Home Health Care Industry Trends 2025: What’s Happening?

 

75% of Americans over 50 want to stay in their own homes as they get older. This is called “aging in place.” Because of this, more and more people need help at home.

Caregiver shortage across US states is alarming. In 2025, the state of Massachusetts has only an estimated 22 caregivers per 1000 state residents needing care.

The situation is worse in states like Georgia and Nevada where estimates indicate less than 8 available caregivers per 1000 residents.

 

 

The massive deportations underway do not help the trend either.

These are some of the top home care industry trends to look out for in 2025. We’ve gathered 25 key home health care industry trends for 2025 from some of the most reputable sources, including our own internal databases after many years in the home care industry.

 

 

More Older People, More Help Needed

1. The U.S. is experiencing a rapid aging boom.

By 2030, one in five Americans will be 65 or older, as the last of the Baby Boomers reach retirement age.

The 65+ demographic is projected to grow from 57.8 million in 2022 to 88.8 million by 2060, dramatically increasing the need for in-home care and support for older adults.

These figures highlight important home care industry statistics relevant to future demand. This means lots more older folks will need help at home in the coming years.

2. Massachusetts mirrors this national trend.

The state’s population of residents age 60+ grew 13% in the last five years, and there are now more Massachusetts residents over age 60 than under age 20.

This demographic shift, especially pronounced in Greater Boston, is driving up demand for senior home care services across the Commonwealth. This means Boston and other places in Massachusetts need even more home care.

3. Older Americans overwhelmingly want to remain at home.

Roughly 75% of adults age 50+ express a strong preference to stay in their own homes as they age. More families are exploring the pros and cons of aging in place, to make informed decisions.

This desire to “age in place” is fueling demand for home care and home health services, a key aspect of trends in home care. This shows that most older people really want to stay in their own comfortable homes.

More Home Care Services

4. The U.S. home care industry is expanding rapidly!

It’s now a $286 billion market in 2024, including home health, personal care services, hospice, and related services, reflecting substantial home care industry growth.

Care is increasingly shifting to the home setting, for example, about 31% of home health referrals in 2024 come directly from hospitals, as health systems discharge patients to home-based care sooner.

The home care business is growing super fast! More people are going home from the hospital and getting care there instead. To better understand the different services available, learn more about home vs home health care.

Beyond medical services, many seniors also benefit from non-medical support such as companion care.

This segment is an important part of any non-medical home care industry analysis. As the population ages, specialized services become vital. This includes comprehensive dementia and Alzheimer’s care to support cognitive needs.

5. Utilization of home-based care is surging.

Home health patient volumes are expected to increase 22% by 2034, reflecting major growth in demand for in-home medical services over the next decade. These are key home care industry trends reflecting major growth in demand.

In Massachusetts, state budget officials have noted “unprecedented caseload growth” in elder home care programs, prompting plans to boost funding by $104 million (a 25% increase) to meet soaring demand. These are important home health industry trends.

Many more people will need home health care over the next 10 years. In Massachusetts, they are even adding $104 million to help more older people get care at home. You can find out more about specific Massachusetts home care agencies that provide these crucial services.

Finding Enough Helpers

6. Home care is one of America’s fastest-growing job sectors.

Employment of home health and personal care aides is projected to grow 21% from 2023 to 2033, far outpacing the average for all occupations.

Between 2022 and 2032, an estimated 8.9 million total job openings in direct care will need to be filled, counting new positions plus replacements for turnover, to support the burgeoning senior population.

Helping people at home is one of the fastest-growing jobs in America. We will need millions of new helpers in the next few years.

7. A significant workforce gap looms in Massachusetts.

There is a broader U.S. caregiver shortage affecting demand nationwide. The state of Massachusetts currently has only an estimated 22 caregivers per 1000 state residents needing care. The trend is similar across other cities in the US as shown on the chart below:

 

 

The state of Massachusetts will need about 30,000 additional home health and personal care aides by 2030 (nearly a 30% increase) to care for its growing elderly population, according to the Alzheimer’s Association.

There are currently ~110,000 paid aides in MA, so meeting this need will require aggressive recruitment and retention, especially in the Boston area. Massachusetts needs about 30,000 more helpers by 2030. That’s a lot of new people!

8. Providers report severe staffing shortfalls.

Massachusetts health agencies describe “unprecedented workforce shortages” across home care and human services roles. High turnover exacerbates the problem, the annual turnover rate among U.S. home care workers was nearly 80% in 2024, indicating extraordinarily high churn in caregiver jobs.

Many agencies struggle to maintain stable staffing, impacting service availability. It’s hard to find enough helpers, and many helpers leave their jobs after a short time. Almost 80% of home care workers changed jobs in 2024.

While the demand for caregivers grows, families often weigh different options for hiring. It’s important to understand the risks of private hiring versus working with agencies.

9. Stagnant wages contribute to workforce challenges.

The median wage for U.S. direct care workers is only about $16.72 per hour (in 2023), equating to roughly $25,000 per year – often for part-time hours with few benefits. As a result, about 37% of these workers live at or near poverty, and nearly half rely on public assistance to get by.

Low compensation makes it difficult to attract and keep caregivers, even as demand climbs. Many helpers don’t get paid very much money. They earn about $16.72 an hour. This means it’s hard for them to pay for what they need.

10. Massachusetts offers relatively higher pay for aides, yet still faces shortages.

The median hourly wage for home health and personal care aides in MA is about $18.00 (as of 2023), one of the highest state medians in the U.S. (national median is ~$14). Despite this, many Massachusetts home care jobs are part-time, and competition for workers is intense in a tight labor market (the state’s unemployment rate hovers around 3%).

Agencies are advocating for wage increases and better benefits to attract staff. Helpers in Massachusetts get paid a little more, about $18.00 an hour. But it’s still hard to find enough people because other jobs might pay more or be easier.

11. Real wages for caregivers have risen only modestly over time.

The median hourly pay for U.S. home care workers increased from about $12.69 in 2014 to $16.13 in 2023 (inflation-adjusted). This 27% real increase over nine years is progress, but wages have not kept pace with the cost of living in many regions.

Without further wage growth, many potential workers are opting for less demanding or better-paid jobs in other industries (e.g., retail or hospitality). Pay for helpers has gone up a bit over the last few years, but not enough to keep up with how much things cost.

How We Pay for Home Care

12. The home care sector depends heavily on government reimbursement.

Medicaid pays for roughly 69% of all U.S. spending on home- and community-based long-term care services (approximately $284 billion annually). In Massachusetts, the state Medicaid program (MassHealth) is the primary payer for home care delivered to low-income seniors.

This means public policy and budget decisions (like Medicaid rate increases or cuts) directly impact the availability of home care and the wages of home care workers.

The government program called Medicaid pays for a lot of home care services, about 69% of it. So, what the government decides about money really affects home care.

13. The cost of home care services has been climbing.

The costs of 24/7 home care can vary significantly per state and the family needs. In Massachusetts, the median annual cost for a full-time home health aide or homemaker is now $86,944 (in 2024), a 10% increase from the previous year.

 

 

Nationwide, the cost of home care has followed an upward trajectory, outpacing general inflation in recent years.

Key drivers are caregiver wage hikes (due to shortages) and overall inflation in food, transportation, and supplies needed for in-home care. The price of home care has been going up. In Massachusetts, full-time home care costs about $86,944 a year in 2024.

14. Even with rising prices, in-home care remains more affordable than institutional care.

In Massachusetts, a semi-private nursing home room costs about $173,375 per year, roughly double the annual cost of full-time home care in the state. This cost differential is similar nationwide.

Policymakers note that expanding home and community-based services can save money by averting pricier nursing home placements, while also allowing seniors to stay in their communities.

Even with rising prices, home care is still much cheaper than living in a nursing home. A nursing home can cost twice as much!

15. Despite its cost-effectiveness, the home care system often faces budget shortfalls.

In Massachusetts, the statewide Aging Service Access Points (ASAPs) – regional agencies that arrange home care – ended up with a $60 million deficit in FY2025 for purchased home care services.

This gap, if not closed by a supplemental budget, put essential services at risk.

In mid-2025 providers warned that without the $60M infusion, they might have to cut back home-delivered meals, personal care, homemaking, and other supports for thousands of seniors.

Sometimes there isn’t enough money to pay for all the home care services people need. In Massachusetts, there was a $60 million shortage in 2025. This could mean fewer meals and less help for seniors.

16. State governments are adjusting eligibility and program rules to cope with limited resources.

For example, in 2025 Massachusetts tightened the criteria and capped enrollment for its Enhanced Community Options Program (ECOP), which provides intensive at-home care to high-need seniors who might otherwise require nursing home placement.

No current clients are being cut, but new applicants must have higher care needs (and the state set a firm cap on ECOP slots).

This controversial move, essentially rationing certain home care services – reflects the budget pressures and soaring demand Massachusetts is facing.

Some states, like Massachusetts, are changing the rules for who can get certain home care services because there’s not enough money for everyone.

New Ways to Get Care

17. The pandemic spurred greater use of telehealth in home care, but some of that trend is reversing.

 

 

At the end of 2024, about 53% of home health agencies were utilizing telehealth (for virtual visits or remote monitoring), down from a peak of 65% of agencies during the height of COVID-19 in 2020. This represents a ~19% drop in adoption as emergency waivers ended.

This is one of the important home health care trends impacting service delivery. Many agencies cite lack of Medicare reimbursement, high technology costs, and questions about efficacy as reasons for scaling back telehealth use in routine home health care.

During the pandemic, more doctors used video calls to check on patients at home. Now, fewer agencies are doing this because of rules and costs.

18. Regulators have kept some telehealth allowances in place for now.

Medicare beneficiaries can continue to receive telehealth services in their home (not just in rural clinics) through at least September 30, 2025 under current federal law. Congress extended these pandemic-era telehealth flexibilities to study their impact further.

Home health providers welcome this extension but remain cautious, if Medicare coverage for in-home telehealth visits expires in 2025, agencies fear another drop-off in telehealth adoption.

The industry is watching whether policymakers will make telehealth for home care a permanent option. The government is letting doctors keep using video calls for home care until at least September 2025. People are hoping this will become a permanent option.

19. The acute “hospital-at-home” model delivering hospital-level care in patients’ homes has grown dramatically.

As of March 2025, 391 hospitals and health facilities across 39 states have received CMS waivers to provide acute care at home. (By comparison, in 2019 only a handful of hospitals offered such programs.)

This is a significant part of current home healthcare industry trends. In Massachusetts, several Boston-area hospitals (e.g., Mass General Brigham, Tufts, UMass Memorial) are among those approved.

This trend, born out of COVID-19 emergency waivers, marks a significant shift of advanced medical services (like IV therapies, monitoring, even imaging) into the home setting. Now, some hospitals are letting people get hospital-level care right in their own homes. This is a big new idea!

20. Boston is at the forefront of the hospital-at-home movement.

Mass General Brigham the region’s largest health system now operates one of the country’s biggest acute home care programs, with 50 hospital-level beds in patients’ homes as of March 2024 and plans to expand to 70 by end of 2024.

The system’s goal is to treat about 10% of its eligible medical/surgical patients at home instead of in brick-and-mortar hospitals.

Clinical leaders note research suggesting 30–40% of all care currently provided in U.S. hospitals could ultimately be delivered at home with appropriate support, indicating huge growth potential for Boston and beyond.

Hospitals in Boston are leading the way with “hospital-at-home” programs. They want to treat many patients at home instead of in the hospital.

21. Early results indicate that acute care at home can yield equal or better outcomes.

A CMS study of 11,000 patients (Nov 2021–Mar 2023) found that those receiving hospital-level care at home had lower mortality rates and fewer complications compared to similar patients treated in traditional hospitals.

Only 7.2% of hospital-at-home patients needed transfer back to the hospital for issues, suggesting most acute episodes can be managed safely at home.

Additional research from Mass General Brigham likewise showed lower 30-day mortality and readmissions for its Home Hospital patients.

These quality findings are bolstering support for extending the model. Studies show that people who get hospital care at home do just as well, or even better, than those in the hospital.

22. Delivering care in the home often proves less expensive than facility care.

A Johns Hopkins study found the Hospital-at-Home model can reduce costs by ~19% to 30% relative to equivalent in-hospital care, due to shorter lengths of stay and fewer diagnostics/procedures.

Similarly, Medicare’s Home Health Value-Based Purchasing (HHVBP) demonstration in nine states (2016–2022) achieved significant savings – CMS reported a $1.3 billion cumulative reduction in Medicare spending, largely from lower unplanned hospitalizations and nursing home usage when home health agencies improved care quality.

These financial benefits underscore why payers are encouraging more home and community-based care. It’s often cheaper to get care at home than in a hospital or nursing home. This saves a lot of money!

Focusing on Good Care

23. The home care industry is increasingly moving toward value-based care (VBC) models that tie payment to outcomes.

In 2023, 70% of surveyed home care agency leaders said their organization made operational changes in response to value-based care initiatives.

Medicare expanded the HHVBP program nationwide in 2023, meaning all Medicare-certified home health agencies are now measured and incentivized on quality metrics.

By 2027, over 60% of home care executives expect at least half of their revenue will come through value-based contracts (with Medicare Advantage or other payers) rather than traditional fee-for-service.

This shift is driving agencies to invest in quality improvement, data reporting, and care coordination to achieve better outcomes (e.g., fewer hospital readmissions).

These represent crucial home healthcare trends driving quality improvement. Home care companies are working hard to make sure they give the best care possible. They are being judged on how well their patients do.

24. After years of proposed cuts, Medicare reimbursements for home health have seen a slight uptick.

The CMS final rule for 2024 included a +3.0% increase in base payment rates, partly offset by technical adjustments, netting out to roughly a 0.8% increase in payments versus 2023. While modest, this is a relief to providers after a 4% cut in 2023.

Separately, Medicare Advantage plans have expanded supplemental benefits: as of 2024, over 450 MA plans offer in-home support services, caregiver respite, or other home care benefits (a rapid increase in such offerings).

These policy shifts are shaping important trends in home health care. These policy trends indicate a recognition that supporting care at home can improve patient satisfaction and reduce costly hospital or nursing home use.

Medicare, another government program, is giving a little more money to home health agencies. Also, more Medicare plans are offering extra help at home.

25. Mergers and acquisitions in the home care and hospice sector have slowed from pandemic highs.

There were 106 home care MA transactions in 2023, a 40% drop from the frenzy of 179 deals in 2021.

Staffing shortages and margin pressures have made some small agencies financially vulnerable, leading to sell-offs or closures, but higher interest rates and regulatory uncertainties cooled the pace of buyouts in 2024.

In Massachusetts and Boston, home health agencies have seen some consolidation into larger networks, though the number of licensed home care agencies remains high. These dynamics are shaping the broader trends in home care industry.

Analysts expect merger activity may pick up again as larger health systems and insurers continue to invest in home care capabilities to meet growing demand.

Some smaller home care companies are joining with bigger ones. This is happening less often now, but it might pick up again.