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Ways to Pay for Home Care Costs

Understand How to Pay for Home Care

Receiving home care can provide trained assistance for personal and medical needs to elderly individuals, seniors, those with disabilities, and family members. However, it’s important to note that there may be limitations on specific tasks. Whether you hire a home health aide through an agency or privately, it’s crucial to understand each person’s designated role and what they can do.

When it comes to receiving home care services, Medicare, Medicaid, or private insurance will only cover a portion of the expenses, not the entire bill. It’s important to note that Medicare and supplemental insurance plans will only cover personal care if received alongside skilled care, not as a standalone service. However, compared to the costs of nursing homes or assisted living facilities, home health, and home care services can be a more cost-effective option depending on the specific needs of the individual. 

There are various ways in which consumers can pay for home health care services, such as out-of-pocket, through health insurance policies, long-term care policies, Medicare, and Medicaid. Additionally, some low-income families may be eligible for assistance through volunteer programs.

How to Pay for Home Care

For families, paying for home care can be a challenging task. This is because most elderly parents and adult children must bear the cost. Although it’s a harsh reality for working families, home care is the only option to keep an older loved one out of a nursing home.

Private Pay Out-of-Pocket

Individuals who pay for home care expenses themselves often compare the fees of various agencies. This can present challenging decisions as they balance the factors of quality and affordability.

Long-Term Care Insurance

Long-term care (LTC) is a form of privately paid insurance that provides coverage for personal care needs. Typically, LTC policies provide specific coverage for assisted living or nursing home care, with some plans also covering community services like home care and adult day services. However, the level of care provided is limited based on the policy’s terms and conditions.

Before accessing your long-term care insurance benefits, you may have to wait for a specific period, depending on your policy. It’s essential to review your policy details to learn when your benefits will become available. This period can be anywhere from 30 to 120 days. If you’re unsure, it’s best to ask your broker for advice to ensure you choose the right policy for your needs.

To secure an affordable rate, purchasing a long-term care policy early is advisable. If you have a policy, don’t hesitate to use it. Delaying necessary care could cause more harm and even lead to a worsened condition. Using your benefits earlier can help prolong your ability to stay at home. Some people save their benefits for when they need them most, but it’s better to invest in home care earlier in the aging process or disease to promote a better quality of life.

Medical Health Insurance

Typically, private insurance plans do not cover the cost of custodial or personal care services. Health insurance usually only covers a limited range of long-term benefits, and disability policies may not include any coverage. Private health insurance plans and HMOs adhere to Medicare guidelines, which means they may only cover short-term, medically necessary care that requires specialized skills. Long-term care services are generally not covered by these types of insurance plans.

Medicaid and Medicare

Specific eligibility requirements and limitations exist on the services covered by federal government programs. However, if you qualify, they can be an excellent source of support. Medicare covers a skilled nursing stay that follows a recent hospitalization for the same or related condition, but it is limited to 100 days. Home care coverage is restricted to medically necessary skilled care only.

It’s important to note that Medigap insurance doesn’t cover long-term care expenses. This means that costs for services like nursing home care, dental or vision care, hearing aids, eyeglasses, or private nursing care won’t be covered by Medigap insurance.

Cash and Counseling Programs

These programs operate on a “consumer-directed care” model that aims to assist older adults in meeting their home care needs. The program provides them with a cash allowance that can be used to hire a personal caregiver or a friend who can provide household care, purchase assistive devices, and cover the cost of home modifications. If you wish to learn more about these programs, you can visit the Eldercare Locator, a public service offered by the U.S. Administration on Aging that connects older adults and their families to various services. For inquiries, you can call 1-800-677-1116.

Veterans Administration

If you are a veteran with a service-related condition that has caused at least 50% disability, you may be eligible for home healthcare coverage from the Veterans Administration (VA). However, this coverage is only for medically necessary services authorized by a physician through the VA’s network of hospital-based home care units. It’s important to note that non-medical services provided by home health care agencies are not covered by the VA. Additionally, the CHAMPVA program offers eligible active-duty or retired veterans, as well as their spouses, widows, and dependents, access to medically necessary home care services.

Older Americans Act

The Older Americans Act offers federal funding to state and local social service programs. These programs help older individuals who are frail or disabled to maintain their independence in their communities. The funding covers various services such as home health care, personal care, chore, escort, meal delivery, and shopping for those who are 60 years old and above and have significant needs. Individuals who can afford to pay for some of these services contribute to some of the fees out-of-pocket. The Area Agency on Aging can provide more information on these funding opportunities.

Disability insurance

If a person is unable to work due to a disability, disability insurance can replace a portion of their income. However, it’s important to note that disability insurance does not cover medical or long-term care services.

Social Services Block Grant Programs

Each state receives yearly funding through federal social services block grants to cater for their identified service needs. The amount of funding allocated to each state is dependent on its population. These funds are responsible for financing crucial programs like homemaker services and home health care services. If you need more information about these programs, state health departments and local offices on aging are reliable sources to consult.

Community Organizations Pay for Home Care

Certain communities offer financial aid for home health and supportive care through local non-profit organizations. The amount of aid given depends on an individual’s eligibility and financial situation, with some organizations covering all necessary services. For more information, individuals may consult with hospital discharge planners, social workers, local offices on aging, or the United Way.

Local Area Agencies on Aging

Depending on their financial situation, individuals may be eligible for personal care services and case management funding from local area agencies. To learn more, please visit your local agency.