PHI Statement on the HHS Transformation Plan

Yesterday, the U.S. Department of Health and Human Services (HHS) announced a plan for a dramatic restructuring of the agency—one that raises concern for both the short-term and long-term viability of vital long-term services and supports.

Mandated by a presidential executive order focused on government efficiency, the U.S Department of Health and Human Services transformation plan enacts significant workforce and division reductions—short-sighted and sweeping changes that will effectively eliminate the jobs of at least 20,000 HHS employees (nearly 1 in 4 of the agency’s overall staff).

“Following several months of other disruptive federal actions, the planned restructuring of HHS risks destabilizing critical programs relied upon by millions of older adults and people with disabilities,” according to PHI’s President and CEO, Jodi M. Sturgeon. “These changes will only deepen the  challenges faced by  the direct care workers and family caregivers who provide essential care and support for so many Americans each day.”

PHI stands alongside other organizations, including National Alliance for Caregiving, Community Catalyst, Justice in Aging, Medicare Rights Center, and a growing list of others—in questioning this planned restructuring.

We have particular concern about the announced reorganization—and what would amount to the effective dissolution of— the Administration for Community Living (ACL). Since being established in 2012, ACL has served as a key focal point within the federal government for programs supporting older adults and people with disabilities, championing policies that promote independence, well-being, and access to community-based services.

ACL’s role since its inception has been to coordinate—and create efficiencies across—a wide range of programs that have impact in local communities. Given the Administration’s stated aims of “making [HHS] more responsive and efficient, while ensuring that Medicare, Medicaid, and other essential health services remain intact,” maintaining ACL in its current form should be a priority.

Instead, this restructuring plan would disperse ACL’s functions across multiple other agencies, raising profound questions about the future coordination, funding, visibility, and overall viability of programs fundamental to caregiving in our nation. We are deeply concerned that this fragmentation will negatively impact the quality and accessibility of long-term services and supports—including further destabilizing the direct care workforce.

PHI continues to analyze the details and consequences of this announcement, and we will offer additional perspective on it in the days ahead. At this moment: We urge HHS and the Administration to reconsider the effective dismantling of ACL. We also urge HHS to provide full transparency about the likely consequences of their planned restructuring, and to prioritize both continuity of care and the well-being of caregivers (including direct care workers and family caregivers) who support older adults and people with disabilities each day. These efforts can have far greater impact if they are done in collaboration, drawing on insights from PHI and other organizations who dedicate our missions to strengthening the nation’s health care systems and the overall care economy.

Identifying a focus on preserving Medicaid and Medicare, while taking steps that will likely diminish the effectiveness, efficiency, and overall impact of these programs, poses questions about the true impact this transformation will have on the health of Americans. Taken alongside active work to advance significant budgetary cuts to Medicaid—yesterday’s announcement raises sharp questions about the future of programs relied upon by millions of American families.

April 1, 2025 Update:

PHI is monitoring today’s mass layoffs at the federal Department of Health and Human Services (HHS) with deep concern about the direction of our nation’s healthcare systems. Following on last week’s announcement of a dramatic restructuring of the federal Department, these dismissals are impacting staff at the Centers of Medicare and Medicaid Services (CMS), the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), the Administration for Community Living (ACL), and other agencies.

Late last week, PHI joined multiple organizations expressing alarm about the Trump Administration’s restructuring plan—especially the effective dissolution of ACL, the sole federal agency focused on older adults, people with disabilities, and family caregivers. As these layoffs move forward, the consequences are immediate and severe—effectively deep cuts to the infrastructure that ensures direct care workers, caregivers, and communities receive the support they need.

We are especially concerned about the loss of teams that:

• Provide oversight for home and community-based services (HCBS) that allow millions of older Americans to age at home
• Collect and evaluate data on the direct care workforce, a sector of 5 million workers and a significant economic driver
• Implement caregiver support programs authorized by the Older Americans Act and Medicaid
• Ensure culturally competent and accessible public health communications and services

Without these federal anchors, millions of people will fall through the cracks. The direct care workforce—already facing low wages, high turnover, and inadequate training pipelines—cannot sustain further disinvestment. Neither can the older adults and people with disabilities they support.

At a moment when the demand for care is accelerating nationwide—we urge the Administration to immediately provide transparency on the scope and impact of these layoffs, and for lawmakers to halt the elimination of programs essential to public health, long-term care, and equity.

For press inquiries: please contact PHI’s Senior Director of Marketing and Communications, Murray Devine.