Published September 2026
The I/DD market is estimated at $190 billion in 2025 and projected to reach $268 billion by 2030, a 7% CAGR, supported by non-discretionary demand and a dependable Medicaid funding base.
Growth is not without constraints. Labor capacity and state budgets set the pace, with 88% of providers reporting staffing shortages in ANCOR’s 2025 survey, and buyers are scrutinizing residential models more closely as states shift care toward community and in-home settings.
The underlying fundamentals remain durable:
- Defensive funding: More than 90% of provider revenue comes from public payors, and HCBS remains carved out of managed care in most states.
- Long-term, recurring need: Rising prevalence, an aging caregiver base, and long state waiting lists support demand well into the future.
- A shift to lower-cost models: HCBS averages roughly $17,000 per person annually versus $54,000 in an ICF, favoring integrated, community-based platforms.
- A premium on scale: Significant variability in margin across states and programs, rewarding operators with geographic and service diversification
Deal activity reflects this momentum. The I/DD sector recorded 28 transactions in 2025, up 47% year over year, and 12 more have closed so far in 2026. Valuations have become increasingly differentiated, with scaled platforms commanding a meaningful premium over smaller add-ons. Premiums increasingly hinge on four factors: demonstrable organic growth, DSP retention, service model mix, and geographic diversification.
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