As a home care agency owner in California, you’ve navigated your share of regulations and reimbursement puzzles. Now, with 2026 on the horizon, it’s time to look ahead at what’s changing.
The Golden State’s senior population is soaring – by 2030, roughly one in four Californians will be over 60 – and policymakers are responding with new laws and programs.
Data Snapshots of Older Adults in California and Select Counties – Justice in Aging
In this article, we’ll break down anticipated shifts in home care in California licensing, labor laws, Medi-Cal funding, and support programs. Our goal is to help you stay compliant, financially savvy, and ready to thrive in the years beyond 2025. Let’s dive in.
Staying on top of California’s regulatory landscape can feel daunting, but it boils down to a few key areas: licensing requirements and labor laws.
First, remember that all home care agencies providing in-home care California services must maintain a state Home Care Organization license & ensure every caregiver is registered, background-checked, and trained.
These rules aren’t new, but compliance is being updated in subtle ways. For instance, California rescinded statewide health-care worker vaccination/testing orders in 2023; HCOs no longer track mandates, but should still monitor CDSS/CDPH bulletins.
While pandemic rules have relaxed, the state’s Department of Social Services still issues periodic Provider Information Notices – so keeping an eye on those bulletins will help you catch any tweaks in background check procedures or training guidelines.
Labor law updates demand equal attention. Minimum wage in California increases automatically with inflation, and it’s risen to $16.50 per hour on January 1, 2025 for all employers. (California’s statewide minimum wage remains $16.00 in 2025 – local city/county rates may be higher; always follow the highest applicable rate).
Further, a new state law is phasing in a $25/hr minimum wage for many health care workers by 2028. Home care aides in licensed agencies may not be directly named in that hospital-focused law, but the ripple effect – higher wage expectations & competition for caregivers – will be felt across the industry. It’s wise to budget for wage growth and communicate with clients about possible rate adjustments.
California’s health care worker minimum-wage law (SB 525) phases toward $25/hour across specific healthcare settings on tiered schedules; scope and timing vary by employer type and have been adjusted via budget trailer bills. Most licensed non-medical Home Care Organizations (HCOs) are not in the hospital/clinic tiers, but market wage pressure still affects caregiver pay. Verify your setting’s applicability before budgeting.
Did You Know?
California also strengthened its paid sick leave law in 2024 (now at least 5 days per year for all employees, up from 3 days). And crucially, overtime pay rules remain in full force.
Overtime for personal attendants is 1.5× after 9 hours in a day or 45 hours in a week under California’s Domestic Worker Bill of Rights. (Different rules apply to non-attendant roles.) – Justia
These labor standards reflect California’s commitment to fair pay – a commitment that extends to how caregivers are classified.
All home care aides must be W-2 employees, not independent contractors, per state law, which means you handle payroll taxes, workers’ comp, & other employer responsibilities.
Embracing these rules isn’t just about avoiding penalties; it also helps professionalize the home care workforce. When caregivers are treated well under the law, they feel valued and tend to stick around, which ultimately keeps client care consistent and high-quality.
Regulatory changes aren’t the only thing on the radar – funding shifts are coming, too. Medi-Cal is a cornerstone of long-term care financing, serving as the primary payer for LTSS in the state.
For home care agencies, this means staying alert to Medi-Cal policy adjustments is critical, even if you mostly serve private-pay clients, because Medicaid trends often signal where the industry is headed.
One big change has been in Medi-Cal eligibility. In recent years, California moved to make Medi-Cal more accessible to seniors by significantly raising or even eliminating the old asset limit for programs like In-Home Supportive Services. (Previously, seniors had to impoverish themselves to qualify; now they can keep more savings without losing eligibility.)
Though some expansions faced budget challenges, the overall direction is toward broader coverage for seniors. In fact, despite a tight state budget this year, lawmakers preserved funding for aging programs at baseline levels.
For agency owners, another Medi-Cal trend to watch is the rollout of CalAIM, an ambitious initiative overhauling Medi-Cal to be more community-based and prevention-focused. Under CalAIM, managed care plans can offer Community Supports (e.g., personal care, respite, home modifications) to keep members safely at home. Partnering with plans requires EVV-ready workflows.
In practice, this could translate into more opportunities for agencies to partner with health plans. Imagine getting referrals to provide short-term caregiving for a senior after a hospitalization, funded by Medi-Cal managed care.
These kinds of partnerships may become more common as the healthcare system recognizes the value of home care California models in keeping people healthy at home. To take advantage, agencies should ensure they meet the requirements (such as electronic visit verification software for homecare and electronic visit verification California compliance for Medi-Cal billing) and perhaps get on provider lists or networks with local managed-care organizations.
Finally, keep an eye on Medi-Cal reimbursement rates. With caregiver wages rising, there is pressure on the state to increase what it pays for home care services. While reimbursement updates can be slow and subject to budget politics, advocacy groups continue to push for rate hikes so that Medicaid-funded home care remains viable.
Join local Medi-Cal managed-care provider networks and ensure EVV-to-billing automation (schedule → EVV → claims) to shorten payment cycles.
Beyond Medicaid, two other funding streams are especially relevant to non-medical home care: Veterans’ benefits and long-term care insurance. Both are poised to play a growing role in 2025 and beyond, which is good news for agencies and the clients you serve.
The VA is expanding access to Veteran-Directed Care and Home-Based Primary Care; availability and capacity vary by medical center. Confirm your local program’s status before quoting timelines to families. (Recommendation to verify with local VA.)
California is also rolling out programs to help more seniors age in place safely. One major guiding light is the California Master Plan for Aging, a blueprint through 2030 that includes goals like building more age-friendly housing, supporting family caregivers, & improving home-based care access.
Under this plan, the state has introduced or expanded several initiatives relevant to home care agencies:
| Initiative | Description | Why It Matters for Home Care Agencies |
|---|---|---|
| Aging & Disability Resource Connection (ADRCs) | “One-stop” community hubs helping seniors, people with disabilities, and caregivers access services (meals, respite, transitions, etc). | Strong ADRCs mean your clients can get better support beyond what your agency provides. Agencies can form relationships with local ADRCs for referrals, smoother transitions & enhanced service value. |
| Home Modification & Fall Prevention Programs | California offers programs and grants for home-safety retrofit/improvements (grab bars, ramps, lighting) to prevent falls and support aging in place. | These are value-adds your agency can guide clients to (often cost-free to you) and help save hospital visits or avoid institutionalization—boosting your value proposition. |
| Home Safe Program | A statewide California program for older adults at risk of homelessness: heavy-chore assistance, case management, short-term housing support through county APS agencies. | Your agency might receive referrals from this program (e.g., for personal-care or cleaning in homes at risk). Being known by the county APS/“Home Safe” network opens a referral stream and ups your mission-alignment. |
| Program of All-Inclusive Care for the Elderly (PACE) Expansion | California’s PACE model is growing: comprehensive medical + social services for seniors eligible for nursing-home care, but who live at home; home-care aides are included. | The broader system is shifting more toward home-based models. Even if you don’t work directly with PACE, your agency can position itself as a great partner/alternative, piggy-backing on that trend. |
| Workforce Development Initiatives | Growing recognition of caregiver shortage in California, with training grants (community college, IHSS incentives) and other programs to up-skill/expand the home-care workforce. | A stronger, better-trained workforce makes your life easier: easier hiring, better quality, and less turnover. Being plugged into local training programs gives you first-access to new caregivers. |
Technological innovation is part of the “aging in place” movement as well. Telehealth became mainstream during the pandemic, and now remote monitoring gadgets are gaining traction. While these aren’t policies per se, government and insurance support for such tech is rising.
As an agency, being open to using technology – say, a tablet for virtual doctor visits or an app for family communication – can set you apart. It shows you’re aligned with the future, where home care & tech work together to keep seniors safe at home.
Home care in California is entering an exciting phase. Yes, the rules and funding streams are evolving, but at heart they all point in a positive direction: recognizing the value of care at home.
From Sacramento’s latest labor law to Washington’s veterans’ initiatives, the momentum is about empowering people to age with dignity in their own homes. For agency owners like you, the key to success in 2025 and beyond is to stay informed & adaptable.
Make compliance a habit, not a scramble – whether it’s updating your payroll for a minimum wage bump or refreshing home care policies and procedures to align with new state guidelines. Keep your finger on the pulse of Medi-Cal & other payers so you can diversify your revenue & fill community needs.
And above all, continue to cultivate that compassionate, human touch that defines the home care profession.
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