personal income.

According to KFF's analysis of state Medicaid coverage, 41 of the 47 states it studied cover services in assisted living through at least one Medicaid program, and 32 of them do so through 1915(c) waivers. Coverage is far from universal inside each state, because a waiver may serve only certain communities and may limit how many people it enrolls. KFF also found that 10 states require assisted living communities to accept new Medicaid residents, so a community that takes Medicaid is not guaranteed to have an open spot.

Federal settings rules also shape which communities can participate. A residential setting owned or controlled by the provider must give residents a lockable entrance door, control over their schedules, and access to food, and any limit on those rights has to be justified in the person's service plan. These rules are one reason a family should ask each community directly whether it accepts a particular state's waiver, and whether it has a slot open.

Who Qualifies

Eligibility for HCBS has two parts, a functional test and a financial test, and a person generally has to pass both. The functional test asks whether the person needs the level of care a nursing home provides, which a state assessor decides after reviewing help needed with daily activities such as bathing, dressing, eating, and moving around, and sometimes memory and safety. Federal rules require the state to evaluate that need before enrollment and again at least once a year.

The financial test is based on the Medicaid group for people who would qualify for Medicaid if they lived in an institution, described in 42 CFR 435.217. A KFF review of waiver data from fiscal year 2018 found that more than three-quarters used the federal maximum income limit of 300 percent of the Supplemental Security Income benefit rate, and that most states also applied the SSI resource limit of $2,000 for an individual (data as of 2019). Because those thresholds change and differ by program, families should confirm the current figures with their state Medicaid agency rather than rely on a national number.

Income above a program's limit does not always end the search. Some states allow a special trust, often called a Miller trust or qualified income trust, to hold extra income, and Medicaid also looks at transfers of assets in the five years before an application. The guides on Medicaid and senior care and Medicaid planning and asset protection explain those rules, and the post on Medicaid look-back rules covers property transfers.

Waiting Lists and Enrollment Caps

A waiver can limit enrollment, so when more people qualify than the program has funded slots, a waiting list forms. KFF's November 2025 report found about 607,000 people on waiting or interest lists for Medicaid home care waivers across 41 states, with an average wait of 32 months in the 33 states that reported one. Older adults and adults with physical disabilities made up 23 percent of that total, while people with intellectual or developmental disabilities made up 74 percent.

A waiting list is not the same as having no care. KFF reports that more than 80 percent of the people on waiting lists are eligible for personal care or other services through their state's regular Medicaid plan, so families should ask about those options while they wait. Waitlist numbers also overstate unmet need in some states, because a few states place people on the list without checking whether they are eligible.

Self-Direction

Self-direction lets the person receiving care, or a representative, run part of the program instead of relying only on an agency. Federal rules for self-directed personal assistance describe two kinds of control. Employer authority covers recruiting, hiring, training, scheduling, supervising, and dismissing workers, while budget authority lets the participant manage a service budget and decide how it is spent within the approved plan.

KFF's 2025 survey found that every responding state but one lets Medicaid enrollees self-direct home care in at least some circumstances, and 41 states let enrollees set caregiver pay rates. Many states also allow family members or friends to be paid caregivers through a waiver, although rules for spouses and parents of minor children are stricter. The guide to paid family caregiving covers that topic in depth.

How to Apply

The process differs by state, but most families follow the same general path. A state Medicaid agency, or the agency it designates for aging services, decides eligibility and runs the assessment, so the starting point is finding the right local contact.

A denial or a wait does not have to be the end of the road, since Medicaid applicants can appeal an eligibility decision and ask about another program. Families comparing options can start with the care assessment tool and the cost comparison tool, and the guide on financial assistance for seniors lists other ways to help pay.

Common Misunderstandings

Families often assume that having a loved one on a waiver means Medicaid pays every bill. Waivers cover approved care services, not rent and meals, and a person receiving them may still be required to put part of their monthly income toward the cost of care, depending on the state's rules.

Another common mistake is waiting until savings run out before asking about Medicaid, because by then the wait for a slot can be long. It also helps to know that Medicare does not cover long-term custodial care, so Medicare and Medicaid work very differently and are not interchangeable.

Getting Help Finding the Right Care

Sorting through waivers, waiting lists, and communities that accept Medicaid can feel overwhelming, especially during a health crisis. A local advisor at Local Senior Advisor can help you understand your care options, explain which types of communities fit your budget, and point you to the right agency to ask about benefits. Call us or start with our care assessment to take the first step.

This guide is informational only and is not medical, legal, or financial advice. Programs, costs, and eligibility rules change and vary by state. Confirm details with the relevant agency before making decisions.