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How to Pay for Home Care

8 minute readLast updated January 3, 2024
fact checkedon January 3, 2024
Written by Merritt Whitley, senior living writer and editor
Reviewed by Denise Lettau, J.D., wealth management specialistAttorney Denise Lettau has over 15 years of experience in the wealth management industry.
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Older adults who prefer to live in their own homes for as long as possible often gravitate toward in-home care for companionship or personal care, such as assistance with daily activities. Most families pay for home care services out of pocket, but there are several other ways to cover these expenses. Some seniors may qualify for public assistance programs like Medicaid, while veterans may qualify for VA benefits to help cover in-home care costs. By exploring different ways to pay for home care, you can support your senior loved one’s wishes to age at home safely and gracefully.

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Private pay

The majority of families pay for home care services using personal funds.[01] This may include a variety of sources provided by seniors and their family members.

The most common personal funds include:

  • Retirement income, such as money from a 401(k) plan or pension
  • Personal savings
  • Stock income
  • Proceeds from selling a home or personal items

Long-term care insurance

Long-term care insurance is an insurance policy purchased in advance to help pay for future care at home or in senior living settings. Policies vary, but typically seniors can become eligible for benefits once they’re no longer able to perform two activities of daily living (ADLs) independently.

Long-term care insurance may cover the following care types, depending on the plan purchased:

  • Adult day care
  • Home care
  • Home health care provided by a medical professional
  • Respite care
  • Hospice care

Let our care assessment guide you

Our free tool provides options, advice, and next steps based on your unique situation.


For low-income seniors, Medicaid may cover some home care services depending on where they live. Many states offer Medicaid programs that cover some medical and nonmedical in-home care services for eligible seniors.

For example, some states have a home- and community-based services waiver program that covers specific nonmedical services in a senior’s home, such as help with activities of daily living.[02] Medicaid may also pay family caregivers to care for their loved one at home in some states. Contact your state Medicaid office for more information on specific programs, benefits, and eligibility requirements.


Medicare doesn’t cover long-term home care services. However, for seniors recovering from an illness or injury, Medicare will cover short-term home health care prescribed by a doctor. These skilled services are provided by medical professionals like registered nurses or physical and occupational therapists. Home health care is generally intended to provide temporary care for seniors who choose to recover at home instead of a hospital or skilled nursing facility.

Medicare will cover some nonmedical home care services, but only if a patient is receiving medical services and requires help with activities of daily living as part of a doctor’s care plan. Nonmedical services might include assistance with:[03]

  • Bathing
  • Dressing
  • Using the restroom

Some Medicare Advantage policies may include additional coverage for nonmedical home care services. Medicare Advantage plans are a type of Medicare-approved health care plan offered through private insurance companies.

VA programs

The U.S. Department of Veterans Affairs (VA) offers several programs to help veterans and their surviving spouses pay for home care.

Examples of VA Home and Community Based Services programs that may pay for in-home care include the following:

  • Homemaker and Home Health Aide program
  • Veteran-Directed Care program
  • Home Based Primary Care (HBPC) program
  • Respite Care program

Because the qualifications and services covered are different for each program, families should speak with a VA social worker who can help determine which program fits their situation best.

To qualify for VA home care programs, veterans must meet the following basic requirements:

  • Be enrolled in VA health care
  • Meet the clinical criteria for a program
  • Be eligible for community care
  • Live in an area where the program is available

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Reverse mortgages

reverse mortgage enables a homeowner to take out a loan on their home’s equity. These funds can be used however the homeowner sees fit, including to help pay for care, health expenses, and even home modifications.

The only federally insured form of a reverse mortgage is called a Home Equity Conversion Mortgage (HECM). These mortgages are backed by the U.S. Department of Housing and Urban Development (HUD) and require seniors to meet the following basic requirements:

  • Be 62 or older
  • Own the property outright, or pay down a considerable amount
  • Not be delinquent on any federal debt
  • Occupy the property as a principal resident

A reverse mortgage can help a senior leverage the value of their home to pay for home care. However, before you make any decisions, you should seek professional financial or legal advice.

Professional services and guidance

Understanding various funding sources for home care can feel overwhelming. Consider speaking to one of these professionals directly if you’re still unsure about how to cover home care costs:

  • Elder law attorney. Many lawyers have experience in financial planning for long-term care, taxes, Medicare, Medicaid, and other legal circumstances that commonly affect seniors. The National Academy of Elder Law Attorneys offers a “Find a Lawyer” tool that can help you locate attorneys in your state.
  • Accountant. If you’d like assistance evaluating your family’s financial situation and exploring additional ways to pay, consider speaking to an experienced accountant.
  • Certified financial advisor. An advisor can assist with almost every aspect of your life related to finances. The National Institute of Personal Financial Advisors can help you find financial firms and advisors. Find personalized assistance online by using their national financial advisor search tool.

Help for families seeking in-home care

Hiring a home care aide or finding the right home care agency can be a complicated process. However, Senior Living Advisors at A Place for Mom can offer guidance on your loved one’s needs and help you explore ways to pay for in-home care. They can also help you determine your priorities, discuss your budget, and connect you with local home care agencies — all at no cost to your family.


  1. Home Care Pulse. (2022). HCP benchmarking report.

  2. Centers for Medicare and Medicaid Services. Home and community based services authorities.

  3. Centers for Medicare and Medicaid Services. Home health services.

Meet the Author
Merritt Whitley, senior living writer and editor

Merritt Whitley writes and edits content for A Place for Mom, specializing in senior health, memory care, and lifestyle articles. With eight years of experience writing for senior audiences, Merritt has managed multiple print publications, social media channels, and blogs. She holds a bachelor’s degree in journalism from Eastern Illinois University.

Edited by

Danny Szlauderbach

Reviewed by

Denise Lettau, J.D., wealth management specialist

The information contained on this page is for informational purposes only and is not intended to constitute medical, legal or financial advice or create a professional relationship between A Place for Mom and the reader. Always seek the advice of your health care provider, attorney or financial advisor with respect to any particular matter, and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not endorse the contents of the third-party sites.

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