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2025: A Year of Uncertainty and Change in Home-Based Care
The year 2025 was defined by notable upheaval in the home-based care landscape, as providers navigated a complex interplay of political uncertainty, shifting reimbursement models, and major industry consolidation. From the transition to a new presidential administration and potential changes to Medicare and Medicaid, to high-profile mergers and workforce challenges, the industry faced a period of intense volatility.Here’s a look back at the stories that dominated the conversation, reflecting a year of both challenges and adaptation.
Navigating a Shifting Political Landscape
The inauguration of President Donald Trump in January 2025 injected a new layer of uncertainty into the home-based care sector. Providers closely monitored potential impacts to Medicare, Medicaid, and Medicare Advantage, alongside the administration’s broader pro-business and anti-regulatory stance. A key concern was the potential repeal of the 80/20 rule,which mandates that 80% of Medicaid dollars for certain home-based care services be allocated to worker compensation.
However, the impact extended beyond policy debates. Stringent immigration policies enacted by the administration exacerbated an already critical staffing shortage,leading to losses of front-line workers and anxieties among legal resident caregivers.
Reimbursement Pressures Mount
Financial pressures were a recurring theme throughout 2025. Looming Medicaid cuts proposed in the One Big Beautiful Bill Act (OBBA) sparked widespread concern among providers, who feared states would be forced to reduce funding for home-based services. While the cuts didn’t directly target home- and community-based services, the industry braced for potential trickle-down effects.
“We know when states get this type of pressure, they will be in a position of having to either cut back on rates, cut back on benefits, cut back on innovation, or waiver programming across the board,” a senior official at The National Alliance for care at Home (the Alliance) stated in June.
these concerns were realized in some cases, with Providence St. Joseph Health closing its non-medical home companionship program due to an anticipated $500 million annual loss in Medicaid funding attributed to the OBBA.
Adding to the financial strain, the Centers for medicare & Medicaid services (CMS) proposed a ample 6.4% aggregate reduction in Medicare payments to home health agencies for 2026. This proposal triggered an outpouring of public comments urging CMS to reconsider, given the already thin margins faced by many providers. A 43-day government shutdown further delayed the final rule’s announcement, prolonging the industry’s anxiety. Ultimately, the final rule offered some relief, with a 1.3% aggregate cut amounting to $220 million,but concerns remained.
“Without Congressional intervention, these ongoing clawbacks will hang over the industry for years, limiting agencies’ ability to expand, invest in technology, and serve those who need care,” Mollie Gurian, vice president of public policy at The Alliance, warned in December.
Consolidation Continues
Despite the headwinds, 2025 witnessed continued consolidation in the home-based care sector. BrightStar Care, a leading franchisor of home health and personal care services, was acquired by an affiliate of Peak Rock Capital in March, signaling a commitment to growth and investment in technology and re-franchising. CEO Andrew Ray expressed a goal to double the company’s size within five years and establish a presence in every state.
Meanwhile, Cantata Health Solutions, a provider of home health, hospice, and palliative care, unveiled a new care model focused on deploying involved caregivers focusing on specific geographic areas to serve a higher volume of clients for shorter periods.
“We don’t need to hire as many employees for this model, unlike the conventional care side, where we are hiring every week,” Cantata CEO John Larson explained. “It’s a win-win situation. As a provider, we typically achieve better margins with fewer staffing requirements. For clients, it is less intrusive and more affordable. For employees, it offers more stability, predictability and variety.”
BrightStar Care’s acquisition by an affiliate of Peak Rock Capital in March signaled a commitment to growth and investment in technology and re-franchising. CEO andrew Ray expressed a goal to double the company’s size within five years and establish a presence in every state.
looking Ahead
The top stories of 2025 paint a picture of an industry grappling with unprecedented challenges.While the year brought uncertainty and disruption, it also highlighted the resilience and adaptability of home-based care providers. As the industry
