By skyforbes 
Minnesota’s homecare system is facing a dual crisis. Agencies already struggle with staffing shortages, driven by high turnover and low wages. Now, federal policy changes threaten to cut $1.4 billion in Medicaid funding over the next four years, potentially leaving 140,000 Minnesotans without health coverage. These combined pressures endanger vulnerable families, caregivers, and rural hospitals. To protect care access, policymakers must act to preserve Medicaid funding and support the homecare workforce.
Heres’s what we know
- Homecare relies on Medicaid: Nearly 70% of homecare services are funded by Medicaid, making the sector highly sensitive to reimbursement changes.
- Workforce shortages: High turnover, low pay, and burnout already strain Minnesota’s homecare agencies. Many report difficulty recruiting and retaining staff.
- Federal funding cuts: A recently signed federal law will cost Minnesota an estimated $1.4 billion in lost Medicaid funding over four years. New eligibility rules, including semi-annual checks, work reporting requirements, and added paperwork, could push as many as 140,000 residents (12% of enrollees) off coverage.
- Who’s most affected: Low-income adults without children, parents of teens, and rural communities are expected to be hit hardest. Rural hospitals, already under pressure, face additional risk as more people lose coverage.
Even though 91% of Medicaid expansion recipients already meet work requirements or qualify for exemptions, the increased paperwork is expected to cause coverage losses for up to 80,000 Minnesotans simply due to missed deadlines or administrative barriers (Minnesota Reformer, 2025)
To address the challenges of workforce shortages and Medicaid cuts, policymakers should gear their focus more on protecting funding, strengthening the workforce, supporting vulnerable communities, and reducing administrative burdens. Maintaining or increasing Medicaid reimbursement rates is important in ensuring sustainable wages and workforce stability, since low pay is one of the primary reasons for high turnover among home care staff. At the same time, additional investments in the workforce are needed, including ARPA-style grants to support wage increases, training opportunities, and clear career pathways such as advancing from personal care attendant to certified nursing assistant and beyond. These initiatives would make home care jobs more competitive in today’s labor market.
It is equally important to direct aid to the populations most vulnerable to funding cuts. Under the new federal law, low-income adults without children, parents of teenagers, and rural communities encounter the most significant obstacles to obtaining coverage. By focusing resources on these groups, the state can help protect those most vulnerable to service loss. Finally, simplifying administrative requirements such as streamlining eligibility checks, reducing paperwork, and minimizing unnecessary reporting would lower barriers to care for families while also easing the compliance burden on providers. Together, these steps would help stabilize the workforce, preserve access to essential services, and strengthen the long-term sustainability of Minnesota’s home care system.
Minnesota’s care infrastructure is at a breaking point. Without intervention, staffing shortages will intensify, families will lose access to essential services, and rural hospitals may face closure. Protecting Medicaid funding and strengthening the home care workforce are urgent steps to ensure that vulnerable Minnesotans continue to receive the care they deserve. This is not only a healthcare issue but also a matter of equity, stability, and long-term sustainability for Minnesota’s health system. State and federal leaders must act now to prevent devastating consequences for families, providers, and communities.