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An In-Depth Guide to Paying for Home Care

An In-Depth Guide to Paying for Home Care

Home Care Has Many Services & Types

Before getting to how you're going to be paying for home care, you need to know what type of home care you are aiming for, or in need of.  Home care is a wide umbrella.  There is home care that targets general help for seniors, more medically-trained and skilled nursing staff for various demographics, hospice care for the dying, or palliative care for the chronically ill. But mostly, we are going to distinguish between nonmedical and medical home care, particularly for seniors.  


Non-medical Care:

  • There are growing numbers of agencies that tend to nonmedical needs.  This includes custodial, homemaker, personal care, and companion services.  
  • Custodial services are usually provided by certified nursing assistants (CNAs) and home health aides (HHAs).  But staff can also be non-certified nurse aides and caregivers.
  • Your ADL (activities of daily living) capacity is assessed to determine what types of staff you need and if you might qualify for Long Term Care insurance benefits.
  • ADL assessment looks specifically at whether you can do your own laundry, shopping, meal preparation, money management, typical housework, or take your own medications (usually it’s just a matter of remembering medications).
  • Non-medical care can be acquired either through full service non-medical agencies, registry or staffing agencies, or privately found freelancers.
  • The full service agencies will provide the full breadth of services and they manage the whole arrangement.  They are good if you want an agency to carefully screen and select staff, doing thorough background checks.  They typically manage payroll too and have to do everything to comply with employment laws.
  • Staffing agencies will typically just connect providers with clients, from a private duty registry, for a finder’s fee.  They can connect you with CNAs and rehab therapists and most of the needed staff positions.  They are less regulated however than full service agencies.
  • Or you can privately hire freelance CNAs, therapists, and caregivers.  Usually family members handle all the arrangements and pay the staff directly.


Medical Care

  • This type of care is typically acquired through home health agencies that are usually Medicare certified, meaning that the agency meets specific federal guidelines, allowing it to be insured by Medicare benefits.  This often means a strict adherence to physician-approved plans.
  • Some home health agencies might accept third party health insurances
  • The services involved here include medical and psychological services, wound care, pain management, medication management, oxygen services, medical equipment and supplies, physical therapy, home health aide care, and more.  
  • You might not need medical home care if you don’t have dire or severe health problems that need frequent intervention.
  • The home health care agency is typically liable for any issues with service.


Paying for Nonmedical Home Care

As you can see, financing nonmedical care is going to be a bit different than financing medical care, particularly because medical care is more involved with insurance and assistance programs like Medicare.


One Option Includes Long Term Care (LTC) Insurance  

  • This insurance is meant to cover the long-term care services for someone whose needs are not all medical, or for someone who is not traditionally “sick”.  It covers custodial and personal care services for example.
  • Policyholders will be reimbursed a daily amount for the services needed
  • There are a range of options and benefits
  • There is a maximum amount that a policy will pay
  • There is a maximum number of days or years that a policy will pay
  • It is good to sign up BEFORE receiving long term care services
  • The insurance can cover more than just home services--funds can be used toward hospice care, in assisted living facilities, and in nursing homes.
  • In the home it will cover skilled nursing care, rehabilitation therapy, and help with personal care or personal grooming (bathing etc).
  • The average age of people buying long-term care insurance today is about 60.
  • They may turn you down or discriminate based on some medical conditions like AIDS, dementia, or metastatic cancer
  • Companies that can sell LTC are regulated by the state
  • Contacting your state’s Department of Insurance is the best way to find insurance providers in your area
  • In 2007, the average LTC policy cost about $2.2k a year and had a daily benefit amount of $160.

Information provided by


Convert Your Assets

  • A liquid asset is known as cash on hand or an asset that can readily be converted to cash.
  • People often use home assets to pay for nonmedical care
  • This includes reverse mortgages or home equity lines of credit
  • Death benefit loans are loans taken from your life insurance policy, with low interest rates and no repayment schedules
  • A viatical settlement is “an arrangement whereby a person with a terminal illness sells their life insurance policy to a third party for less than its mature value, in order to benefit from the proceeds while alive.”
  • These also apply to medical home care



Check for Veteran’s Benefits

  • The Veteran Aid & Attendance Pension program is worth looking into
  • It can provide qualifying families and individuals with over $1,000 (but under $2,000) a month--amount depending on whether it is going to a veteran, surviving spouse, or couple.   


Medicaid (not Medicare) MIGHT pay if…

  • If the cost of your care is going to be less than if you were to be in a nursing home, Medicaid might happily work with you since they’d rather save money by keeping senior citizens out of nursing homes as much as possible.


Have some Savings or Pension

  • When it comes down to it, nonmedical home care is most often paid for by private savings or pensions accrued over the years.
  • This also applies to medical home care


Paying for Medical Home Care

Medicare is very Limited on Its Coverage

  • They will not cover custodial or non medical care, period.
  • They will cover individuals for medical care who are homebound and otherwise require assistance or medical equipment to leave their homes at all.
  • Person’s whose health can significantly deteriorate when leaving home also might qualify.


Medicaid Options  

  • This is for low income seniors
  • Can pay for nonmedical, as well as medical, and other in-home supports
  • They prefer to keep senior citizens living in their own homes as much as possible
  • Rules are state-specific
  • Here is a state-by-state guide


Non-Medicaid State Programs

  • These are sometimes known as "nursing home diversion programs"
  • These are for low income seniors who did qualify for Medicaid, for whatever reason.
  • Varies by state, and some states have more than one program
  • These programs might provide cash assistance but they can also provide the staff you need in some cases


Social Security

  • Many use their social security benefits to either fully or partially pay for their home care needs.
  • This could be applied to non medical care as well.  


Paying for Home Care; Costs

You’re probably wondering one of the most important questions: “how much does this all cost?”  Well cost varies by state as well.  The following table was provided by PayingForSeniorCare

State Home Care Hourly Rate

Home Care Affordability Index.

Lower #s are more affordable.

State Index Ranking
United States $20.00    0.79 n/a
Alabama $16.00    0.77 17
Alaska $26.00    0.74 11
Arizona $20.00    0.86 34
Arkansas $17.00    0.88 41
California $23.00    0.76 14
Colorado $22.50    0.79 22
Connecticut $20.00    0.61 4
Delaware $22.00    0.69 6
District of Columbia $16.00    0.61 5
Florida $18.50    0.81 25
Georgia $18.00    0.78 20
Hawaii $24.00    0.76 15
Idaho $20.00    0.88 40
Illinois $21.23    0.79 21
Indiana $19.50    0.82 26
Iowa $21.00    0.89 43
Kansas $18.00    0.78 18
Kentucky $20.00    0.92 47
Louisiana $15.25    0.72 9
Maine $22.00    0.96 49
Maryland $19.88    0.57 1
Massachusetts $24.85    0.74 10
Michigan $20.25    0.87 38
Minnesota $24.00    0.78 19
Mississippi $17.00    0.87 37
Missouri $18.62    0.84 32
Montana $23.00    1.04 51
Nebraska $23.00    0.87 39
Nevada $21.75    0.86 35
New Hampshire $24.00    0.71 8
New Jersey $21.00    0.59 3
New Mexico $20.75    0.91 45
New York $22.00    0.76 13
North Carolina $17.75    0.82 27
North Dakota $27.96    1.01 50
Ohio $19.50    0.83 29
Oklahoma $20.00    0.88 42
Oregon $23.00    0.94 48
Pennsylvania $21.50    0.80 24
Rhode Island $23.00    0.89 44
South Carolina $18.00    0.85 33
South Dakota $23.00    0.91 46
Tennessee $18.00    0.86 36
Texas $18.95    0.77 16
Utah $21.00    0.75 12
Vermont $22.00    0.80 23
Virginia $19.00    0.57 2
Washington $24.85    0.83 28
West Virginia $15.88       0.83 30
Wisconsin $22.50    0.83 31
Wyoming $26.00    0.71 7

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