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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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:
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:
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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]
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.
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:
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:
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A 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:
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.
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:
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.
Home Care Pulse. (2022). HCP benchmarking report.
Centers for Medicare and Medicaid Services. Home and community based services authorities.
Centers for Medicare and Medicaid Services. Home health services.
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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