Medicaid Cuts Put Disability Services At Risk, Advocates Warn

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After years struggling to find staff to support people with developmental disabilities living in the community, an influx of federal dollars allowed service providers to make headway, but the gains could be short-lived.

A report out this month finds that the turnover rate for direct support professionals, or DSPs, across the nation dropped below 40% in 2023 for the first time since data collection began in 2014.

At the same time, wages for DSPs rose to a national average of $17.20 per hour and vacancies in the field declined, according to findings from the “Case for Inclusion” data snapshot report issued by United Cerebral Palsy and the American Network of Community Options and Resources, or ANCOR, which represents disability service providers across the country.

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The improvements are thanks to $26.3 billion in funding from the 2021 American Rescue Plan Act, a pandemic relief package, that was earmarked for DSP recruitment and retention, the report indicates.

DSPs help people with disabilities live in the community, assisting with tasks ranging from feeding and bathing to grocery shopping and social outings. But, with persistently low wages, the high-demand field has long had difficulty attracting and retaining workers. Surveys show that workforce challenges have led disability service providers to cut programs and turn away new referrals.

Now, however, the report warns that the progress achieved could soon be reversed. The extra funding approved during the pandemic had to be used by March 2025 and, more recently, Congress approved nearly $1 trillion in cuts to Medicaid, the program that supports home and community-based services for people with disabilities.

“People with IDD and their families will be profoundly impacted if we continue down the dangerous path of failing to sufficiently invest in home and community-based services and the workforce of direct support professionals who make their inclusion in the community possible,” said Barbara Merrill, chief executive officer at ANCOR. “We are finally seeing modest improvements in recruitment and retention of this critical workforce — gains that were only possible thanks to targeted but time-limited investments by federal and state governments.”

Even with that extra funding, advocates note that DSP pay has remained below living wage benchmarks nationwide and service providers have continued to face staffing hurdles. And, the report found that more than 550,000 people with intellectual and developmental disabilities were on state waiting or interest lists for home and community-based services last year, up 8% over the year prior.

In many states, individuals with disabilities who get access to Medicaid home and community-based services waivers have a limited time to secure services in order to retain their eligibility. If providers are not available, they can be sent back to the waiting list, the report notes.

“Without sustained funding, we risk reversing the fragile progress we’ve fought so hard for over the past several years,” said Diane Wilush, interim president and chief executive officer at United Cerebral Palsy. “With post-pandemic resources drying up and massive federal Medicaid funding cuts on the horizon, it’s hard to imagine how the trajectory we’re on doesn’t lead to a mass exodus of direct support professionals from the workforce — leaving hundreds of thousands more people with IDD without the vital supports needed to stay connected to and included within their communities.”

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