About 930,000 Californians rely on In-Home Supportive Services (IHSS) to live safely in their own homes. They include older adults and children and adults with disabilities. About 850,000 caregivers support them, and most of those caregivers are family members. Since May 2026, the federal Centers for Medicare & Medicaid Services (CMS) has deferred about $2.8 billion in federal IHSS funding across three actions, most recently in October 2026. In its deferral notices, CMS cites rapid program growth and program integrity concerns. Some federal officials and news coverage have characterized the issue as fraud. California disputes the deferrals. If the funds are not restored, the state will have to decide how to cover the gap, and those decisions will directly affect IHSS recipients and caregivers, as well as the broader state budget.
This explainer describes how IHSS works and who it serves. It also explains why caseloads and costs have grown, what CMS and the state have said about the deferrals, and what could happen if federal funds continue to be withheld.
1. What Is IHSS?
IHSS is a statewide program that provides in-home services for people with low incomes who are at risk of needing care in more expensive settings like nursing facilities. California’s 58 counties administer IHSS with oversight from the California Department of Social Services. Services are funded through Medi-Cal (California’s Medicaid program) using a combination of federal, state, and county dollars.
IHSS caregivers help recipients with day-to-day tasks known as activities of daily living. These include bathing and grooming, dressing, shopping, meal preparation and feeding, managing medications, and housekeeping. Caregivers may also go with recipients to their medical appointments. People with significant cognitive or mental impairments can qualify for extra monitoring to protect them from injury or self-harm.
2. Who Does IHSS Serve?
IHSS serves Medi-Cal recipients of all ages. As of September 2026, about 930,000 Californians were authorized to receive IHSS and the authorized service hours per month averaged 119 per enrollee. Among those authorized for services, 55% were age 65 and older, 33% were age 18 to 64, and 12% were under age 18. Note that not all IHSS enrollees actively receive services each month; the number of individuals who receive services and the amount of service hours provided are not publicly reported.
3. How Is IHSS Approved and How Are Service Needs Determined?
To receive services, a person must be found eligible for both Medi-Cal and IHSS, which have separate application processes. County social services agencies process applications for both programs and, for IHSS, determine the types and amounts of services needed by each recipient. In addition, separate county agencies known as Public Authorities enroll IHSS caregivers, orient them to the program, and help match caregivers with recipients who need them.
Once a person is found to be eligible for IHSS, a county social worker will visit their home to assess their capabilities. The social worker uses this assessment to authorize service hours for each activity of daily living. Following the initial assessment and authorization, county staff reassess a person’s needs at least once a year.
4. Who Provides These Services to IHSS Recipients?
A statewide network of authorized caregivers, totaling a little more than 850,000 individuals as of September 2026, serves IHSS recipients. Of this group, 73% were related to the recipients for whom they were caring, and 61% lived in the same home as their care recipient. IHSS recipients who have not identified a friend or family member to provide care can get help from the Public Authority in their county to find a caregiver.
All IHSS caregivers must complete a fingerprint-based background check prior to providing services. Anyone with a prior criminal conviction may need to receive an exemption or provide proof of rehabilitation before they can work for IHSS, depending on the crime and how long ago it occurred.
5. How Are Provider Hours Tracked and Providers Paid?
IHSS caregivers are required to electronically check in and out when they provide services in their client’s home, unless they live with the client. Nearly all submit time sheets electronically to the statewide IHSS system, which automatically checks them against approved hours and service types. County staff manually resolve situations that are flagged for potential issues, such as excess hours. Caregivers’ hourly wages vary, as each county is responsible for negotiating wages and benefits, which may include health care, sick leave, and retirement. As of September 2026, hourly rates range from $16.90 (the state minimum wage) to $25.00 (in San Francisco County).
Counties may conduct unannounced home visits to verify services are being provided and to ensure the recipient’s safety. Visits may be prompted by reported concerns.
6. What Are Current IHSS Caseloads and Trends?
IHSS caseloads and costs have markedly increased over the past 25 years. In FY 2001–02, the program had a monthly average of 266,400 recipients, while the current projected monthly average is 875,344. Over the same period, the annual program cost has grown from $2.4 billion to $33.4 billion.
The growth of both caseloads and cost is due to two major factors: demographic shifts and policy changes. Since 2000, the share of Californians over age 60 has increased significantly from about 13% of the population to about 23% of the population in 2025. Policy changes include a mandate that counties engage in collective bargaining with their local IHSS caregivers, which has resulted in higher wage and benefit costs; increases in the state’s minimum wage; greater focus on ensuring people’s ability to live in the least restrictive setting possible, consistent with the federal Olmstead v. L.C. decision in 1999; and implementation of the Affordable Care Act in 2014, which led to significantly more people enrolling in Medi-Cal. The upcoming implementation of H.R. 1, the 2025 federal budget bill, is likely to reduce the IHSS caseload somewhat due to new Medicaid work requirements and other changes to Medicaid rules that are predicted to lower overall enrollment.
The nonpartisan California Legislative Analyst’s Office published a comprehensive analysis quantifying how these forces translated into increased IHSS spending. Caseload growth accounts for about 50% of increased spending, while higher costs have contributed to 40% of cost growth. The remaining 10% is primarily due to growth in paid hours per case, which have risen about 2% per year.
7. What Is the Trump Administration Saying About IHSS?
In May 2026, the US Centers for Medicare & Medicaid Services (CMS) sent California a letter deferring more than $1.1 billion in federal funding for IHSS, citing two concerns:
- Growth ($501.3 million). CMS cited “significant growth” that “exceeded the growth rate of all other states” over the last two fiscal years.
- Program integrity ($632.2 million). CMS cited “significant . . . program integrity risks” but provided little detail on how it arrived at this amount, referring to claims it deemed “statistical outliers” and a small amount of claims (totaling about $13 million) processed more than a year after the date of service.
Quarterly deferrals have continued since the initial letter. On July 21, 2026, CMS notified the state that it was withholding additional federal funds, including $646.3 million for the IHSS program. A third letter dated October 20, 2026, withheld $1.086 billion from the program, including for the first time deferrals for employer payroll taxes ($247.8 million), sick leave ($57.7 million), and beneficiary services ($209 million), all of which cited questions sent to the California Department of Health Care Services (DHCS) for which responses had not yet been received, rather than specific instances of questionable program expenditures.
8. How Has the State Responded Publicly to the Deferrals?
In a press release issued May 14, 2026, DHCS referred to the deferral as “extraordinary” and expressed concern that it would “undermine exactly what federal HCBS [home and community-based services] policy has long sought to achieve: helping more people remain safely at home, rather than enter institutions for long-term care.” The state noted that CMS previously endorsed these goals and approved California’s IHSS program plans.
DHCS also added a fact sheet on IHSS program integrity efforts to its program integrity web page. Efforts include regular data matches, unannounced home visits, targeted mailings, county targeted case reviews, electronic time sheets, and other statewide measures.
Following the second deferral, DHCS issued a brief statement expressing concern that “CMS is punishing the state for growing the program to serve Californians who need it. . . . In essence, CMS now seeks to penalize California for what was CMS’ own policy.” The statement further noted that one year of in-home care saves state and federal taxpayers approximately $100,000 per person annually versus nursing facility care.
In October 2026, DHCS updated its program integrity site to include additional information and data related to its program integrity efforts and a summary infographic.
9. Has CMS Found Fraud in IHSS?
News coverage has described the deferrals as tied to fraud allegations. The letters CMS sent the state use different language. They cite “program integrity risks” and point to claims CMS considered “statistical outliers,” along with about $48 million in claims processed more than a year after the date of service and about $5 million related to other timing issues. The three letters generally cite pending requests for additional information from the state, rather than specific findings, as the reason for the deferrals. The letters do not document specific cases of fraud, and CMS has not described steps the state could take to resolve its concerns.
Speaking about the latest funding deferral in October 2026, Mehmet Oz, who leads CMS, focused on growth. He said California “has been growing that program 24% in the last three years,” which he called “twice the rate of every other state average in the country.”
The Legislative Analyst’s Office attributes most IHSS spending growth to more people qualifying for services and to higher wages and other cost growth. The program also has safeguards in place. Caregivers complete fingerprint-based background checks and check in electronically for visits. The statewide system checks time sheets against approved hours, and counties can conduct unannounced home visits.
10. Why Is California Pursuing Home-Based Services in Place of Institutional Care?
As DHCS noted in its response to the federal deferrals, California is not alone in increasing its use of home and community-based services for people with disabilities as part of an intentional shift away from institutionalization. This is a national trend that has been supported by the federal government, including the first Trump administration.
While federal Medicaid funding and policy have historically been biased toward institutional settings, home and community-based services are now viewed as a best practice and a purposeful investment to keep individuals out of more costly and less desirable institutional care. Recent reports from the US Department of Health and Human Services and the Medicaid and CHIP Payment and Access Commission show the number of Medicaid enrollees receiving home and community-based services has grown while the number receiving institutional long-term care services has dropped.
11. What Are the Implications for Enrollees and Their Families If IHSS Funds Continue to Be Withheld?
If the state and federal government are unable to resolve the deferral issue, costs will have to be reduced or covered in some other way by the state. This will increase fiscal pressure on IHSS and could lead to cuts within the program or elsewhere in the state budget to make up for lost funding.
If IHSS services or eligibility are reduced, people who today can live safely at home with the right support could be at risk of needing more costly institutional care. Families could increasingly face difficult choices to fill the resulting caregiving gaps, including reducing their work hours outside the home or continuing to work while leaving a family member with less support than they need.
