Older adults who prefer to live in their home but need extra help with daily living often gravitate to home care. From assisting with day-to-day tasks like cooking and running errands, to helping with personal care like dressing and bathing, this type of care can relieve stress while providing safety and companionship.
But for some families, determining how to pay for home care is stressful itself. However, there are several little-known funding sources, including VA programs, reverse mortgages, and — for low-income seniors — Medicaid. Learn more about ways to finance in-home care.
Original Medicare doesn’t cover home care, or non-medical services by home care aides. It does, however, cover select home health care services. In short, home medical services prescribed by a doctor and carried out by a skilled medical professional are covered by Medicare. Home health is generally intended to provide short-term care for seniors choosing to recover at home versus a hospital.
Talk with a Senior Living Advisor
Our advisors help 300,000 families each year find the right senior care for their loved ones.
“Medicare covers medically necessary, in-home care, also called home health or skilled nursing,” says Kim Barnett, content manager at AgingCare.com. “It must be ordered by a doctor, and it is authorized only for short-term purposes.” Learn more about the differences between home care and home health.
However, Medicare Advantage, a type of health care plan offered by private companies, may cover non-medical or home care aides depending on the plan. In these cases, the home care agency must be part of Medicare’s network.
For low-income seniors, Medicaid may cover some home care services depending on your state. In response to a desire to reduce or delay institutional care for the aging population, almost every state now offers Medicaid eligibility for medical and non-medical in-home care, says Barnett. “However, as with all Medicaid-funded services, there are strict eligibility guidelines,” she says. “Each state determines its own programs and requirements.”
Medicaid’s home and community-based service waivers (HCBS waivers) program may be used to cover non-medical services such as help with activities of daily living (ADLs). Family caregivers may also receive payment through the Medicaid Cash and Counseling program. Contact your state Medicaid office for more information on programs, benefits, and eligibility.
The U.S. Department of Veterans Affairs (VA) offers programs to help pay for home care to assist veterans and their families. Qualifications and services covered are different for each program, so it’s best to speak with a social worker in the VA to determine which program is most beneficial or applicable to your situation.
Discover three possible VA programs to help offset home care costs.
If you require assistance with activities of daily living (ADLs), are housebound, and/or have extremely poor eyesight (5/200 in one or both eyes) you may qualify for the VA’s Aid and Attendance Benefits and Household Allowance.
This government program provides monthly payments — in addition to the VA pension — for qualified veterans and widowed spouses. Learn more about how Aid and Attendance pays for senior care.
Direct home care assistance for veterans and their spouses is available through Home Maker Home Health Aide Care. This program assists with grocery shopping, personal grooming, meal preparation, dressing, and more.
The first step is to speak with a VA social worker, says Robbin Stoddard, a Senior Living Advisor at A Place for Mom and former military pay analyst. “The social worker has to refer the family for the service. Then, they’re assigned to an additional person who comes to the home and determines the care and hours needed.”
“It’s similar to the assessment process for Medicaid programs,” she adds. All out-of-pocket costs are typically based on a sliding scale and the veteran’s needs. “In many areas, there may be a high demand, or the home care program may only be available to those with service-connected disabilities of 50% or more as they always have priority,” says Stoddard.
This program focuses on caregiver support for those with service-connected disability of 70% or more. It provides family members with a stipend for caregiving. Learn how to apply and determine your eligibility.
A reverse mortgage enables a home owner to take out a loan, which converts part of the home’s value into payments. The owner can then obtain funds in a lump sum or as needed to supplement income. This option enables seniors to stay at home while creating consistent cash for care by tapping into their home’s equity.
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).
Seniors interested in this type of reverse mortgage must meet certain requirements:
A few property requirements include:
Learn tips for shopping for reverse mortgages from the Federal Trade Commission.
Families often pay out-of-pocket for home care services through several means including:
Did you purchase a long-term care insurance policy? There’s a good chance — depending on your policy and coverage — you can receive funds through long-term care insurance for in-home care. Typically, benefits begin when you need help with at least two ADLs, such as bathing or dressing.
Sometimes, private health insurance pays benefits for home care services. Flexible spending accounts may also be used to pay for home care.
Understanding various funding sources for home care can be complex. Consider speaking to someone directly if you’re still unsure about how to cover home care costs.
Merritt Whitely is an editor at A Place for Mom. She developed health content for seniors at Hearing Charities of America and the National Hearing Aid Project. She’s also managed multiple print publications, blogs, and social media channels for seniors as the marketing manager at Sertoma, Inc.