Sweeping regulatory changes are in store for the home-based care industry as the Senate works to finalize a revised budget reconciliation package. Meanwhile, questions around tariffs, immigration policy and state-level regulations continue to complicate the outlook. These uncertainties are adding complexity to in-home care dealmaking — though the non-medical home care segment remains an area of growing interest.

As policies shift, providers pursuing mergers or acquisitions will need to navigate a fluid and often unpredictable policy environment, industry experts cautioned on Polsinelli law firm’s Home Care Industry Update webinar on Tuesday.

“Dr. Oz’s primary focus out of the gate is on waste, fraud and abuse,” Dr. Steven Landers, CEO of the National Alliance for Care at Home (the Alliance), said. “It’s worth everybody’s attention within their companies and certainly in deal making and due diligence and all of that. It’s a critically important topic that’s not going away.”

Medicare cuts and advances in Medicare Advantage, along with wage and other labor issues, are already impacting access to care, according to Landers. The Alliance has begun to encourage lawmakers to stop the current cycle of adjustments.

At-home care advocates are also closely monitoring immigration policies. Providers already grapple with staffing shortages, and at least 10% of home-based care workers are undocumented immigrants, according to research. 

To address further staffing challenges, the Home Care Association of America (HCAOA) is exploring solutions for visas, including the introduction of a home care visa.

“[It’s] 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,” Jason Lee, CEO of the Home Care Association of America, said.

While recent legislation falls short of what the home-based care industry advocated for, some positive elements were included in the House bill, Lee said, including an expanded standard deduction for seniors and increased individual care.

The Trump administration also represents an increased likelihood of rolling back the 80/20 rule, according to Lee. The Medicaid access rule requires that 80% of Medicaid payments for homemaker, home health aide, and personal care services be allocated to direct care worker compensation, and 20% be allocated toward administrative costs.

Some states are modifying the 80/20 rule, including Indiana, which has implemented a 70/30 split, requiring 70% of payments to be allocated for wages and 30% for administrative costs. This split is “still problematic,” Lee said.

Market status

As regulatory tensions persist, home-based care deals have continued to close, albeit at rates far below those seen at the height of home-based care’s dealmaking frenzy.

Dealmaking reached a peak in 2021, with 223 completed transactions, according to Mark Kulik, senior managing director at the Braff Group. In contrast, dealmaking in 2025 is set to reach only 96 closed transactions, if current trends continue. However, this number is likely to “tweak up,” according to Kulik, as dealmaking in Q4 is typically higher than earlier quarters.

Narrowing in on Medicare-certified home health providers, only 19 deals are likely to close in 2025, if current trends continue, which would be “an all-time record low within five years of setting an all-time record high,” Kulik said. Federal and state-level regulations that are in limbo are causing “fresh uncertainty” and stalling deals.

“In the bigger picture, you’ve got the big, beautiful bill that still needs to be finalized,” Kulik said. “Markets are basically flat from the first of this year right now. There’s no end in sight for tariff resolution and tariff agreements. There’s been one new war that’s propped up here in the past five days or so to existing wars that have not been resolved. You have a lot of uncertainty in the marketplace. That’s not the ideal marketplace for transactions.”

As dealmaking trends lower than in previous years, some segments see more momentum, Kulik said.

Over the past five years, dealmaking activity in the home health and hospice segments has decreased significantly, Kulik said. Meanwhile, non-medical, publicly funded dealmaking activity has reached “new heights” despite low home health and hospice dealmaking. Private pay non-medical transactions are also set for “another solid year.”

“Clearly, the market level of interest is turned to the non-medical side, the [activities of daily living] (ADL) side, the home care side of the post-acute health care spectrum,” Kulik said.

Private equity-backed deals have also dramatically increased in recent years. In 2014, private equity deals accounted for 29% of home-based care and hospice dealmaking. Year to date in 2025, private equity has been responsible for 61% of all transactions in the marketplace.

Private equity is driving the valuations of home-based care companies, as well as dealmaking activity, Kulik said.

As dealmaking trends continue to evolve, public companies’ EBITDA is also undergoing a transition. Public companies traded at 35 times EBITDA in 2021, Kulik said, but now trade at around 13 times EBITDA.

Overall, federal-level factors are hindering the industry, according to Kulik. Increases in inflation and market uncertainty slowed the potential for further interest rate reductions.

“What’s holding us back is we’re waiting for rate reductions from the Fed right now,” Kulik said. “We’re still at a watchful point in the marketplace, waiting for the Fed to drop the rate. I think that will stimulate more activity in the marketplace and higher valuations.”