By the Unified Savers Editorial Team · Verified against CDSS sources
Last verified: June 16, 2026. Information is based on California DHCS, CDSS, and Congressional Budget Office federal Medicaid estimates.
The In-Home Supportive Services program that supports more than 700,000 elderly and disabled Californians depends on the federal government for roughly half its funding — a structural reality that puts IHSS directly in the crosshairs of Congressional budget negotiations now reshaping the national Medicaid program.
What Congress Is Proposing
The Republican budget reconciliation package advancing through Congress includes two Medicaid provisions that would most directly affect California’s IHSS:
Per-capita spending caps: Under a per-capita cap structure, the federal government would pay a fixed dollar amount per Medicaid enrollee rather than matching a percentage of state spending. California currently receives a federal medical assistance percentage (FMAP) of approximately 50%, meaning the federal government covers about half of most traditional Medicaid costs. If per-capita caps are enacted and those caps grow slower than actual healthcare costs — which historical data shows is nearly certain — California would absorb the difference. For IHSS alone, analysts estimate California could lose $2 billion to $4 billion per year in federal matching funds within a decade of enactment.
Medicaid work requirements: Congressional proposals would require non-elderly, non-disabled adults between 18 and 55 to demonstrate at least 80 hours per month of work, job training, or community service to maintain Medicaid eligibility. While most IHSS recipients are elderly or have documented disabilities and would qualify for exemptions, the administrative burden of proving exemption status has caused mass disenrollment in states where similar requirements have been piloted. Recipients who lose Medi-Cal eligibility simultaneously lose their IHSS authorization.
How IHSS Funding Works
IHSS costs are split across three payers:
- Federal government (Medi-Cal/Medicaid): Covers approximately 50% of IHSS provider wages and administrative costs through the standard FMAP rate
- State of California: Covers roughly 35–40% of total IHSS costs through the General Fund
- Counties: Cover the remaining 10–15%
California’s IHSS program cost approximately $16 billion in the 2024–25 fiscal year. A sustained reduction in the federal share would leave the state facing a multi-billion-dollar shortfall with few good options: cut recipient hours, reduce eligibility, reduce provider wages, or raise state and county taxes.
What SEIU 2015 and California Legislators Are Doing
SEIU 2015, which represents more than 700,000 California home care workers, has made fighting federal Medicaid cuts its top legislative priority in 2025 and 2026. The union organized a statewide Day of Action in Sacramento in May 2026 to pressure state legislators to publicly oppose any federal Medicaid restructuring. Over 3,000 caregivers and recipients attended.
California Attorney General Rob Bonta joined a coalition of state attorneys general in a letter to congressional leaders warning that Medicaid per-capita caps would “functionally eliminate” home- and community-based services in states with large IHSS-style programs.
What Workers and Recipients Can Do
Contact your federal representatives. The House Energy and Commerce Committee and Senate Finance Committee are the key decision points for Medicaid legislation. Personal calls from IHSS recipients and providers remain among the most effective advocacy tools.
Join SEIU 2015 advocacy campaigns. Members can sign up for action alerts at seiu2015.org or attend local lobby days organized through county SEIU chapters.
Document your disability status now. If work requirements are enacted, recipients who are elderly or disabled will need documentation proving exempt status. Keep current copies of your Social Security or SSI award letter, physician statements, and your most recent IHSS annual assessment.
The final outcome of federal Medicaid negotiations could arrive within weeks. For IHSS workers and recipients, the stakes are not abstract — they are the hours worked, the wages earned, and the care provided every day.
Understanding your rights before any cuts take effect is critical. Providers should review current IHSS overtime rules in California and recipients should know how to exercise their right to appeal IHSS hours reductions if federal changes force the state to cut authorized hours. California’s 2026-27 state budget crisis and IHSS funding compounds the federal threat by adding state-level pressure on IHSS funding simultaneously. For context on the wages now at risk, see the 2025 IHSS wage increase that raised the statewide floor to $18.65/hour.
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