The effects of the Home Care Rule on care utilization and expenditure for U.S. older adults

Abstract This paper investigates the demand-side impacts of the 2015 Home Care Rule (HCR), which extended minimum wage, overtime, and travel-pay protections to home care workers. Using a difference-in-differences approach with Health and Retirement Study data from 2008 to 2018, we find that the HCR reduced older adults’ probability of using paid home care by approximately 4.8 percentage points and reduced hours of paid home care by about 0.46 h per day, with non-users coded as zero. We find no statistically significant effect on days of paid home care per week or monthly out-of-pocket expenditures on paid home care. We also find no robust evidence that reductions in paid home care were systematically offset by increased use of home health services, institutional formal care, or care from family members or friends. These findings highlight potential unintended consequences of labor regulations in long-term care markets, particularly reduced access to paid home care for older adults.