Home Care M&A: Trump-Era Impacts & Uncertainty
- The home-based care industry is bracing for significant regulatory changes as the Senate finalizes its budget reconciliation package.
- Experts at Polsinelli law firm's Home Care Industry Update webinar on Tuesday warned that providers considering mergers or acquisitions must navigate an unpredictable policy landscape.
- Steven Landers, CEO of the National Alliance for Care at Home, emphasized the importance of addressing waste, fraud, and abuse."It’s worth everybody’s attention within their companies and certainly...
The home care industry faces a pivotal moment navigating regulatory shifts and labor shortages, impacting home care M&A and access to care.This analysis, featured on News Directory 3, examines the uncertain landscape, including immigration policies and their effects on staffing. We dissect how the potential for a Trump-era return could reshape key policies like the 80/20 rule, and influence dealmaking activity, particularly with private equity’s increasing role. Discover the critical factors driving the home care sector’s trajectory, the challenges providers face, and the areas poised for growth. understand sector valuations and shifts in market interest. What’s the future of these developments? Discover what’s next.
Home Care Industry Navigates Regulatory Changes and Labor Shortages
The home-based care industry is bracing for significant regulatory changes as the Senate finalizes its budget reconciliation package. Concurrently, ongoing debates surrounding tariffs, immigration policies, and varying state regulations are clouding the sectorS outlook. These factors are complicating dealmaking in in-home care, even as interest in the non-medical segment grows.
Experts at Polsinelli law firm’s Home Care Industry Update webinar on Tuesday warned that providers considering mergers or acquisitions must navigate an unpredictable policy landscape. The industry faces a fluid situation, requiring careful consideration of potential shifts.
Dr. Steven Landers, CEO of the National Alliance for Care at Home, emphasized the importance of addressing waste, fraud, and abuse.”It’s worth everybody’s attention within their companies and certainly in deal making and due diligence and all of that,” landers said. “It’s a critically significant topic that’s not going away.”
According to Landers, Medicare cuts, Medicare Advantage advancements, and labor issues are already restricting access to care.The Alliance is urging lawmakers to halt the current cycle of adjustments to mitigate these impacts.
Advocates are also closely monitoring immigration policies, as staffing shortages plague providers. Research indicates that at least 10% of the home-based care workforce consists of undocumented immigrants, compounding existing labor challenges.
The Home Care association of America (HCAOA) is exploring visa solutions, including a potential home care visa, to alleviate staffing pressures. Jason Lee, CEO of HCAOA, acknowledged that securing such a visa is “a long game, but we’re hopeful at some point in the future that we can have that promulgated and enacted to give us another way to bolster the workforce.”
Lee noted that while recent legislation fell short of the industry’s requests, the House bill included positive elements such as an expanded standard deduction for seniors and increased individual care provisions.
Lee also pointed out that a Trump governance could led to the rollback of the 80/20 rule, which mandates that 80% of Medicaid payments for homemaker, home health aide, and personal care services go to direct care worker compensation, with the remaining 20% for administrative costs.
some states are already modifying the 80/20 rule. Indiana, for example, has implemented a 70/30 split, allocating 70% for wages and 30% for administrative costs. Lee described this split as “still problematic.”
Market Status
Despite regulatory uncertainties, home-based care deals continue, though at a slower pace than the peak frenzy. Mark Kulik,senior managing director at the Braff Group,reported that dealmaking reached 223 transactions in 2021. However, 2025 is projected to see onyl 96 closed transactions if current trends persist.Kulik anticipates a slight increase in Q4, which typically sees higher deal volume.
Kulik noted that Medicare-certified home health providers are projected to close only 19 deals in 2025, potentially marking “an all-time record low within five years of setting an all-time record high.” Lingering federal and state regulations are causing “fresh uncertainty” and delaying transactions.
“Markets are basically flat from the first of this year right now,” Kulik said. “There’s no end in sight for tariff resolution and tariff agreements… You have a lot of uncertainty in the marketplace. That’s not the ideal marketplace for transactions.”
While overall dealmaking is down, Kulik observed increased momentum in specific segments. Home health and hospice deal activity has decreased over the past five years, while non-medical, publicly funded dealmaking has reached “new heights.” Private pay non-medical transactions are also on track for “another solid year.”
“Clearly, the market level of interest is turned to the non-medical side… the home care side of the post-acute health care spectrum,” Kulik said, highlighting the growing focus on activities of daily living (ADL).
Private equity-backed deals have surged in recent years, accounting for 61% of all transactions in 2025, compared to 29% in 2014. Kulik stated that private equity is a key driver of valuations and dealmaking activity in the home-based care sector.
Public companies’ EBITDA multiples have also shifted, dropping from 35 times EBITDA in 2021 to around 13 times EBITDA currently, according to Kulik.
Kulik attributed the industry’s challenges to federal-level factors, including inflation and market uncertainty, which have delayed potential interest rate reductions.