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How Do I Pay for In-Home Care?

One question that is asked by many caretakers with elderly parents or other family members living alone is “How do we pay for care?”

If your parent or family member feels strongly about staying in their homes and aging in place, then in-home care may be an option, but it will not be cheap. The exact dollar amount of the cost depends on where your loved one lives, and the type and quality of care he or she receives. Typically, the costs of in-home care in urban areas are higher than in rural areas and still higher on the east and west coasts than in the central United States.

Some studies show that the average hourly rates for home health aides range from $16 to $29 throughout the country, while rates for homemaker aides without medical training range from $13 to $24. Unfortunately these rates are increasing with the cost of living and market demand. In addition to the actual costs of the home health aides, there are miscellaneous costs associated with in-home care as well.

When faced with these expenses, it is important to realize that there are options to help ease the financial burdens. Here are some options to help pay for in-home care:

  • Long-Term Care Insurance – Although many long-term care insurance policies only cover nursing home care, some long-term care insurance policies may pay for in-home care. It is important to review the long-term care insurance policy carefully to determine if your loved one’s policy provides for in-home care. Depending on the terms of the policy, your loved-one may be able to designate a certain dollar amount per day for home care to be spent on the type of aide you choose.
  • Life Insurance – Your loved one may access funds from a life insurance policy that is no longer needed to provide for others by using accelerated or living benefits. There may be restrictions that apply with this option. It is important to discuss this option with a qualified professional.
  • Annuities – Many annuities allow retirement savings or a pension to turn into a steady, guaranteed income stream that pays out until death or for a set number of years. This income stream can be used to pay for in-home care. Since there are many different types of annuities available, it is important to speak with a qualified professional when considering this option.
  • Reverse Mortgage – Seniors can use the value of the equity in their home to get cash now, either all at once or in monthly payments. These funds can be used to help your loved one stay in their home until he or she dies. There are many advantages and disadvantages to a Reverse Mortgage. It is important to discuss this option with a qualified professional.
  • Veterans BenefitsVeterans who either personally need help with the activities of daily living, or whose spouses need such help, may be entitled to monthly disability payments known as “aid and attendance” by the Department of Veterans Affairs.
  • Medicare – Medicare coverage is most commonly used with in-home care when your loved one is being discharged from the hospital or a rehabilitation facility. This type of coverage is difficult to get for extended in-home care, and is strictly limited.
  • Medicaid – Individuals who have low income and/or limited financial resources may qualify for Medicaid-covered in-home care. Although each state has different Medicaid rules, all programs cover short-term in-home care for acute conditions.

By Eric J. Einhart – Guest Blogger

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