Indiana’s paid caregivers are facing major budget cuts
Kacey Poynter doesn’t have to travel far to check in for work. She is a paid caregiver and simply rolls out of bed to tend to her care: her 2-year-old son, who sleeps next to her in a portable playpen.
Sonny was born with a birth defect that hindered the development of his brain and requires near-constant care just to breathe and eat. Mrs Poynter left her job at a call center when she brought him home from hospital and has nursed him since then rather than relying on assistants or institutions. Indiana’s Medicaid program paid her for this labor of love.
“It’s really been life-changing, being able to be here with him and not have to worry about someone else trying to take care of him,” she said.
But her ability to continue caring for him is now in doubt. Indiana’s social services agency has announced plans to end the health care program, citing a nearly $1 billion shortfall in the state’s Medicaid budget. Starting July 1, parents and guardians who care for children, and spouses who care for their partners, would have to enroll in a different program for a much lower wage.
The fear for people like Ms. Poynter is that they will have no choice but to return to work and seek home care help amid a widening national labor shortage of aides and nurses.
During the coronavirus pandemic, states received a huge influx of federal money — money that is now drying up, leaving Indiana and many other states facing difficult choices about how to close the gaping holes in their budgets.
Panicked Indiana parents who rely on the payments have held weekly meetings at the Statehouse, some bringing their children. With the state’s legislative session ending Friday, it is unclear how the proposed cuts will work out.
Lawmakers point to hard budget calculations and the blurred line between out-of-pocket care that must be paid for and the duties all parents owe to their children.
“We have a lot of legislators saying, ‘No one should have to rely on Medicaid to make a living,’” said Kim Dodson, CEO of The Arc of Indiana, a nonprofit organization. “But you have families who have made the choice not to work outside the home, to care for their loved one, because there is no one else who can do it and certainly not as well as they can.”
Indiana Lieutenant Governor Suzanne Crouch, a Republican running for governor, has called up the social services agency to delay the cuts and demanded an external audit of the agency’s finances. “We will be judged on how we care for the most vulnerable among us,” she said in a statement.
About four million Americans with chronic illnesses or disabilities get home and community-based services paid for by Medicaid, the government health insurance program for people with lower incomes. Most are adults, but an increasing proportion are children with serious medical conditions who may need both skilled services and assistance with daily tasks such as washing and dressing.
These services, which keep many people out of nursing homes or other institutions, can be provided by nurses or home health aides, but families have always been the backstop. In many states, family members can be paid for providing some of that care, but Medicaid programs have generally been more restrictive when it comes to paying parents who, the thinking goes, are obligated to care for their children out of a sense of duty instead of money.
During the pandemic, the Biden administration eased barriers for parents and guardians to become paid caregivers. Congress increased federal support for Medicaid, in part so states could expand health care programs. According to a study last summer Through KFF, formerly known as the Kaiser Family Foundation, 37 states took advantage of the expansion to pay parents and guardians.
Kate McEvoy, executive director of the National Association of Medicaid Directors, said the paid programs offered a way to meet the needs of families and save states money that would otherwise be spent on expensive institutional care. “They want to be helped in a home setting or in the community, and generally it’s less expensive for the Medicaid program,” she said.
With federal funding declining, some states are downsizing programs and tightening eligibility, while other states are making paid care permanent.
Virginia initially imposed stricter rules for parents to become paid caregivers, but lawmakers are now considering it an invoice to lift some requirements. Ohio has made its care program permanent, but eligible parents or spouses must prove they cannot hire an aide, and paid hours are limited to 40 per week. Iowa And Oregon are asking the Centers for Medicare & Medicaid Services to create new paid programs.
Ms. Poynter has been paid $15 an hour for eight hours of daily personal care, plus health insurance and retirement benefits through a nurse, Healing Hands, who contracts with the state and oversees her work.
Sonny is a happy child who is just starting to roll and talk, but he is completely dependent on his parents. Every day, Ms. Poynter slowly feeds him liquid meals through a tube in his stomach, aspirates sputum from the breathing hole in his windpipe and cleans and bandages the openings to his airways and abdomen, in addition to diaper changes and other baby routines.
On her phone, she clocks in and out for the hours she gets paid, but the distinction feels arbitrary to her because Sonny is no less dependent on her when she’s free. Paradoxically, she must clock out before administering medications because Medicaid considers this to be skilled care and she is only contracted for personal services. “My brain is in work mode pretty much 24/7,” she said.
Statewide, enrollment in the program and its costs have skyrocketed. According to Indiana Social Services, between March 2022 and February 2024, the number of children with disabilities or traumatic brain injuries who had paid caregivers increased sixfold, from 262 to 1,629. That growth was fueled by the costs associated with the nurses contracted to oversee the program. Some providers competed to recruit health care providers, advertising online and offering $1,500 or more in signing bonuses, and hundreds of dollars for referrals.
That has contributed to rising spending on care for the pediatric population, expected to reach $173 million this year, up from $2.5 million in 2021.
Melissa Keyes, executive director of Indiana Disability Rights, an independent agency, said the state had drastically underestimated demand and had not taken steps such as limiting hours that some other states had imposed. “They didn’t necessarily have good guardrails for how that program should be managed,” she said.
The state approved nearly half of child care workers for more than 60 hours a week, and a small portion were allowed to work around the clock.
Indiana didn’t identify the growing spending until late last year, when an updated Medicaid forecast showed there was $984 million in the gap. Michele Holtkamp, a spokeswoman for the agency, said the health care program was just one of several factors in the shortage, “but it was the most acute.”
Sen. Ryan Mishler, a Republican who chairs the Senate Appropriations Committee, said that in some cases providers had billed the state more than $200,000 for care for one person. ‘The whole point of home care is that they say it’s cheaper. But when you achieve so much, that’s actually not the case.”
The state’s social services agency claims that health care providers can enroll in a replacement Medicaid program that it says is just as good. But it pays less, capping at about $34,000 per year. Under the existing program, Ms. Poynter can earn about $50,000 a year, and other caregivers who are allowed to work more than eight hours a day are paid significantly more.
State Rep. Edward Clere, a Republican, blamed the agency’s limited release of details for the outrage. “It’s scary for families to hear that big changes are coming, but not have enough information to understand what those changes will mean for them,” he said.
Families in rural areas in particular may have difficulty finding help caring for their children. Indiana has 26 percent fewer home care workers than the national average, according to AARP.
Lydia Townsend, a service coordinator for Healing Hands who oversees more than 200 caregivers including Ms Poynter, said boundaries need to be set to prevent abuse of the system. But she worried the proposed cuts would put families at risk. “They won’t get the shelter and food they can get now,” she said.
The impact of reduced Medicaid funding from the federal government this year is being felt in many states at a time when their tax revenues are also falling. KFF expects states’ spending on Medicaid to rise a surprising 17 percent this year.
Alice Burns, deputy director of the KFF Program on Medicaid and the Uninsured, asked what would be sacrificed if Indiana continued to spend so much on the health care program: “Wraparound services for pregnant women? Dental care for children? What are the services that people will have to do without?”
Ms Poynter is unsure what she will do if the cuts are approved, but has ruled out turning to a stranger for help. She will likely care for Sonny until her husband finishes work and then take on evening shifts as a waitress or barista. Compared to friends who are the sole caregivers, she said she felt happy.
But nothing can compensate for the time parents would have to spend without their children, whose lives are precarious and often short.
“Tomorrow is not promised for them,” she said.