THE ARISING · Markets & Strategy
Most Medicaid Home Care Waiver Policies Did Not Move Aide or Nurse Jobs
Medicaid spending on home health and personal care more than tripled between 2006 and 2024, yet aides and nurses grew only from about 4% to 5% of the U.S. labor force. A new study asks whether state waiver rules explain part of that gap. The answer, for most policies, is no: only a small fraction showed any effect. Most of the few effects that did appear were negative for workers.
The research comes from the Center for Retirement Research at Boston College. Jean-Pierre Aubry, Gal Wettstein and Nilufer Gok published it on Oct. 20, 2026, as an issue brief based on a new study. According to the authors, states have increasingly used Medicaid 1915(c) waivers to pay for more homeand community-based services for older adults.
The team collected new data on the services covered in 1915(c) waiver applications. They linked those records to American Community Survey data on wages, unemployment and hours. The design relies on the fact that states expanded or narrowed coverage at different times.
Most policies showed no measurable effect. The authors report that only a small fraction of the possible causal effects they examined revealed a significant relationship.
The authors say this is not surprising. Waivers were never designed to change caregiver pay or jobs. They also note that Medicaid generally reimburses below market prices, which leaves less room for wages or employment to move.
The effects that did appear leaned negative. According to the study, the main drivers were self-direction, which lets care recipients choose their own providers, and policies that let family members be paid to deliver care. These tended to lower aide earnings or raise nurse unemployment.
The page does not give us a reliable breakdown of the size of each effect, so we do not quote one here. The direction is clear in the authors' summary: lower earnings for aides and higher unemployment for nurses where self-direction and paid family care were allowed.
Only a few effects were positive. They were relatively small increases in nurses' wages and hours.
For providers and operators that depend on Medicaid, the findings bear on competitive positioning. The study does not measure provider revenue or margins, so any business reading is interpretation. One reasonable inference is that policies expanding demand for care do not automatically translate into stronger labor markets for agency-employed workers. Another is that rules allowing paid family caregivers and consumer choice of provider may shift some demand away from formal workers. The authors themselves stop short of firm conclusions on this and call for more research on how these policies affect labor outcomes. The weakest part of any such reading is that the study tests labor outcomes, not business results.
The wider pay picture also frames the risk. Real earnings for aides have grown roughly in line with the national average, leaving their pay at just under half the average for all workers. The unemployment rate of aides has stayed close to the national average despite rising demand. Nurses earn well above average and have consistently experienced near full employment.
Waivers are temporary. They generally last three to five years and must be renewed, and states usually pair expansions with restrictions because each request should add no cost to Medicaid. That means the rules operators face can change at each renewal. Upcoming briefs from the same team will cover the effects of waivers on informal caregivers and on care recipients, and those results will show whether the trade-offs seen for formal workers come with gains elsewhere.
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