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The state’s In-Home Supportive Services (IHSS) program is central to keeping older adults and people with disabilities safe at home, yet it operates through a patchwork of county systems and social service agencies. This fragmentation affects access, timeliness, and quality of care for hundreds of thousands of Californians. In practice, IHSS sits outside the Department of Health Care Services and is administered through the California Department of Social Services (CDSS), county social service agencies, and county Public Authorities. The result is uneven processes across 58 counties, variable provider supports, and limited ability to align personal care with medical and behavioral health services offered through managed care.
Today, the program serves more than 800,000 recipients and employs over 700,000 providers, with more than 70% of caregivers being family members. It is also projected to serve approximately 875,000 people in fiscal year 2026–27. Yet the current finance structure — rooted in the 1991 realignment and a county maintenance of effort (MOE) established later — constrains county budgets and leaves no automatic gap-filling during downturns. Those pressures, together with workforce instability and inconsistent data systems, make a compelling case for rethinking how IHSS is organized and funded.
The fragmentation problem and its consequences
Fragmentation shows up in operational delays, inconsistent training, and gaps in service delivery that disproportionately affect people with complex needs. Counties perform eligibility assessments and manage approval processes, while county Public Authorities function as employer-of-records in most places. Managed care plans, or MCPs, meanwhile bear financial risk for institutional care like nursing facilities but cannot fully access or manage IHSS to prevent institutionalization. This split oversight weakens accountability and frustrates efforts to use data-driven population health management across medical and long-term services. Evaluations and audits have documented unmet authorized hours and long waits for assessments, contributing to avoidable hospitalizations and institutional placements.
Operational and financing drivers
Key structural drivers include the historical shift of IHSS administration to counties, changes in how counties share nonfederal costs, and the absence of mechanisms to stabilize revenue. The program’s financing evolved in 1991 and later with changes in 2012–13 and adjustments in July 2019 to the county MOE. While decentralization offered local flexibility, it also introduced fragmentation and left counties underfunded as program growth outpaced revenues. At the same time, federal pressure and budget uncertainty — including references to the H.R. 1 Act and a CMS letter noting IHSS spending increases — underscore the urgency for a model that aligns incentives across payers and providers.
The integration proposal: what it would change
The central recommendation is to fully integrate IHSS into the Medi-Cal managed care benefit, shifting administrative and financial responsibility to the Department of Health Care Services (DHCS) and contracted managed care plans. Under this approach, MCPs would handle assessments, eligibility determinations, authorization of service hours, provider credentialing, and care coordination while preserving the program’s core self-direction rights for recipients. MCPs would also gain flexibility to expand agency-provided options — similar to the limited Contract Mode now available to about 1,100 San Francisco County recipients — which can help members who struggle to hire, train, or manage their own caregivers.
Mechanics and precedents
Integration would require legislative changes to welfare code and a reworking of the 1991 realignment funding so counties’ IHSS financial responsibilities shift to the state. Possible operational models include plan-based financial management service (FMS) entities or a revived Statewide Authority to serve as employer of record. California has experimented with partial integration through the Coordinated Care Initiative (CCI) beginning in 2014; that effort improved care team coordination and authorization timelines but was discontinued in the 2017–18 budget under a provision tied to short-term General Fund savings. Lessons from CCI, as well as federal reports such as MACPAC June 2026 and state evaluations, can inform guardrails for a renewed effort.
Risks, transition, and next steps
Transitioning IHSS into managed care carries operational and political risks. Advocates fear loss of local control and erosion of self-direction, while plans vary in readiness to manage large-scale HCBS. To mitigate disruption, the state would need a phased rollout, strong continuity-of-care rules, protections for negotiated provider benefits, and transparent monitoring. DHCS could tie capitation rate adjustments and incentives to performance measures and use transitional grants similar to HHIP and IPP to help plans build capacity. Robust stakeholder engagement — including counties, Public Authorities, providers, unions, and recipients — would be essential to build consensus and ensure that integration strengthens equity, access, and long-term sustainability.