From Crisis to System Change — Federal Perspectives and State Levers in Direct Care Workforce Reform
Introduction: A National Workforce at a Crossroads
The U.S. long-term care system is facing what can only be described as a structural workforce crisis. With over 5 million direct care workers today and a projected 8.9 million job openings by 2032, the math simply doesn’t work unless new solutions are scaled. The Administration for Community Living (ACL) and organizations like PHI are sounding the alarm: without investment, coordination, and systemic change, states will struggle to ensure access to home- and community-based services (HCBS) at the scale aging and disability populations demand.
At the Caregiving and Workforce Intensive, federal leaders like Mary Lazare (ACL) and national workforce advocates emphasized that piecemeal fixes are no longer enough. What’s needed is bold, evidence-based reform that elevates direct care as a profession, aligns state and federal policies, and anchors innovation in both worker and consumer needs.
The Workforce Reality: Who Are Direct Care Workers?
Profile of the workforce (PHI, 2024 data):
5M+ workers across home care, residential care, and nursing facilities
85% women
64% people of color
28% immigrants
Median wage: $16.72/hour
37% living at or near poverty
49% relying on public assistance
This is the workforce that supports millions of older adults and people with disabilities to live with dignity. Yet the very structure of the system leaves these workers undervalued, underpaid, and at risk of leaving the field altogether.
The consequences are cascading:
Providers face chronic shortages and turnover costs.
Hospitals cannot discharge patients safely.
States absorb higher Medicaid expenditures.
Families shoulder unsustainable caregiving responsibilities.
Consumers experience disruptions, poor continuity, and worsening health outcomes.
Federal Signals: A Call for Urgency
Mary Lazare framed the issue in blunt terms: “The crisis is now.” With 53 million people already providing care and fewer younger Americans entering the workforce, the dependency ratio is shifting in ways that make caregiving one of the most pressing policy challenges of the next decade.
Key takeaways from ACL’s perspective:
Supply gap: The U.S. needs an additional 800,000 caregivers by 2030.
Demographic inevitability: Nearly 1 in 4 Americans will be over age 65 within ten years.
Financial stress: Medicaid and Medicare are not designed to absorb unchecked growth in LTSS demand.
Market failures: Workforce investments are diluted by low pay, poor job quality, and lack of professional recognition.
ACL is not only tracking the problem—it’s also experimenting with levers for reform. Lazare previewed a November 2025 “Meeting of the Minds” summit, which will bring together policymakers, advocates, and funders to surface recommendations, highlight successes, and consider national model frameworks. A prize competition is also being designed to incentivize innovative, scalable caregiver support programs.
PHI’s Framework: Universal Direct Care Workforce Development
PHI presented a structured roadmap for workforce transformation. Their model rests on four interconnected pillars:
Universal Core Competencies
Training built around shared competencies across occupations and care settings.
Reduces fragmentation and creates portable skills.
High-Quality Training and Credentials
Portable, stackable, and recognized across employers and states.
Supports mobility and professionalization.
Career Progression and Advanced Roles
Establishes career ladders (e.g., senior aides, peer mentors, coordinators).
Improves retention by offering pathways instead of dead-ends.
Wages and Job Quality Improvements
Anchors workforce stability in compensation and benefits.
Seeks to balance wage growth with policy solutions that mitigate the “benefits cliff.”
State Levers: What’s Working on the Ground
PHI’s cross-state analysis showed that while strategies vary, common themes are emerging:
Sustainable financing is essential—states are leveraging ARPA funds, HCBS grants, and blended federal-state models.
Workforce data collection is underdeveloped but improving; registries and job platforms are helping fill gaps.
Stakeholder engagement is critical; successful states involve workers, employers, training providers, and consumers in policy design.
Credentialing momentum: States like Michigan and Wisconsin are pioneering universal credentials that professionalize the field.
Language access and equity: Wisconsin’s multilingual rollout (Spanish, Hmong, soon Swahili) highlights how equity must be embedded.
The Federal-State Intersection: Where Policy Meets Practice
A recurring theme was the tension between national vision and state autonomy. While states want flexibility, fragmentation creates barriers to scaling solutions. Federal actors can lay the foundation by:
Providing funding incentives (e.g., enhanced FMAP for workforce initiatives).
Supporting universal competency frameworks that states can adapt.
Coordinating technical assistance across states to reduce duplication.
Ensuring grant stability so states aren’t derailed by short-term funding cycles.
Meanwhile, states can push innovation faster by:
Testing new career ladders and lattices.
Embedding data dashboards into workforce oversight.
Designing job platforms and registries that prioritize safety, accessibility, and consumer trust.
Looking Ahead: Crisis or Inflection Point?
The direct care workforce crisis can either spiral further—leaving millions without access to needed services—or it can become the inflection point for long-overdue systemic reform.
The ingredients are known: sustainable financing, job quality improvements, universal training, and portable credentials. The question is whether stakeholders—federal, state, provider, and consumer—can align around a shared agenda and move beyond fragmented pilots into a national caregiving workforce strategy.
As Lazare put it, “See the opportunity, feel the stress of the opportunity.” The next decade will determine whether America rises to the challenge of building a resilient caregiving infrastructure—or continues with business as usual until the system collapses under demographic pressure.
Closing Thought
The crisis is real, but so is the momentum. States are piloting, federal leaders are convening, and advocates are pressing for systemic change. If the pieces come together, the U.S. has a chance to not only close the workforce gap but to transform direct care into the respected, professional field it has always deserved to be.
