How to Start a Home Care Agency
in 2026

What Is a Home Care Agency?

A home care agency is a business that provides paid care services to individuals in their own homes, assisted living facilities, or other residential settings. The agency employs or contracts caregivers, coordinates scheduling, manages compliance, and bills clients or third-party payers for services rendered.

According to AARP, 90% of seniors prefer to age in place rather than move to a nursing facility. Agencies make that possible by bringing trained support directly to the client.

Types of Home Care Agencies

Non-Medical Home Care Agency

Provides assistance with daily living activities that do not require a clinical license. Services include personal care (bathing, dressing, grooming), companionship, meal preparation, light housekeeping, transportation, and medication reminders. This is the most common entry point for first-time founders.

Home Health Agency (Medical)

Provides skilled medical services in the home including nursing care, physical therapy, occupational therapy, speech therapy, wound care, and medication management. Can bill Medicare and Medicaid directly.

Hospice Agency

Provides end-of-life care for individuals with a terminal diagnosis. Must be Medicare-certified to receive reimbursement.

Private Duty Nursing Agency

Provides one-on-one skilled nursing care for medically complex clients. Typically funded through Medicaid waiver programs or private pay.

The 6 Universal Steps to Get Licensed in Any State

Home Care Licensing Requirements by State

Licensing requirements vary significantly by state. The table below summarizes the key details for all 50 states and Washington DC, including the regulatory body, license type, estimated application fee, estimated timeline, and whether a Certificate of Need is required. For state-specific details, visit TheBizofSeniorCare.com/find-your-state/.

Certificate of Need (CON) States

Nineteen states require a Certificate of Need (CON) before you can open a home care agency: Alabama, Arkansas, Connecticut, Delaware, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maine, Maryland, Mississippi, New Jersey, New York, North Carolina, South Carolina, Tennessee, Vermont, and Washington.

A CON is a government approval process that requires you to demonstrate that there is an unmet need for home care services in your target geographic area. The state reviews your application against existing service capacity, population data, and community need before granting permission to open. The purpose is to prevent market oversaturation and control healthcare spending, though critics argue the laws primarily protect existing providers from competition.

If your state requires a CON, you must obtain it before your license application can be approved. The CON process runs parallel to — but separate from — your licensure application, and in most states the CON must be granted before your license is issued.

If you are located in a CON state and looking for a faster path to launch, consider whether operating in a neighboring non-CON state is feasible, or work with an experienced consultant who understands how to build a compelling CON application. TBOSC has helped founders navigate CON processes across multiple states. Visit TheBizofSeniorCare.com/find-your-state/ to understand the exact CON requirements in your target state.

How Much Does It Cost to Start a Home Care Agency?

Startup costs vary depending on your state, agency type, and whether you pursue non-medical or medical home care. Below are typical cost ranges for both agency types. For a deeper breakdown, see our full guide on senior care business startup costs.

Non-Medical Home Care Agency: USD 40,000 to USD 80,000

Medical Home Health Agency: USD 75,000 to USD 150,000+ — Medical agencies carry higher costs due to clinical staffing requirements, Medicare certification expenses, accreditation fees, and more complex policies and procedures. See our complete guide to home care agency startup costs for a full breakdown.

Medicare vs Medicaid for Home Care Agencies

Medicare

Medicare covers skilled home health services for beneficiaries aged 65 and older who are homebound and require intermittent skilled nursing or therapy. To bill Medicare directly, your agency must achieve Medicare certification through the Centers for Medicare & Medicaid Services (CMS). The certification process requires a state survey, compliance with the Conditions of Participation, and enrollment through PECOS (Provider Enrollment, Chain and Ownership System). Medicare does not cover non-medical personal care services such as bathing, dressing, and companionship when provided alone, without skilled services.

Medicaid

Medicaid is administered by individual states and covers personal care services through Home and Community Based Services (HCBS) waiver programs. Many non-medical home care agencies are Medicaid providers. Enrollment requirements vary by state but typically require a separate provider application, background checks, and compliance agreements with the state Medicaid agency or managed care organizations. Medicaid enrollment typically takes 3 to 9 months after your state license is issued.

How The Biz of Senior Care Can Help

The Biz of Senior Care (TBOSC) is a national home care consulting firm that has helped hundreds of entrepreneurs get licensed and launch agencies across all 50 states. Whether you are starting from scratch or are already in process, our team provides expert guidance at every stage:

• State-specific licensing consulting — We know every state’s requirements, timelines, and common pitfalls
• Policies and procedures manuals — Custom-built to meet your state’s requirements (100–300+ pages)
• Business formation support — LLC/corporation setup, EIN, banking, and insurance guidance
• CON application strategy — For founders in certificate of need states
• Medicare certification preparation — Survey readiness, Conditions of Participation compliance, PECOS enrollment
• Medicaid enrollment guidance — State Medicaid and managed care organization enrollment support
• Staff recruitment frameworks — Caregiver hiring, background check processes, onboarding systems
• Client acquisition strategies — For more detail on how to get home care clients, visit our dedicated guide
• Ongoing compliance support — Survey prep, renewal management, regulatory updates

Frequently Asked Questions

How long does it take to start a home care agency?

The timeline varies by state. Non-CON states typically take 3 to 6 months from business formation to license issuance. CON states can take 12 to 24 months or longer. Texas averages 60 to 90 days. New York can take over 12 months.

Do I need to be a nurse to start a home care agency?

No. Most states do not require the owner to hold a clinical license. However you must designate a qualified Administrator of Record who meets your state’s requirements.

How much does a home care agency license cost?

State application fees range from USD 100 (many states) to USD 2,625 (Texas) to over USD 2,000 (New York). Total startup costs including all expenses range from USD 40,000 to USD 80,000 for non-medical agencies.

What states do not require a license for non-medical home care?

Iowa, Massachusetts, and Michigan do not require a state license for non-medical home care agencies, though local regulations may still apply.

What is a Certificate of Need and do I need one?

A CON is a government approval required in 19 states before you can open a home care agency. If your state requires a CON, you must obtain it before your license application can be approved.

Can a non-medical home care agency bill Medicaid?

Yes, in many states. Medicaid waiver programs cover personal care services. You must enroll as a Medicaid provider separately from your state license.

How do I find the licensing requirements for my specific state?

Visit TheBizofSeniorCare.com/find-your-state/ for a complete state-by-state directory with regulatory body names, license types, fees, and timelines.

What insurance does a home care agency need?

At minimum you need general liability, professional liability (E&O), and workers compensation insurance. Most states require proof of insurance as part of your license application.

How much can a home care agency owner make?

Non-medical home care agency owners typically earn USD 50,000 to USD 150,000 per year in the startup phase, scaling to USD 200,000+ as the agency grows. Revenue depends heavily on client volume, service rates, and payer mix.

Should I buy a franchise or start independently?

Franchises offer brand recognition and systems but charge royalties of 4 to 8% of revenue ongoing. Independent agencies keep all revenue but must build their own systems. The Biz of Senior Care helps independent founders build agency-quality systems without franchise fees.