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Ways to Pay for Home Care
Uncovering the Various Ways to Pay for Home Care Costs

Understand the Pay Options

Know how to pay for home care

Home care offers the elderly, seniors, people with disabilities, and family members the trained assistance to help with personal and medical care. But it limits specific tasks. Whether you hire a home health aide through an agency or privately, understand each person's role. Know what each person can and cannot do.

When Medicare, Medicaid, or private insurance pays for home care services, they pay part of the responsibility, not the entire bill. Caveat: Medicare and supplemental insurance plans cover personal care only if a consumer is receiving skilled care. They do not include personal care alone.

Compared to a nursing home or an assisted living facility, home health, and home care services are a bargain, depending upon what's needed.

Consumers use different ways to pay for home health care services, including out-of-pocket, health insurance policies, long-term care policies, Medicare, and Medicaid. Some low-income families get help from volunteer programs.

How to Pay for Home Care

Ways to Pay for Care
Ways to Pay for Care

Paying for home care is challenging for families because most elders and adult children pay out-of-pocket. It's an abrasive reality for working families, yet home care is the only way to keep an older loved one out of a nursing home.

Private Out-of-Pocket

Those who pay out-of-pocket for home care, compare fees of several different agencies. You will face difficult choices between quality and affordability.

Long-Term Care Insurance

LTC is a privately paid insurance plan that covers long-term care needs like personal care. Most LTC policies pay segments of assisted living or nursing home care. Some pay for services in the community, such as home care and adult day services. Care's limited, based on the plan.

Depending on your long-term care insurance policy, you may have a waiting period before accessing funds. Review the policy for details to learn when benefits kick in for collecting. Usually, it's anywhere from 30 to 120 days. It is important to ask these questions and get advice from your broker when deciding which policy is best for you.

Plan to buy long-term care policy early to secure an affordable rate. Also, if you have a long-term care policy, use it. Don't put off the necessary care you need. Start using the benefits. Some save the profits for a time they need them most, but intervening with home care earlier in a disease or aging process helps prolong one's ability to stay at home longer.

Medical Health Insurance

Most forms of private insurance do not pay for custodial or personal care services. In general, health insurance covers only very limited, and particular types of long-term help and disability policies don't include any at all.Private health insurance plans and HMO's follow the same rules set by Medicare. If they do cover long-term care services, it's only for skilled, short-term, medically necessary care.

Medicaid and Medicare

Both federal government programs have specific eligibility requirements and limitations on the types of services covered. They can, however, be an excellent source of support if you qualify.

Medicare pays skilled nursing stay that follows a recent hospitalization for the same or related condition and limited to 100 days. Coverage of home care set limits to medically necessary skilled care only.

Medigap insurance does not pay for long-term care. It provides no coverage for most of long-term care expenses like care in a nursing home, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Cash and Counseling Programs

These programs based on a "consumer-directed care" model. They give an older adult a cash allowance for home care needs. The money applies to hiring a relative or friend who gives personal and household care, buys assistive devices, and pay for home modifications. Learn more at the Eldercare Locator, a public service of the U.S. Administration on Aging connecting you to services for older adults and their families. Call 1-800-677-1116.

Veterans Administration

Veterans who are at least 50% disabled due to a service-related condition are eligible for home health care coverage provided by the Veterans Administration (VA). A physician must authorize the services delivered by the VA's network of hospital-based home care units. The VA does not cover non-medical services provided by home health care agencies.

Medically needed home care services are available to eligible active-duty or retired veterans and their spouses, widows, and dependents through the CHAMPVA program. Call 877-222-8387 toll-free to determine eligibility for these services. Find More at CHAMPVA and TRICARE.

Older Americans Act

The Older Americans Act provides federal funds for state and local social service programs that enable frail and disabled older individuals to remain independent in their communities. This funding covers home health care, personal care, chore, escort, meal delivery, and shopping services for individuals with significant need who are 60 years of age and older. Persons who have the resources to pay for some of these services contribute to some of the fees out-of-pocket. The Area Agency on Aging can provide information on such funding opportunities.

Disability insurance

Disability insurance replaces some of a working person's income when a disability prevents them from working. It does not cover medical care or long-term care services.

Social Services Block Grant Programs

States receive annual funding in the form of federal social services block grants for state-identified service needs. The funding is based state's population. Some of the funds pay for programs like home health care services and homemaker services. State health departments and local offices on aging are useful resources for additional information on these programs.

Community Organizations

In some communities, local non-profit organizations, provide financial support for home health and supportive care. Typically dependent on an individual's eligibility and financial circumstances, the organizations pay for a portion or even all of the services needed. Hospital discharge planners, social workers, local offices on aging, and the United Way are all excellent resources for more information.

Local Area Agencies on Aging

In some cases, local area agencies fund personal care services and case management, depending on the individual's financial circumstances. Learn more by visiting you State AAA.

Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.