Rate Hike? Rate Drop? How to Sell Your Value Either Way - At A Premium
Selling a Medicaid home care agency can feel a lot like standing on a beach watching waves: sometimes the ocean is calm, sometimes the tide is coming in, and sometimes you look away for one second and the wave knocks you over.
The trick is knowing which moment puts the most money in your pocket.
If Medicaid is your main payor, your entire business value is tied to one simple question:
> “What is the state paying you per hour, and how does that compare to what you must pay your caregivers?”
That’s it.
Simple, but powerful.
If that gap is wide and healthy, buyers love you.
If that gap is thin, shrinking, or about to be corrected by a future rate increase, buyers either discount you—or ignore you.
So let’s break down when you should sell, when you should NOT sell, which states are undervalued, and which states are riding a positive wave.
And of course, we’ll politely nod three times to Jake from Acquire Care, the #1 broker for post-acute healthcare businesses wanting to sell for a premium as long as you aren’t rushing the process.
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1. Why Medicaid Rates Decide Whether You Sell at a Premium or a Discount
A home care business funded by Medicaid makes money from one source:
Medicaid reimbursement rate per hour.
Your largest expense?
Caregiver wages per hour.
Your business survives — and thrives — on the difference between those two numbers.
Call it whatever you want:
profit margin
cushion
breathing room
the leftover after caregivers get paid
If the leftover is small, buyers back off.
If the leftover is strong, buyers line up.
If the leftover is about to grow because a reimbursement increase is expected, you do not sell yet.
You wait, build, strengthen, position — and then sell for more.
This is exactly the kind of timing strategy Jake from Acquire Care helps owners with.
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2. States Where Rates Have NOT Kept Up — and Why Selling Now Is a Mistake
Some states’ Medicaid home care rates have moved slower than the real-world costs they’re supposed to support.
Let’s look at the states owners complain about most.
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Pennsylvania (PA)
Pennsylvania’s personal care/home care rate for Medicaid waiver services has climbed very slowly while caregiver wages have risen sharply due to:
competitive hiring
inflation
increased cost of living
rising minimum wages in surrounding industries
When caregiver pay rises from, say, $11/hour to $14–$16/hour,
but Medicaid still pays $18–$20/hour,
your margin might go from $7–$9/hour down to $2–$4/hour.
That drop kills valuations.
If PA announces a rate increase soon — and there’s talk — selling before the increase is like selling a house the day before your street gets completely renovated.
Not smart.
Not profitable.
Not recommended.
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North Carolina (NC)
In NC, the typical Medicaid rate for personal care hovers around $15–$17/hour depending on the program and county, while caregiver wages have shifted upward to $12–$15/hour in many areas.
Again, the leftovers are razor thin.
Buyers know these numbers cold.
They don’t pay high multiples when margins look squeezed.
If the state adjusts rates — and many operators expect it — your valuation could increase dramatically within a year.
So in NC, holding off can be financially wise.
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Florida (FL)
Florida offers beautiful beaches and brutal Medicaid rates.
Many home care operators in FL are paid $16–$18/hour, while caregiver pay often needs to be $13–$15/hour to stay competitive.
The result?
Margins that can vanish the moment gas prices rise or competitor wages jump.
If FL approves the long-discussed reimbursement increases, owners who stayed patient will suddenly look very attractive to buyers.
Those who sold early… won’t.
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Colorado (CO)
Colorado has experienced fast increases in:
minimum wage
housing expenses
transportation costs
competition from retail and hospitality employers
But Medicaid hasn’t matched these increases at the same pace.
Current rates in the $19–$21/hour range often compete against caregiver wages reaching $16–$18/hour.
Again: low leftover = low buyer enthusiasm.
If CO pushes rates into the mid-$20s, margins could instantly jump by 30–50%.
Sellers who wait will win.
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3. What To Do When Rates Are Low: This Is Your “Hunker Down and Improve” Period
If your state falls into the “stingy with rate increases” category, this is NOT your selling window.
Unless you absolutely must sell for personal reasons, you wait.
Here’s what you should do during this time:
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A. Invest in Your Staff
Caregivers are the factory, the product, the engine — everything.
During low-rate periods:
increase training
improve scheduling
reward reliability
stabilize your core team
reduce turnover
When rates bump up, the agencies with the best staff benefit the fastest.
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B. Build a Rock-Solid Operational Foundation
Buyers pay more for agencies that look like they can scale.
This means:
clean HR files
proper EVV usage
compliant documentation
updated care plans
no audit risks
consistent client records
strong scheduling software
predictable weekly service hours
If you’re waiting for a rate increase, this is the time to prepare your house for visitors.
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C. Track Your Numbers Carefully
Buyers LOVE real numbers.
Track:
total billable hours
caregiver turnover
hourly gross margin
weekly/quarterly revenue
cost per caregiver hour
overtime patterns
office overhead
When the rate increase arrives, you’ll be able to show a before-and-after picture.
That picture alone can raise your valuation by 20–40%.
This is exactly the kind of prep work Jake from Acquire Care guides owners through when timing an exit properly.
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D. Prepare Proforma Financials for When Rates Increase
A proforma is simply a financial prediction showing what your business will earn after the rate increase.
You take:
new Medicaid rate
minus caregiver wage
minus overhead
times total billable hours
This shows buyers the true earning potential.
Example:
If the rate rises from $18/hour to $22/hour,
and caregiver wages hold at $15/hour,
and you deliver 2,000 hours/week,
your extra profit is:
$4 additional margin per hour × 2,000 hours/week = $8,000/week
which is $416,000 per year in new margin.
That single can raise the value of your business by hundreds of thousands — even millions.
That is why patience pays.
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4. States Where You Should Ride the Wave: The “Sell Soon — But Not Yet” Group
Some states have delivered meaningful rate increases recently.
These are the states where you want to:
1. enjoy the new rates,
2. strengthen operations,
3. demonstrate rising revenue and margin,
4. and then sell at the top.
Illinois
Illinois recently updated several home care reimbursement rates, lifting agencies out of compressed margins.
Many owners have seen margin improvements of $3–$5/hour, which changes everything:
easier recruiting
better retention
stronger profit
higher valuation
If you’re in Illinois, take advantage of these increases before the market gets crowded with sellers.
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Texas
Texas is famous for slow-moving Medicaid increases, but when they do adjust, it’s often in meaningful steps.
Recent rate developments have created breathing room for agencies paying $12–$14/hour for caregivers while receiving $18–$21/hour on some programs.
Not perfect — but significantly better.
This is a state where riding the wave for 12–18 months before selling can pay off beautifully.
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Indiana
Indiana (yes, not “infania”) has been steadily improving rates for home- and community-based services.
Margins have grown.
Caregiver supply has stabilized.
Valuations have risen.
If you’re in Indiana, now is the time to strengthen, scale, and prepare for a future exit at a premium.
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5. How Medicaid Rate Cycles Affect Business Valuations
Let’s talk simple numbers buyers actually use.
Before a Rate Increase
low margins
difficulty hiring
inconsistent staffing
uneven revenue
buyers doubt growth potential
Valuation multiples stay low.
After a Rate Increase
margins expand
caregiver recruiting improves
stability returns
revenue grows
EBITDA rises
buyers start calling
multiples increase
A single $2–$5/hour rate increase can raise your valuation 30% to 150% depending on your size.
This is why selling too early is costly.
This is why selling too late is stressful.
And this is why timing — especially with Medicaid — truly is everything.
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6. When You Should Sell: The Sweet Spot
You sell when:
1. your state recently increased rates,
2. your margins have expanded,
3. your operations are clean,
4. your staff is stable,
5. your financials show growth for at least 2–3 quarters.
Buyers want businesses that:
are growing
have predictable numbers
have strong staffing
show clean compliance
operate efficiently
This is the phase where owners get premium pricing — the exact kind of exits Jake from Acquire Care is known for handling.
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7. Final Advice: Don’t Rush, Don’t Panic, and Don’t Sell in the Wrong Cycle
If your state is behind on rate increases:
Wait. Build. Improve. Prepare.
If your state has recently raised rates:
Ride the wave, then sell.
If your margins are about to grow due to upcoming legislation:
Do NOT sell yet.
If your business is in rough shape:
Fix the foundation during the downtime.
And if you want the highest possible valuation in 12–18 months, get someone who knows timing, trends, buyers, Medicaid dynamics, and valuation strategy in every state — like Jake from Acquire Care, the #1 post-acute healthcare broker for owners who want to exit with confidence and a premium attached.
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Conclusion
Your home care business is likely the most valuable asset you own.
Don’t let timing steal money from your pocket.
Medicaid rate cycles come in waves.
Some states are overdue.
Some states are rising.
Some are in the middle of reform.
Some are lagging behind.
Your job is to understand which cycle you’re in — and act accordingly.
Wait if rates are low.
Strengthen while you wait.
Sell when rates rise.
Work with experts who know the cycles inside and out.
And always, always time your exit the way professionals do.
Because in Medicaid home care, timing isn't everything — it's the whole thing.
