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What Is Private Pay Home Care?

4 minute readLast updated June 12, 2023
Written by Rebecca Schier-Akamelu, assisted living writer
Reviewed by Todd Austin, home care expertTodd Austin, an Aging Media "40 under 40" winner and home care expert, heads Home Care Pulse, a leading home care agency software solution.
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Private pay home care is nonmedical home care that’s paid for using personal savings or other assets. You may also see it referred to as “paying out-of-pocket” or “private duty care.” You’ll find that most home care agencies and independent caregivers expect to be paid this way. That might be a surprise for many families who were hoping these costs would be covered through Medicare or other insurance. Fortunately, your loved one may have access to assets other than their savings that can help cover this cost.

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Key Takeaways

  1. Private pay home care is using savings to pay for home care. It’s the most common payment option for home care. 
  2. You can use a range of assets to pay for home care. Options include retirement funds, savings, annuities, life insurance policies, and more. 
  3. Medicare and other insurance likely won’t cover nonmedical home care services. Home health services, on the other hand, are usually covered to some extent. 
  4. Sometimes seniors can take advantage of public programs to help pay for home care. These options include Medicaid waivers and veterans benefits.

How to pay for home care privately

If you’ve decided to hire an in-home caregiver for your loved one, you’ll likely be paying out of pocket. Depending on how your loved one has planned or saved, they may be able to use multiple assets to help pay for home care.

It’s important to take a thorough look at your loved one’s assets, as roughly 63% of home care services are paid for privately.[01]

Can you afford home care?

Let our free assessment guide you to the best senior living options, tailored to your budget.

Consider the following private pay options when exploring how to cover home care costs:

  • Annuities. These can be purchased from banks, mutual fund companies, and brokerage firms and funded through savings. After you purchase, the institution will issue payments to your loved one. As with any financial investment, be sure to work with a trusted company or advisor.
  • Reverse mortgages. If your loved one owns a home, they can use a reverse mortgage to pay for long-term care at home. Scammers often target seniors in this area, so only work with a reputable institution.
  • Long-term care insurance. Seniors who have an active long-term care insurance policy can use it to fund in-home care. Policyholders will be reimbursed for the cost of assistance with activities of daily living, such as bathing and dressing.[02]
  • Life insurance. Many people purchase life insurance for the death benefit loved ones will receive. However, you can also convert part or all of the policy to fund home care expenses.
  • Collective sibling agreements. Sometimes children help pay for a parent’s care with the understanding that they’ll be reimbursed from their parent’s estate. It’s helpful to put this agreement in writing and share it with the executor of the will.

What other payment options are available for home care?

Even though the majority of home care services are paid for privately, many seniors opt to use public programs to get additional funding, adopting a mix-and-match approach with multiple payment sources.

Home care can be expensive, and it’s natural to wonder if there are other avenues available to help fund a loved one’s care. Medicare and other insurance will pay for some home health services. Home health involves medical services and therefore is different from home care, which provides nonmedical support such as assistance with bathing or eating.

You may want to look into the following options:

  • Medicaid and Home and Community Based Services (HCBS) waivers. Seniors who already qualify for Medicaid can apply for HCBS waiver in their state. These waivers can help seniors receive care at home instead of an institutionalized setting.[03]
  • Veterans benefits. There are several VA home care programs to consider. However, the services available vary, and you may be charged a copay.[04]
  • PACE. The Program of All-Inclusive Care for the Elderly is offered through Medicare and Medicaid. Seniors can receive home care through PACE if they qualify for the program and live in a PACE service area.[05]

Expert advice for affordable home care

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Next steps for private pay home care

Figuring out how you’ll pay for home care is only one part of your home care decision. Once you’ve assessed your financial situation and are ready to address your loved one’s care needs, you’ll need to choose whether you want to work with a private caregiver or a home care agency.

If you need assistance during this important journey, A Place for Mom’s Senior Living Advisors are here to help. At no cost to your family, they’ll help you find the right fit for your loved one by providing home care options that work with your budget and needs.


  1. Janus, A. L. & Ermisch, J. (2015, July 31). Who pays for home care? A study of nationally representative data on disabled older Americans. BMC Health Services Research.

  2. Administration for Community Living. Administration on Aging. (2020, February 18). What is Long-term Care Insurance? LongTermCare.gov.

  3. Centers for Medicare & Medicaid Services. Home & Community Based Services. Medicaid.gov.

  4. U.S. Department of Veterans Affairs. (2022, September 20). Homemaker and home health aide care. VA.gov.

  5. Medicare. PACE.

Meet the Author
Rebecca Schier-Akamelu, assisted living writer

Rebecca Schier-Akamelu is a senior copywriter at A Place for Mom, specializing in topics such as assisted living and payment options. With more than a decade of experience as a content creator, Rebecca brings a person-centered approach to her work and holds a certificate in digital media and marketing from Duke University.

Edited by

Leah Hallstrom

Reviewed by

Todd Austin, home care expert

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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