Caregiving Is Work. Public Policy Still Treats It Like an Exception.

Medicaid has begun to acknowledge a basic truth that most American families have understood for generations: helping another person bathe, dress, eat, take medication, move safely through the home, and remain connected to the community is work.

In a growing number of Medicaid programs, certain family members can be paid to provide that care. Some become W-2 employees through self-directed personal-care arrangements. Others participate in structured family caregiving programs, where a Medicaid provider agency receives a daily payment and compensates a relative who lives with and supports the person receiving services.

That is meaningful progress. It turns at least some invisible caregiving into recognized, documented, compensated labor.

But it is also a narrow exception inside a much larger system that continues to assume families will provide care for free. Most caregivers receive no wages. Many reduce their paid working hours, leave jobs, spend down savings, or delay retirement to meet a relative’s needs. Their labor sustains the long-term care system, but it usually produces no paycheck, no retirement contribution, and no Social Security earnings record.

The contradiction is no longer defensible. Caregiving is already work. Public policy simply recognizes it inconsistently.

What Medicaid has begun to recognize

Medicaid’s home and community-based programs allow states to pay for services that help older adults and people with disabilities remain in their homes rather than move into institutions. The federal government gives states several authorities for offering these services, including state-plan options and Home and Community-Based Services waivers.¹

One approach is self-direction. Under self-directed care, the person receiving Medicaid services, or an authorized representative, has greater control over who provides the care and how it is delivered. Depending on the program, the participant may recruit, hire, train, and supervise the worker. The Centers for Medicare & Medicaid Services calls this “employer authority.” States may also permit participants to hire relatives, including, in some programs, relatives who would ordinarily be considered legally responsible for providing care.²

Some of these arrangements create a recognizable payroll relationship. In Massachusetts’s Personal Care Attendant program, for example, the Medicaid participant is the consumer-employer, while the statewide fiscal intermediary, Tempus Unlimited, handles payroll functions and issues W-2 forms to attendants. Many relatives may work as personal care attendants, but the program excludes a participant’s legal spouse, the parent or foster parent of a participant who is a minor, and people serving in certain representative roles.³

Structured Family Caregiving, or SFC, operates differently. In Indiana, for example, the Medicaid participant lives with a principal caregiver who provides daily, non-skilled support. The caregiver may be a relative. An approved SFC provider agency trains and oversees the caregiver, bills Medicaid at a daily rate based on the participant’s assessed needs, and compensates the caregiver from that payment.⁴

These models should not be collapsed into one category. A self-directed attendant may be an hourly W-2 worker. A structured family caregiver may receive wages, benefits, or a daily stipend through an agency. Tax and employment treatment can vary.

But the underlying recognition is the same: care that would otherwise be performed without compensation can qualify as a publicly funded service when it is authorized in a Medicaid care plan.

Why states are turning to family caregivers

States did not adopt these programs merely to make a symbolic statement about the value of family care. They adopted them because the existing care system cannot consistently meet demand.

The Administration for Community Living, or ACL, describes a long-standing shortage of direct care workers driven by low wages, limited benefits, and weak opportunities for advancement. The shortage can leave people unable to obtain services in the community, force providers to turn away participants, and increase the risk that someone will enter an institution because adequate help is not available at home.⁵

Family-caregiver programs can expand the available workforce. They can also address problems that a traditional agency model does not always solve: reaching rural areas, finding workers who speak the participant’s language, respecting cultural and household preferences, and providing care on schedules that reflect the person’s actual life.

This does not mean every relative should automatically become a Medicaid worker. Medicaid services must be based on an assessment of the participant’s needs, included in a person-centered service plan, and delivered under state qualifications and safeguards.

It does mean that states are acknowledging reality. When an agency cannot find an outside worker, a family member often performs the work anyway. Paying and training that caregiver can be more honest, stable, and accountable than pretending the labor is not occurring.

The federal government now recognizes the problem

On June 24, 2026, Senator Tim Kaine of Virginia introduced the Supporting Our Direct Care Workforce and Family Caregivers Act. Kaine first introduced the proposal in 2021, reintroduced it in 2023, and introduced the current version in 2026.

The bill would direct the Department of Health and Human Services, through the Administration for Community Living, to award grants to states and other eligible entities. The grants could support the recruitment, training, retention, and advancement of direct care workers, as well as education and training for paid and unpaid family caregivers.

The bill would also require the Department of Health and Human Services, acting through the Administrator for Community Living, to establish a national technical-assistance center. Kaine’s office describes this provision as codifying ACL’s existing Direct Care Workforce Strategies Center and expanding its work to include family caregivers. ACL created the existing center through agency authority in 2022 to provide states and service providers with technical assistance on workforce recruitment, retention, training, and professional development.⁶

Kaine said that “direct care workforce shortages have only gotten more severe.”

The scale explains the urgency. In 2025, AARP and the National Alliance for Caregiving estimated that 59 million adults had provided care to another adult during the preceding year. That estimate included 11.2 million people who received at least some compensation through Medicaid, veterans’ programs, or other public programs—a population the 2020 survey did not include or measure. The 2025 and 2020 headline estimates therefore are not directly comparable. Within the 2025 estimate, 47.8 million people provided only unpaid care, 9.3 million provided both paid and unpaid care, and 1.9 million provided solely paid care.⁷

As of July 31, 2026, the bill, S. 4889, had been introduced with seven original cosponsors and referred to the Senate Committee on Health, Education, Labor, and Pensions. The official congressional sources reviewed for this article did not list further action. Its eventual fate is uncertain.⁸

Still, the legislation matters as a policy signal. Direct care shortages and the burden placed on unpaid caregivers are no longer fringe concerns. They are recognized federal workforce, aging, disability, and economic-policy problems.

Medicaid recognition is real, but conditional

The limitation is that Medicaid does not recognize caregiving as work in any general sense.

It recognizes specific services provided to a specific person who meets Medicaid’s financial and functional eligibility requirements. The service must be authorized under a state plan or waiver. The state must permit the relevant family relationship. The caregiver must meet program qualifications. The payment must fit within the participant’s approved care plan.

Move across a state line, change Medicaid eligibility categories, or fail to meet the functional-eligibility standard applicable to a particular program—including an institutional level-of-care standard where one is required—and the same labor may no longer qualify for compensation.

That is not a general labor framework. It is a reimbursement mechanism inside a means-tested health and long-term care program.

The difference matters. Work ordinarily creates an economic record. Employers report wages. Employees and employers contribute to Social Security. Covered earnings help workers accumulate credits toward retirement, disability, and survivor benefits. In 2026, Social Security credits are based on covered wages and covered self-employment income.⁹

Unpaid caregiving produces no equivalent credit, regardless of how many hours the caregiver works or how essential the care is.

Employment policy offers only partial protection. The federal Family and Medical Leave Act allows some eligible employees to take job-protected leave to care for certain relatives, but that leave is generally unpaid. It protects a qualifying worker’s job temporarily. It does not compensate the caregiving labor or replace the earnings lost while providing it.¹⁰

The tax code also offers limited relief in certain circumstances, such as when a taxpayer pays for dependent care in order to work. But it does not generally treat the unpaid hours a person spends caring for a parent, spouse, adult child, or other relative as earned income.¹¹

The result is a striking inconsistency. The same assistance with bathing, dressing, meals, supervision, and mobility may be treated as paid labor when it appears in an approved Medicaid service plan, but as a private family obligation when it does not.

The work has not changed. Only the administrative category has.

What treating caregiving like work would mean

Treating caregiving like work would not require turning every family relationship into a commercial transaction. Care is personal. It is often motivated by love, duty, culture, and the desire to protect someone who matters.

But work and love are not opposites. A person can care deeply for a relative and still perform difficult, skilled, time-consuming labor that carries economic consequences.

A system that genuinely recognized caregiving would have to account for those consequences across programs, not only within selected Medicaid waivers. It would need a more consistent understanding of who caregivers are, what services they provide, and how caregiving affects wages, employment, taxes, Social Security, and retirement security.

Paid family caregivers would need clear employment classifications, reliable compensation, training, oversight, and access to the protections associated with other direct care work. Unpaid caregivers would need recognition that time spent outside the formal labor market can still produce lasting economic losses.

Most importantly, public policy would have to stop treating family availability as an unlimited, cost-free resource.

Structured Family Caregiving and self-directed Medicaid programs offer a glimpse of a more honest system. They acknowledge that family members are not merely standing nearby while care occurs. They are often the people doing the work.

The next step is not necessarily to make every caregiver a Medicaid employee. It is to build labor, tax, retirement, and long-term care policies around the reality that caregiving has economic value, regardless of whether the government currently issues a payment for it.

Caregiving is already work. The question is whether our public institutions will continue treating that work as an exception.