How to start a home care business in 2026

First decide: non-medical care or home health. They are different businesses. Non-medical home care is help with daily living — bathing, dressing, meals, companionship, housekeeping, rides — which California's regulator describes as "non-medical services and assistance" (California CDSS fact sheet, April 2022). A home health agency is "primarily engaged in providing skilled nursing services and other therapeutic services" (CMS, August 2026). Medicare pays for home health — part-time or intermittent skilled nursing, therapy, and aide care only alongside it — and says it doesn't pay for 24-hour-a-day care at home, or for "Custodial or personal care that helps you with daily living activities (like bathing, dressing, or using the bathroom), when this is the only care you need" (Medicare.gov). That is why this guide is about non-medical care, paid mostly by families.

Home health is a far bigger start. A Medicare home health agency needs a state license, certification through a state survey or an accrediting body with "deemed status" such as ACHC (ACHC), a nurse to run the clinical side, and reserve operating funds held from its application until three months after Medicare lets it bill — at least half of it the owner's own money, not borrowed (42 CFR 489.28). At least 15 states and DC require a certificate of need for home health (Alliance for Care at Home, May 2026). And on May 13, 2026, CMS paused new Medicare home health agency enrollments nationwide for six months (Federal Register, May 2026) — a pause it can extend in six-month steps (CHAP, May 2026). Check its status before you plan one. It doesn't touch non-medical agencies.

Licensing: the shape, then your state. In the US there is no national license for non-medical home care; it is the state's call, and the rules differ in what they cover. Some states license companion and sitter care too — Georgia's private home care provider license covers "companion or sitter tasks" (Ga. Comp. R. & Regs. 111-8-65-.03), North Carolina's home care license covers in-home companion, sitter and respite care for $510 to start and $510 a year (NC DHSR, May 2025), and Pennsylvania licenses home care agencies and registries for non-skilled services including companionship (Pennsylvania DOH); Ohio has required a license for agencies providing nonmedical home health and personal care services since October 1, 2022 (Dinsmore, September 2022). Others license hands-on personal care but not companionship alone: Texas licenses personal assistance services as a home and community support services agency, at $2,625 (26 Tex. Admin. Code §558.3), and exempts sitter-companion and household help that involves no personal care (Tex. Health & Safety Code §142.003); Florida asks companion and homemaker services to register for $50 every two years (Fla. Stat. §400.509), and its companions "may not provide hands-on personal care" (Fla. Stat. §400.462) — that comes from a licensed home health agency, or an aide referred by a licensed nurse registry (Fla. Stat. §400.506).

The biggest states, by their own pages. California: a Home Care Organization license is $5,603 for two years, and each caregiver is registered as a home care aide for $35 (California CDSS). New York: a licensed home care services agency application is $2,000, and since April 2020 there is a public-need test: where five or more agencies are actively serving patients in a county, "there is a presumption that no additional LHCSAs are needed in that county" (New York DOH, New York DOH, January 2026). Illinois: a home services agency license is $1,500, paid with the application (Illinois IDPH). Washington: $5,000 for the first 12 months from June 2026, plus a surcharge for each extra county (WAC 246-335-990), and liability insurance of $1 million per occurrence (WAC 246-335-320). Minnesota: a basic home care license is $2,100 and a comprehensive one $4,200 (Minn. Stat. §144A.472). Licensing can take weeks or months, so check your state's health department before you take a client — and look again before you apply, because fees change.

Hire caregivers as employees, and check them. If your agency sets the schedule and directs the work, the IRS's test points to employees, not contractors (IRS); the registry model, where families hire and pay the caregiver, is its own license in some states. Background checks are the norm where home care is licensed — California's state and FBI fingerprint fees are $32 and $17 a person (California fingerprint form) — and if you bill Medicaid or another federal program, check every hire against the federal exclusion list, because the payment ban reaches "anyone who employs or contracts with the excluded person" (HHS-OIG, April 2026). Training hours are set by the state: California requires five hours before a caregiver provides care and five more each year (California Assembly analysis, June 2025); Illinois five hours before the first assignment, five more within 30 days and ten a year (77 Ill. Adm. Code 245.71); Washington 75 hours — five before giving care, the rest within 120 days of hire (RCW 74.39A.074) — then a certification exam (Washington DOH).

Pay overtime, and price it in. Under the Department of Labor's 2013 home care rule, agencies can't use the companionship or live-in exemptions — their caregivers get minimum wage and overtime (29 CFR 552.109); the companionship exemption itself only covers hands-on care that "does not exceed 20 percent of the total hours worked" in a week (29 CFR 552.6). In July 2025 the department proposed returning to the older rules (Federal Register, July 2025), and it stopped enforcing the 2013 rule against agencies while the proposal is pending — but "the 2013 rule remains in effect, for now," and that doesn't stop a caregiver's own lawsuit (Jackson Lewis, September 2025). As of October 2026 it is still a proposal, and many states have their own overtime laws. Price live-in and 24-hour care with overtime in.

Insurance and bonding. Insureon's medians for caregivers who apply with it are $30 a month for general liability, $12 for professional liability, $12 for a fidelity bond — it covers theft by an employee — and $211 for workers' compensation (Insureon, February 2025): small-business medians, not a market survey. Workers' comp grows with payroll; a broker puts the 2025 average for home health businesses at $2.79 per $100 of payroll (1-800-Insurance, January 2026). Whether you must carry it is set by each state — some require it from the first employee, some only above a headcount, and Texas lets most private employers choose (Texas Department of Insurance). Check your state. Some states set minimums, like Washington's $1 million of liability above. Check your state's rules and ask your agent what your payers require.

Set the hourly rate from the bottom up. Start from what the hour costs you: the caregiver's wage, the employer's 7.65% for Social Security and Medicare (IRS), unemployment tax and workers' comp — then add your overhead and margin, and check the result against your state's CareScout median. Set a minimum visit, a weekend and holiday rate, and a live-in or 24-hour rate with overtime counted. CareScout also tracks private-duty nursing, at a $90 national median hour in 2025 (CareScout, March 2026) — the price of skilled care, not non-medical.

Who pays. Private pay — families, from savings or income — is where several of the owners quoted below started. Tax-qualified long-term care policies pay for someone expected to be unable to do at least two activities of daily living, such as bathing or dressing, for at least 90 days, or who needs substantial supervision because of severe cognitive impairment — the federal definition (26 U.S.C. §7702B). Medicaid's home- and community-based services can include homemaker, home health aide, personal care and respite services (42 CFR 440.180); you enroll with your state's program, and states require electronic visit verification for Medicaid personal care visits — federal law cuts their funding if they don't (42 U.S.C. §1396b(l)). And from July 2030, states must ensure agencies spend 80% of Medicaid payments for those services on direct care workers' pay (42 CFR 441.302(k)). The VA buys homemaker and home health aide care from agencies that contract with it (VA, March 2026), through regional networks run by Optum and TriWest (VA, July 2026); Veteran-Directed Care gives veterans a budget to hire their own help (VA); and Aid and Attendance is a monthly payment added to a veteran's pension — paid to the veteran, not to an agency (VA, May 2026).

Franchise or independent. A franchise sells you the brand, the training and the playbook. Disclosed total investments run $91,040 to $269,750 for Home Instead, with a $54,000 fee and a 5% royalty (1851 Franchise, 2025 disclosure); $94,330 to $176,239 for Right at Home (1851 Franchise, 2026 disclosure); $119,560 to $190,700 for Comfort Keepers, with a $55,000 fee and 5% plus 2% for the brand fund (Comfort Keepers, 2026 disclosure); and $125,460 to $171,150 for Visiting Angels, with a 3.5% royalty (1851 Franchise, 2025 disclosure). Independent, you keep the royalty and build the name yourself.

Getting the first clients. Referrals start with hospital discharge planners and case managers, rehab centers and skilled nursing facilities, physicians' offices, home health and hospice agencies, senior-living communities, elder-law attorneys and churches — visit them with a one-page sheet and ask for one client. Public programs can be a door too: one new Ohio agency takes PASSPORT waiver clients through its local Area Agency on Aging (Richland Source, August 2025). Then a Google Business Profile and a website that says how you choose caregivers, because the family that gets your name will look you up before it calls.

The staffing side-line. Some agencies also place caregivers, nursing assistants and nurses with hospitals and care facilities — a healthcare staffing business, and in many states a separate registration. Pennsylvania registers temporary health care services agencies each year for $500, with proof of $500,000 in professional liability and workers' comp and a dishonesty bond of $10,000 per employee (Pennsylvania DOH); Minnesota registers supplemental nursing services agencies for $2,442 with a $10,000 bond (Minn. Stat. §144A.71); Florida licenses nurse registries, which refer nurses and aides to private homes as well as facilities (Fla. Stat. §400.506). In a staffing business the client is usually a facility, not a family, and the pay ladder runs from nursing assistants, at a $20.32 US median hour in 2025 (O*NET), to licensed practical nurses at $30.96 (O*NET) and registered nurses at $46.90 (O*NET). It is a second license and a second insurance policy, so check your state's rules before you add it.

What it costs to start. One franchisor's 2026 disclosure prices the pieces an agency needs whether or not it buys a franchise: $39,000 to $52,000 of working capital for the first three months — and a recommended $100,000 in working capital or a credit line — $3,100 to $6,800 for insurance, $360 to $600 for background screening and $2,000 to $3,500 for caregiver training (Comfort Keepers, 2026). Scheduling software with visit verification lists at $8 to $25 per caregiver a month (ShiftCare); a Texas LLC is $300 (Texas SOS), every California LLC pays an $800 annual tax (California FTB) and the EIN is free (IRS). Don't plan on a grant: the SBA "does not provide grants for starting and expanding a business" (SBA). Our free home care business plan itemizes every line — $63,620 to $133,503 for an independent agency in one state, mostly working capital — and the home care website templates show what a good agency site looks like. Zarla's home care website builder is how the family searching "home care near me" finds yours.

In the UK: domiciliary care and the CQC. In England, personal care for people who can't provide it for themselves, in the place where they live, is a regulated activity (the 2014 Regulations, Schedule 1), so a domiciliary care agency registers with the Care Quality Commission, and a company also needs a registered manager (the 2009 Registration Regulations, reg. 5). On CQC's fee page (last updated June 2024), the annual fee for community social care is £239 plus about £54 for each person you support (CQC) — check the current year's scheme. Care work qualifies for an enhanced DBS check (GOV.UK), and new care workers are inducted against the Care Certificate's 16 standards (Skills for Care). The Homecare Association put the minimum price for an hour of homecare in England at £32.14 for April 2025 to March 2026 (Homecare Association). Scotland (the Care Inspectorate), Wales (Care Inspectorate Wales) and Northern Ireland (RQIA) register care services separately.

In Australia: Support at Home and the NDIS. Support at Home replaced the Home Care Packages Program on 1 November 2025 (Department of Health, Disability and Ageing, August 2026), and under the Aged Care Act 2024 a provider registers with the Aged Care Quality and Safety Commission in categories — personal care at home is Category 4, which is audited against the strengthened Quality Standards (ACQSC). The government paused its planned price caps for Support at Home in May 2026 (health.gov.au, May 2026). For NDIS participants, registering for "Assistance with daily personal activities" needs a certification audit (NDIS Commission, July 2026), and workers in risk-assessed roles need an NDIS worker screening clearance (NDIS Commission).