Over the years, many families have chosen home care to support elderly loved ones. This arrangement allows seniors to maintain a level of independence and age comfortably where they live. In 2024, 92% of adult Americans reported they would prefer to age in place. Home care can also be a more cost-efficient option than a nursing home.
Explore ways to pay for in-home care, learn about insurance and government assistance programs and plan for long-term care with Village Caregiving.
Planning for Home Care and Its Costs
Financial planning is crucial in preparing long-term care for older adults. It allows you to set a realistic budget while identifying home care that suits your needs. To prepare, take the time to review your budget and gather financial assistance.
How Much Is In-Home Care Service?
In 2024, the median hourly rate for home health aide service was $33.99 in the United States. This amounts to $6,481 a month and $77,769 a year. However, these prices will fluctuate depending on your needs and where you live.
- Level of assistance: Some individuals require more help with daily activities and need specific medical assistance.
- Type of care: Costs vary between home care, assisted living and nursing homes.
- Hours and frequency of service: Requiring more hours means higher care expenses.
Survey your options and assess the level of care your loved one needs. Do they have mobility issues and specific medical conditions? If you need a more customized arrangement, home care is a flexible option for your older adult loved ones. Consider this when you create a budget for home care services.
If you need customized care at home, you can find providers with personalized care plans that address your needs. Other ways to maximize your budget for home care include looking for family caregivers who offer flat rates, even on weekends or holidays.
Ways to Pay for In-Home Care With Private Payment Options
Many families and seniors pay for home care using their personal savings. They may pool together funds or use insurance. In other cases, a senior family member may borrow against their home equity through a reverse mortgage.
Here’s how to use private funding to pay for home care:
Long-Term Care Insurance
Long-term care insurance is purchased in advance to cover retirement care expenses for your elderly loved one. Some long-term care insurance can cover care payments for two to five years, while other policies may cover a person for the rest of their life.
Life Insurance Policy
Your loved one can surrender their life insurance in exchange for its cash value. Once they receive the lump sum, they can use this to pay for home care services. Seniors who surrender their life insurance also surrender the death benefit that comes with it.
If you do not want to surrender your life insurance, you can access cash from your policy by:
- Withdrawing cash: Making a withdrawal reduces the death benefit.
- Taking out a loan: You can borrow money from your policy and pay it back with interest or reduce your death benefit.
Home Equity From a Reverse Mortgage
A reverse mortgage allows senior homeowners aged 62 and above to borrow from their property’s home equity. This is possible through the federal government’s Home Equity Conversion Mortgage (HECM). Seniors can use this loan to supplement their retirement plan and pay for home care services.
There are risks to this type of loan, so before taking out a reverse mortgage, ask these questions:
- How much will your family owe? The Federal Trade Commission (FTC) recommends taking a reverse mortgage with a non-recourse clause. This ensures that you will not owe more than the property’s value when the loan is due.
- Can you afford the requirements? The lender might foreclose your reverse mortgage if you cannot meet obligations. You must keep your home in good condition, pay homeowner’s insurance and property taxes and live in your home as your primary residence.
If you have reservations about reverse mortgages, consider other financing options.
How to Pay for Home Care With Government Assistance
Older adults might be eligible for government assistance with home care. They may qualify for Medicaid, Medicare and Department of Veterans Affairs (VA) benefits. Consider these options to pay for in-home care.
Understanding Medicaid Home Care Financial Assistance
Medicaid provides financial coverage for low-income seniors seeking home care. Your loved one may qualify and receive assistance through your state’s Home and Community Based Services (HCBS) Medicaid Waiver program.
How do you qualify for Medicaid? While each state has its rules, Medicaid eligibility generally depends on a person’s health, income and age. Let’s go over these qualifications:
- Health condition: A person with dementia, Alzheimer’s or any condition that keeps them from doing daily tasks and makes them unable to take care of themselves.
- Income status: Older adults can qualify if their monthly income is 100% of the Supplemental Security Income (SSI). In 2024, they are eligible if their income wage is no higher than $1,971 a month or no higher than $963 a month if they receive income not from wages.
- Age: Individuals can qualify if they are 65 years or older.
Check the Medicaid state directory for your state’s requirements. You can apply by enrolling online or contacting your state’s Medicaid center.
What about Medicare Assistance for home care? Medicare is applicable for temporary home health care assistance. This means it covers home care for loved ones who are ill or injured. This option helps pay professionals like nurses and physical therapists who can provide their treatment at home.
Pay for Home Care With Veterans Programs
Is your loved one a veteran? If so, they may be eligible for home-based VA program benefits. The VA can assign a trained homemaker and home health aide to assist them. Veterans are eligible based on their military service record, assigned priority group, disability and income. Depending on their benefits, copays may also apply.
Who is qualified for VA home care assistance? A veteran should satisfy the following requirements:
- Has served in the military and did not receive a dishonorable discharge
- Is enrolled in the VA health care program
- Lives in a location where the program is available
- Is qualified for VA community care services, which means their VA facility lacks the medical care they need
- Has doctor’s permission to receive in-home care services
You can learn more about VA assistance and how to apply through the VA Caregiver Support Coordinator.
Contact Village Caregiving to Learn More
Planning for long-term home care involves carefully assessing your elderly loved one’s needs. Check your funds and financing options to create a budget for in-home care services.
When it comes to home care, contact Village Caregiving in your area for fully customizable services. We offer affordable in-home care services at competitive rates with flexible scheduling payment plans. Our experienced family caregivers are here to provide the support you need, just like you’re part of our family.
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