If you're caring for a disabled family member through a Medicaid self-directed care program and getting paid for that work, you need to verify your state's program status immediately. Maryland just announced it's cutting family caregiver wages by more than 25% and capping weekly hours starting July 1. Households that currently depend on this income are looking at losses of $18,000 to $80,000 per year. Other states are watching Maryland's move, and similar cuts are expected to follow.

This isn't about the federal Medicaid work requirements that don't take effect until January 2027. This is about state governments acting preemptively to close their own budget gaps before federal cuts even hit. Maryland's Democratic-controlled legislature and Gov. Wes Moore adopted the cuts after hearings where dozens of disabled program recipients and families pleaded with lawmakers to restore funding. The cuts are happening, and families have six weeks to prepare.

What Self-Directed Medicaid Programs Are and Why They Matter

Self-directed care goes by different names depending on your state: Consumer Directed Personal Assistance Program (CDPAP) in New York, Cash & Counseling programs in some states, participant-directed care, or self-directed Home and Community-Based Services (HCBS) waiver programs. The structure is the same. Medicaid pays family members or friends chosen by the person with disabilities to provide personal care at home instead of requiring care from agency-employed workers.

These programs exist in all 50 states in some form, according to KFF data. The average hourly rate for Medicaid personal care is around $18 per hour nationally, but rates vary widely by state and program type. Family caregivers in these programs provide bathing, feeding, medication management, mobility assistance, and supervision for people who can't be left alone safely.

Molly Morris, co-founder of the Self-Direction Center, told NBC News that attacking paid family caregiving could overwhelm a system already strained by workforce shortages and long waiting lists for services. Nearly 1 in 3 home care workers are immigrants, and the direct care workforce has been chronically understaffed for years.

Why States Are Cutting Caregiver Pay Now

The federal Omnibus Budget and Benefits Balancing Act (OBBBA), enacted July 4, 2025, includes $911 billion in Medicaid cuts over 10 years. State work requirements tied to that law don't go into effect until January 2027. But states aren't waiting. They're making cuts now to close their own budget gaps in anticipation of reduced federal Medicaid funding.

Maryland is slashing $126 million from programs serving people with developmental disabilities. Beginning July 1, the state will significantly reduce family caregivers' wages and cap the number of hours they can be paid each week. Melissa Gonce, who earns about $67,000 per year caring full-time for her profoundly disabled 28-year-old son Jason, will see her wage drop to $23.69 per hour. That translates to roughly an $18,000 annual loss. Other Maryland households with multiple family caregivers say their incomes may be cut by more than $80,000.

In Nebraska, Anna Keyzer's income would be slashed by nearly $70,000 under proposed Medicaid program changes. She cares full-time for her 21-year-old son Simon.

Some conservative policymakers have called family caregiver programs wasteful and prone to fraud. RFK Jr. called these programs "rife with fraud" in April. That rhetoric is now being used to justify budget cuts at the state level.

What the Financial Impact Looks Like

If you're currently paid as a Medicaid family caregiver, the financial hit will show up in two places: reduced hourly wages and reduced weekly hour caps.

Maryland's cuts work like this: if you're currently paid $32 per hour for 40 hours per week, you're earning $66,560 per year. If your wage drops to $23.69 per hour and your hours are capped at 30 per week, you'll earn $37,075 per year. That's a loss of $29,485.

The larger your household's current caregiver income, the larger the loss. Households with two family caregivers both providing full-time care will see the biggest impact. In Maryland, some families report they'll lose more than $80,000 annually.

States cutting these programs aren't offering alternative services. You can't hire an agency worker for the reduced rate if the agencies can't staff at current rates. The direct care workforce shortage means many families won't have a replacement option even if they had the money to pay for one.

Five Actions Self-Directing Families Can Take

1. Verify Your State's Current Program and Any Announced Rate Changes

Contact your state Medicaid agency and ask directly whether your state has announced changes to self-directed care programs, family caregiver wage rates, or weekly hour caps. Don't rely on news coverage alone. Get the information from the agency administering your program.

If your state has announced changes, ask for the implementation date, the new wage rate, the new hour cap, and whether existing participants will be grandfathered or subject to the new rules immediately.

2. Document Your Care Arrangement Fully

Write down exactly what care you provide, how many hours per week, and what would happen if you couldn't provide that care. Include specifics: bathing frequency, feeding schedule, medication administration times, supervision requirements, mobility assistance needs.

This documentation is the factual record you'll need if you file comments with your state Medicaid agency or contact legislators. It's also the baseline you'll need if you have to appeal a reduction in services or hours later.

3. Contact Your Fiscal Intermediary

If you're in a self-directed program, you're likely working with a fiscal intermediary (FI) or financial management services (FMS) entity that processes your payroll and handles employer-of-record functions. Contact them now and ask what changes are coming to your pay rate, your weekly hour cap, and your total authorized hours.

Your fiscal intermediary may have information about state implementation timelines that hasn't been publicly announced yet. They're also the entity that will process any appeals or reconsiderations if your hours are reduced incorrectly.

4. File a Formal Comment With Your State Medicaid Agency

Most states are required to provide a public comment period before implementing major Medicaid program changes. If your state has announced cuts but hasn't implemented them yet, file a formal written comment with your state Medicaid agency.

Include your name, your program participant's name, the number of hours you currently provide, the income you currently earn, what the proposed cut will cost your household, and what services will go unprovided if your hours are reduced. Attach the documentation you created in step 2.

Public comments become part of the administrative record. If the cuts are challenged in court later, those comments matter.

5. Contact Your State Legislators Before Implementation Dates

Maryland families testified at legislative hearings pleading with lawmakers to restore funding. The cuts passed anyway. That doesn't mean your state will follow the same path, but it does mean testimony alone isn't enough.

Contact your state representative and state senator. Tell them you're a constituent who provides paid family care through Medicaid and that proposed cuts will cost your household a specific dollar amount. Give them the number: "$18,000 per year" or "$70,000 per year" or whatever your calculation shows. Ask them directly whether they'll support restoring that funding.

Follow up in writing. Send an email or letter with the same information. If there's a hearing scheduled, attend and testify. Bring other families if you can.

What to Expect Next

Maryland's cuts take effect July 1. If other states follow Maryland's lead, you may see announcements in your state over the next few months. The timeline matters. Federal Medicaid work requirements don't start until January 2027, but state budget actions are happening now.

States are already cutting Medicaid services to cover anticipated federal losses. Self-directed family caregiver programs are a visible target for legislators looking for large dollar amounts to cut quickly.

If you're in a self-directed program, the most important thing you can do right now is verify your state's status. Contact your state Medicaid agency, contact your fiscal intermediary, and get the facts about whether cuts are coming to your program. The earlier you know, the more time you have to document your situation and take action.