If you're the primary caregiver for a child or adult with a disability, you already know what $1 trillion in unpaid care looks like: the hours you log every week that don't show up on a paycheck. The new AARP report puts a number to it: 59 million family caregivers provide 49.5 billion hours of care each year, valued at $1.01 trillion. That's more than all federal, state, and local Medicaid spending combined.

Here's the immediate problem. Home care costs have surged nearly 50% since 2019. HCBS cuts are shifting even more unpaid burden to families. And 7.3 million family caregivers ages 18-64 rely on Medicaid for their own health insurance, coverage now threatened by OBBBA work requirements rolling out across states starting January 2027, with Nebraska enforcing May 1 as the first.

You're not just losing paid home care. You're at risk of losing your own coverage at the exact moment you're taking on more unpaid caregiving.

What the Numbers Mean for Disability Families

AARP's "Valuing the Invaluable 2026" report, released March 26, quantifies what most caregiving families already live. 49.5 billion hours of care per year is the equivalent of 24 million full-time workers, 17% of the entire U.S. full-time workforce. At the replacement value of $20.41 per hour, that's $1.01 trillion annually.

That figure nearly doubles all out-of-pocket health care spending nationwide and exceeds total Medicaid spending. For disability families, this isn't an abstract policy data point but the cost of care you're absorbing because paid support isn't available, isn't covered, or has been cut.

Home-based care costs have surged nearly 50% since 2019, according to a separate AARP study. State-level hourly rates for direct care workers now range from $14.12 in Louisiana to $27.05 in Washington. When those paid hours are cut, the unpaid family member absorbs them. The $1 trillion figure reflects what families are already covering. The cuts increase that exposure.

HCBS Cuts Shift More Care to Unpaid Family Members

Medicaid home and community-based services (HCBS) cuts reduce the paid care hours families rely on. Across 32 states, under 25% of family caregivers receive any payment, mostly through state Medicaid waiver self-directed programs. Those programs allow families to hire and pay caregivers, often a family member, using Medicaid funds. HCBS cuts reduce those paid hours directly, which means the family caregiver loses income and takes on more unpaid hours.

If you're in a self-directed program and your Medicaid waiver hours are cut, you don't stop providing care. You provide it unpaid. The AARP data shows what that unpaid care is worth at replacement value, but replacement value doesn't pay your rent or cover your own health insurance premium.

Work Requirements Threaten Caregivers' Own Medicaid Coverage

7.3 million family caregivers ages 18-64 rely on Medicaid for their own health coverage. OBBBA work requirements, which take effect January 2027 at the federal level, put that coverage at risk. Nebraska is enforcing work requirements starting May 1, 2026, as the first state to go live.

The requirement is this: adults ages 18-64 must work, volunteer, or participate in approved activities for a set number of hours per month to maintain Medicaid eligibility. Caregivers qualify for an exemption, but it's not automatic. You must document and submit proof of caregiving responsibilities before the state system processes your eligibility review.

If you don't claim the exemption proactively, you risk losing coverage. The state doesn't know you're a caregiver unless you tell them.

How to Claim the Caregiver Work Requirement Exemption

AARP has published guidance on claiming the caregiver exemption under OBBBA work requirements. The process varies by state, but the core requirement is the same: document your caregiving role and submit it to your state Medicaid agency before your eligibility review.

What you need:

• Documentation showing you provide care for a person with a disability. This can include IEP records, disability determination letters, Medicaid waiver enrollment, or medical documentation.
• Proof of your relationship to the person receiving care (birth certificate, marriage license, guardianship papers).
• A signed statement describing your caregiving responsibilities and average hours per week.

Where to submit: Contact your state Medicaid agency directly. Each state will have its own submission portal or form. AARP's Medicaid work requirement exemption page (aarp.org) provides state-by-state links and guidance.

When to submit: Before the state begins processing work requirement reviews. Nebraska's May 1 deadline is the first. Other states will roll out over the next year. Check your state Medicaid agency website for timelines.

If you're already enrolled in a Medicaid waiver program as a paid family caregiver, you still need to claim the exemption separately. Waiver enrollment alone does not automatically trigger the work requirement exemption.

What the Credit for Caring Act Would Mean

The Credit for Caring Act, pending in Congress, would provide up to $5,000 as a federal tax credit for family caregivers to offset out-of-pocket caregiving costs. The credit targets expenses like home modifications, transportation to medical appointments, assistive devices, and other caregiving-related costs not covered by insurance or Medicaid.

As of April 2026, the bill has not passed. If enacted, the credit would apply to tax year 2026 returns filed in 2027. It's a nonrefundable credit, which means it can reduce your tax liability to zero but won't generate a refund beyond what you owe.

What counts as a qualifying expense under the proposed bill:

• Home modifications for accessibility (ramps, bathroom grab bars, widened doorways).
• Medical equipment and assistive technology not covered by insurance or Medicaid.
• Transportation costs to medical appointments.
• Respite care costs.
• Other documented out-of-pocket caregiving expenses.

The bill does not cover living expenses or costs already reimbursed by insurance, Medicaid, or another program. Keep receipts and documentation for all caregiving expenses now. If the bill passes, you'll need them to claim the credit.

State Caregiver Tax Credits

Two states currently offer caregiver tax credits: Oklahoma (enacted 2023) and Nebraska (enacted 2024). Twelve additional states are considering similar credits in their 2026 legislative sessions.

Oklahoma's credit allows up to $1,000 per year for qualifying caregiving expenses. Nebraska's credit is capped at $2,000. Both are nonrefundable credits similar to the proposed federal Credit for Caring Act.

To check if your state offers or is considering a caregiver tax credit, visit your state's Department of Revenue website or contact your state legislator's office. The AARP state policy tracker also maintains updates on pending caregiver tax credit legislation.

Respite Resources Available Now

Respite care gives family caregivers a break from daily caregiving responsibilities. It can be a few hours, a day, or longer, and it's provided by trained staff or volunteers. Many families don't know respite programs exist or assume they're not eligible.

Where to find respite services:

• ARCH National Respite Network: archrespite.org maintains a state-by-state database of respite providers, including emergency respite, planned respite, and crisis respite programs.
• State Medicaid waiver programs: Many waiver programs include respite hours as part of the benefit package. Check your state's Medicaid waiver page or contact your waiver case manager.
• Area Agencies on Aging (AAA): AAAs often coordinate respite services for caregivers of adults with disabilities. Find your local AAA through the Eldercare Locator at eldercare.acl.gov.
• Nonprofit disability organizations: Organizations like The Arc, Easterseals, and United Cerebral Palsy operate respite programs in many states. Contact your state or local chapter.

Some programs charge based on income. Others are free. Availability varies widely by state and region. If one program has a waitlist, ask about emergency respite options or alternative providers in your area.

What to Do Now

You're already providing care worth $20.41 per hour at replacement value. The policy environment is shifting that burden further onto families by cutting paid HCBS hours and threatening caregivers' own health coverage. Here's what you can do before those changes hit.

1. Claim the caregiver work requirement exemption. If you rely on Medicaid for your own health insurance, document your caregiving role and submit the exemption request to your state Medicaid agency now. Don't wait for the eligibility review letter.

The $1 trillion figure is not an exaggeration. It's the economic value of what 59 million family caregivers already do. The cuts don't reduce that number. They just shift more of it to you, unpaid and uninsured, and the exemptions, credits, and respite resources already exist to reduce your exposure.