Human Services

Update on Home- and Community-Based Services (HCBS)
Spending Plan

Temporary Increase to Medicaid Federal Share of Cost for HCBS Programs and Services. Under the American Rescue Plan Act of 2021, the federal government increased the federal medical assistance percentage (FMAP) by 10 percentage points for Medicaid-funded HCBS services and programs provided from April 1, 2021 through March 31, 2022. (The FMAP represents the federal government’s share of cost for Medicaid services eligible for cost sharing.) States had discretion about whether to claim the additional funding (which we refer to throughout this post as the “increased HCBS FMAP funding”) for some or all of its HCBS expenditures during the spending period, provided they meet certain program requirements. For example, states could not replace existing state funding for HCBS programs and services with the increased HCBS FMAP funding; rather, the increased HCBS FMAP funding had to be spent on new—or enhanced—programs that are in addition to existing state HCBS funding.

States Required to Spend an Amount of State Funding Equivalent to the Increased HCBS FMAP Funding on New HCBS Expansions and Enhancements. The state’s decision to claim increased HCBS FMAP funding reduced its share of cost for existing HCBS services by an equal amount (in California’s case, $2.8 billion). The federal government requires states to “reinvest” these freed-up state funds on expanded, enhanced, or strengthened HCBS services (which we refer to throughout this post as “HCBS enhancements”). These HCBS enhancements must supplement and build upon existing HCBS activities in place as of April 1, 2021 in either Medicaid-funded or non-Medicaid-funded services and programs. The state was given until March 31, 2024 (later extended to March 31, 2025) to fully expend the required amount of funding on HCBS enhancements. As shown in Figure 1, by the March 2025 deadline, the state’s HCBS Spending Plan included 26 HCBS activities with a total expenditure of roughly $4.7 billion, including roughly $2.8 billion HCBS FMAP funds and an additional $1.9 billion in federal matching funds for Medicaid-eligible HCBS activities.

Figure 1

Summary of California’s Home‑ and Community‑Based Services (HCBS) Spending Plan

Home‑ and Community‑Based Services Spending Plan Activities	Total Expenditures^a(In Millions)
Workforce: Retaining and Building Network of Home‑ and Community‑Based Direct Care Workers
In‑Home Supportive Services (IHSS) Career Pathways. Provide specialized training opportunities to IHSS providers.	$298.8
Direct Care Workforce (Non‑IHSS) Training and Stipends. Provide specialized training opportunities to non‑IHSS HCBS providers.	121.8
IHSS HCBS Care Economy Payments. Provide one‑time $500 payments to IHSS providers that worked at least two months between March 2020 to March 2021.	287.4
Non‑IHSS HCBS Care Economy Payments. Provide one‑time $500 payments to non‑IHSS HCBS care providers that worked at least two months between March 2020 to March 2022.	3.7
Increasing Home‑ and Community Based Clinical Workforce. Increase the number of home‑ and community‑based clinical care providers for individuals with disabilities and aging adults.	75.0
Providing Access and Transforming Health Funds for Homeless and HCBS Direct Care Providers. Expand homeless system of care and create an effective pre‑release care for justice‑involved populations.	92.5
Traumatic Brain Injury (TBI) Program. Expand the capacity of existing TBI sites and stand up new TBI sites.	5.0
Home‑ and Community‑Based Services Navigation
No Wrong Door/Aging and Disability Resource Connections (ADRC). Support ADRC program operations, including data collection and sharing practices.	$3.0
Dementia Aware and Geriatric/Dementia Continuing Education. Develop a cognitive health assessment tool and provide geriatric/dementia trainings to health care providers.	22.6
Language Access and Cultural Competencies Orientations and Translations. Provide funds to translate Department of Developmental Services (DDS) documents, coordinate and streamline interpretation and translation services, and ensure culturally appropriate translations.	16.7
CalBridge Behavioral Health Pilot Program. Hire trained behavioral health navigators in emergency departments to screen and refer patients to mental health or substance use disorder programs.	40.0
Home‑ and Community‑Based Services Transitions
Eliminating Assisted Living Waiver Waitlist. Eliminate Assisted Living Waiver waitlist by increasing waiver slots by 7,000.	$488.9
Housing and Homelessness Incentive Program. Provide incentive funds to Medi‑Cal managed care plans to address homelessness and keep beneficiaries housed.	1,070.8
Community Care Expansion Program. Acquire, rehabilitate, or construct adult and senior care facilities.	53.4
Laguna Honda Enhanced Transition Services Benefit. Transfer Medicaid‑funded residents of Laguna Honda Hospital to new care setting.	0.05
Services: Enhancing Home‑ and Community‑Based Services Capacity and Models of Care
Alzheimer’s Day Care and Resource Center. Provide dementia‑capable services at licensed Adult Day and Adult Day Health centers.	$5.0
Older Adults Resiliency and Recovery. Provide funding to various older adult programs, including food assistance, legal services, employment services, and behavioral health line.	80.2
Coordinated Family Support Services. Create pilot to assist families in coordinating the receipt and delivery of services for DDS consumers living in the household.	2.0
Enhanced Community Integration for Children and Adolescents. Provide local grants to develop integrated community‑based social recreational activities for children with and without developmental disabilities.	10.0
Social Recreation and Camp Services for Regional Center Consumers. Provide camping services, social recreation activities, educational therapies, and nonmedical therapies for eligible individuals who have a developmental disability.	17.1
Developmental Services Rate Model Implementation. Implement rate models recommended by the 2019 Rate Study.	1,940.2
Contingency Management. Implement treatment pilot for stimulant use disorder.	12.8
Home‑ and Community‑Based Services Infrastructure and Support
Long‑Term Services and Supports (LTSS) Data Transparency. Create LTSS Data Dashboard linked with statewide nursing home and HCBS utilization, quality, demographics, and cost data.	$1.9
Modernize Regional Center Information Technology Systems. Conduct initial planning process to update the regional center fiscal system and implement a statewide Consumer Electronic Records Management System.	7.5
Access to Technology for Seniors and Persons With Disabilities. Increase access to technology for older adults and adults with disabilities.	44.7
Senior Nutrition Infrastructure. Provide capacity and infrastructure improvement grants to senior nutrition program vendors.	33.6
Total	$4,735
^aReflects HCBS Spending Plan activities and expenditure levels as of March 2025.

Over Expenditure in In-Home Supportive Services (IHSS) Career Pathways Program Results in Additional 2024-25 General Fund Spending. On September 16, 2024, the Department of Social Services (DSS) ended training enrollment for the IHSS Career Pathways program, ahead of schedule. This was done because projected expenditures at that time had already surpassed the programs HCBS allocated funds (Please see our analysis of the Governor’s 2025-26 Budget for more information). In February 2025, the administration identified increased expenditures of $61.4 million above the IHSS Career Pathways HCBS allocation. However, the administration also identified approximately $37.4 million in unspent HCBS funds (primarily in California Department of Aging HCBS programs) which were then used to partially offset the over expenditure in IHSS Career Pathways. To address the final identified funding gap, the administration increased the 2024-25 General Fund spending by $24.9 million for the IHSS Career Pathways program.

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The 2025-26 California Spending Plan

Human Services

Update on Home- and Community-Based Services (HCBS) Spending Plan

Update on Home- and Community-Based Services (HCBS)
Spending Plan