Spending through freestanding U.S. home health agencies reached $169.4 billion in 2024, up 10.2% over 2023, the second-fastest growth among the ten service categories CMS tracks. Traditional Medicare paid $16.0 billion of it. This post covers the national spending accounts, MedPAC’s 2024 volume and margin data, the CY 2026 rate cut, workforce numbers, and operator results.
Home Healthcare Market: Key Numbers
How Big Is The U.S. Home Healthcare Market?
CMS measures the home healthcare market as spending on services delivered by freestanding home health agencies. That line hit $169.4 billion in 2024 and held a 3% share of the $5.3 trillion national total.
The row worth watching is directly above it. Nursing care facilities and continuing care retirement communities took in $219.9 billion but grew 7.3%, well under home health’s 10.2%.
| Service category, 2024 | Spending | Share of NHE | Change vs 2023 |
|---|---|---|---|
| Hospital care | $1.6 trillion | 31% | +8.9% |
| Physician and clinical services | $1.1 trillion | 21% | +8.1% |
| Retail prescription drugs | $467.0 billion | 9% | +7.9% |
| Other health, residential, personal care | $320.5 billion | 6% | +9.1% |
| Nursing care facilities and CCRCs | $219.9 billion | 4% | +7.3% |
| Dental services | $189.2 billion | 4% | +6.6% |
| Other professional services | $184.9 billion | 4% | +10.8% |
| Home health care | $169.4 billion | 3% | +10.2% |
| Other non-durable medical products | $128.7 billion | 2% | +4.4% |
| Durable medical equipment | $86.4 billion | 2% | +5.4% |
Source: CMS, National Health Expenditures 2024 Highlights, calendar year 2024
Which Categories Grew Fastest In 2024?
Home health ranked second on growth, behind other professional services at 10.8%. Total national health spending rose 7.2% and reached 18.0% of GDP, up from 17.7% in 2023.
Medicare’s Share Of The Home Healthcare Market
Traditional Medicare covers under a tenth of the total. Fee-for-service paid $16.0 billion in 2024 across 2.7 million beneficiaries and 8.3 million 30-day payment periods.
Payment per in-person visit climbed from $180 in 2019 to $245 in 2024. Visits per full 30-day period fell 18.0% over the same six years, from 10.2 to 8.4.
| Fee-for-service Medicare metric | 2024 value |
|---|---|
| Total FFS home health payments | $16.0 billion |
| FFS beneficiaries receiving home health | 2.7 million |
| 30-day payment periods | 8.3 million |
| Certified home health agencies | 12,234 |
| Average payment per full 30-day period | $2,057 |
| Payment per FFS user | $6,031 |
| In-person visits per full 30-day period | 8.4 |
| 30-day periods including telehealth or remote monitoring | 2.2% |
Source: MedPAC, March 2026 Report to the Congress, Chapter 8, calendar year 2024
Where Do Hospital Patients Go After Discharge?
Home health agencies were the most frequent first post-acute destination in the first ten months of 2024, at 18.0% of inpatient discharges. That is down from the 20.1% pandemic peak but above the 15.8% recorded in 2019.
Home Healthcare Market Margins Are Driving The Rate Debate
The fee-for-service Medicare margin for freestanding agencies was 21.2% in 2024, up from 19.8% in 2023. The all-payer margin the same year was 5.0%.
MedPAC notes the FFS margin averaged 17.2% from 2001 through 2023, so 2024 was not an outlier. Commissioners voted 17-0 to recommend cutting the 2026 base rate by 7% for CY 2027, which they estimate would reduce federal spending by $10 billion to $25 billion over five years.
Geography is part of the argument. Los Angeles County absorbed $1.4 billion in 2024, roughly 9% of national FFS home health spending, from about 2% of FFS beneficiaries. Excluding California, the number of participating agencies fell 1.0% that year.
What The CY 2026 Home Healthcare Market Rule Changed
CMS finalized the rule on November 28, 2025. Aggregate Medicare payments to agencies drop 1.3%, or $220 million, versus CY 2025.
| Rule component | Rate effect | Dollar effect |
|---|---|---|
| Home health payment update | +2.4% | +$405 million |
| Permanent adjustment (−1.023% to base rate) | −0.9% | −$150 million |
| Temporary adjustment (−3.0% to base rate) | −2.7% | −$460 million |
| Updated fixed-dollar loss ratio | −0.1% | −$15 million |
| Net change versus CY 2025 | −1.3% | −$220 million |
Source: CMS, CY 2026 Home Health Prospective Payment System Final Rule fact sheet (CMS-1828-F), November 2025
Permanent adjustments have shrunk four years running. CMS applied 3.925% in 2023, 2.890% in 2024 and 1.975% in 2025 before landing on 1.023% for 2026.
The temporary adjustment addresses a separate balance. CMS puts the temporary adjustment amount for CY 2020 through CY 2022 at $4.76 billion and says it will keep analyzing the calculation through CY 2026 claims.
Home Healthcare Market Workforce Statistics
BLS counted 4,347,700 home health and personal care aides in 2024 and projects 5,087,500 by 2034. The 17% projected growth rate compares with 3% across all occupations.
Pay is the constraint. The May 2024 median annual wage was $34,900, against $49,500 for all workers.
| Metric | Value |
|---|---|
| Employment, 2024 | 4,347,700 |
| Projected employment, 2034 | 5,087,500 |
| Employment change, 2024–34 | 739,800 |
| Projected growth, 2024–34 | 17% |
| Average annual openings | 765,800 |
| Median annual wage, May 2024 | $34,900 ($16.78/hour) |
| Lowest 10%, May 2024 | Under $25,600 |
| Highest 10%, May 2024 | Over $44,190 |
Source: U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, employment 2024 and projections 2024–34; wages May 2024
Most of these aides do not work for home health agencies. Individual and family services employed 49% of them in 2024; home healthcare services employed 24%.
Home Healthcare Market Revenue At Listed Operators
Aveanna Healthcare reported $2,433.2 million in revenue for the fiscal year ended January 3, 2026, up 20.2%, and guides to $2.54 billion to $2.56 billion for fiscal 2026. Addus HomeCare posted $1.42 billion for the year ended December 31, 2025, up 23.2%, with net income of $95.9 million.
| Company | Fiscal year 2025 revenue | Change | Adjusted EBITDA |
|---|---|---|---|
| Aveanna Healthcare | $2,433.2 million | +20.2% | $320.9 million |
| Addus HomeCare | $1.42 billion | +23.2% | $180.0 million |
Source: Aveanna Healthcare Holdings, fiscal year ended January 3, 2026; Addus HomeCare Corporation, fiscal year ended December 31, 2025
Deal volume tells a different story. Mertz Taggart counted 105 closed home-based care transactions in 2025, up from 84 in 2024, then 16 in the second quarter of 2026 against 29 in the same quarter of 2025, a 44.8% drop. Two of the quarter’s closings were among the largest on record: General Atlantic’s roughly $3 billion purchase of TEAM Services Group and Kinderhook Industries’ $1.1 billion take-private of Enhabit.
Ownership runs through the payers. Optum, part of UnitedHealth Group, completed its LHC Group purchase in 2023 and finalized Amedisys in 2025, then sold 54 agencies to Pennant Group for $146.5 million. Humana’s home care business was built on Kindred at Home, completed in 2021.
Other diversified health companies sit adjacent rather than inside the CMS line. Elevance Health runs care delivery through Carelon, and the CVS Health group operates its own health services arm. On the hardware side, Philips supplies home respiratory and patient-monitoring equipment. CMS reports national spending by service and payer, not by agency owner.
Hospital-At-Home Policy Shaping The Home Healthcare Market
The Acute Hospital Care at Home waivers were set to expire January 30, 2026. Section 6210 of the Consolidated Appropriations Act, 2026, signed in February 2026, extended them through September 30, 2030.
The American Medical Association reported 366 approved programs across 139 health systems in 37 states following the extension. The American Hospital Association counted 419 approved hospitals across 147 systems and 39 states as of September 2025; the two counts use different units and different dates.
The Act also appropriates $2.5 million for CMS to compare the quality and cost of hospital-at-home care against traditional inpatient care. That study has not reported.
FAQs
How big is the U.S. home healthcare market?
Spending on freestanding home health agencies was $169.4 billion in 2024, a 3% share of the $5.3 trillion national health total, per CMS. That figure measures revenue to agencies, not patient counts.
How much of the home healthcare market does Medicare pay for?
Traditional fee-for-service Medicare paid $16.0 billion in 2024, covering 2.7 million beneficiaries across 8.3 million 30-day periods, according to MedPAC’s March 2026 report. The rest comes from Medicaid, Medicare Advantage, private insurance and out-of-pocket payments.
Do Reddit posts about low home health aide pay match the official data?
Reddit threads are self-selected anecdotes, not a survey. BLS puts the May 2024 median annual wage for home health and personal care aides at $34,900, or $16.78 an hour, against $49,500 for all occupations.
Are home health agencies as profitable as Reddit threads suggest?
Reddit discussion is anecdotal, but MedPAC’s audited figure for 2024 was a 21.2% fee-for-service Medicare margin at freestanding agencies. The all-payer margin was 5.0%, and hospital-based agencies averaged −15.2%.
Are Medicare home health rates being cut in 2026?
Yes. CMS finalized an aggregate 1.3% decrease, or $220 million, for CY 2026. MedPAC has separately recommended cutting the 2026 base rate by 7% for CY 2027.
Sources
https://www.cms.gov/files/document/highlights.pdf
https://www.medpac.gov/wp-content/uploads/2026/03/Mar26_Ch8_MedPAC_Report_To_Congress_SEC.pdf
https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm
