PHI Presses Washington With 12-Point Plan to Lift Direct Care Pay, Warns of 1.2M Job Gap by 2027

PHI, the national nonprofit focused on the direct care workforce, is urging federal leaders to adopt an aggressive, 12-step plan to stabilize frontline caregiving jobs and prevent deepening staffing shortages across home care, assisted living, and nursing homes.

In a new roadmap released this week, PHI calls for a $20-per-hour federal wage floor for direct care workers, higher Medicaid reimbursement to fund workforce supports, and a national registry that standardizes training and credentials. The group frames the agenda as a government to-do list designed to professionalize the field and head off a projected 1.2 million unfilled positions by 2027.

What PHI is proposing

The roadmap, titled The Path Forward: Preserving, Strengthening, and Reimagining Care in the United States, outlines immediate and longer-term steps. Near-term ideas include emergency wage subsidies through existing workforce programs and targeted retention incentives. Longer range, PHI backs a federal Direct Care Corps modeled on national service programs, expanded immigration pathways for trained caregivers, and portable benefits that follow workers across jobs.

Other recommendations include tax credits for providers that offer family-sustaining wages, standardized universal direct care competencies across settings, and wage tiers that lift pay to $25 per hour in high-cost regions. A national registry would align training and credentials across states, easing career advancement and portability, according to the report.

A workforce under strain

PHI estimates more than 5 million people work in direct care roles, including certified nursing assistants, home health aides, and personal care aides. Median pay sits around $16.50 per hour, and turnover in some states tops 80%, industry reports show. The organization projects demand could reach 10 million workers by 2035 as the U.S. population ages, outpacing current recruitment and retention efforts.

Demographic pressures amplify the challenge. PHI notes that a significant share of caregivers are immigrants and women of color, groups that face persistent wage gaps and, in some cases, policy uncertainty that can affect employment and stability. Rural communities report higher vacancy rates, while urban, high-cost markets struggle to keep workers from leaving for better-paying service jobs.

This roadmap is our blueprint to preserve, strengthen, and reimagine care before its too late, PHI CEO Susan R. Mende said in a statement, warning that continued inaction could further erode access to services for older adults and people with disabilities.

Policy headwinds and timing

The plan arrives amid contentious debates over Medicaid funding, workforce standards, and immigration policy. PHI argues that recent federal proposals to trim Medicaid and other safety-net programs, combined with stricter immigration enforcement, risk undermining a workforce already stretched thin. The roadmap also intersects with congressional work on reauthorizing the Older Americans Act, where workforce provisions could be added, according to industry sources.

Supporters in the aging services sector say the package mirrors long-standing calls to align reimbursement with rising labor costs, while critics warn the ideas would expand federal mandates and spending. PHI counters that higher wages and standardized training would lower turnover and improve care quality, ultimately reducing costs tied to hospital readmissions and delayed discharges.

What it could mean for providers

Implementing a $20 wage floor would raise labor costs, particularly for Medicaid-reliant operators. But PHI points to potential offsets: fewer vacancies, lower recruitment and onboarding expenses, and improved continuity of care. The groups analysis suggests facilities could recoup part of the investment through stabilized staffing and better outcomes, especially if higher Medicaid rates are tied to workforce improvements.

Industry observers note the impact would vary by market. Rural and low-margin facilities may require targeted relief to keep beds open, while large multi-state operators could benefit from standardized training that eases cross-state hiring and internal mobility.

What’s next

PHI is pressing Congress and federal agencies to pick up the recommendations in upcoming budget and authorization debates. The group also plans to work with states on pilots, including competency-based training and retention incentives, according to the report. Whether Washington adopts the full agenda remains to be seen, but PHIs warning is clear: without swift action, staffing gaps will widen just as care needs accelerate.