When chronic health conditions, recovery from an illness, dementia, or even the normal aging process makes it difficult for a senior to live at home safely, in-home care can provide the supervision and assistance an older adult needs to age in place and carry on daily routines. When comparing care options, many families are concerned about how much home care services cost and what their financial options are for payment. Use this guide to determine a senior’s unique care needs and explore ways to pay for care at home.

The first step in determining how to pay for home care is clarifying the type of care an elder needs. Medically necessary home health care is likely to be covered by a combination of payment options, whereas non-medical home care provided by unskilled caregivers is typically paid for out of pocket. A comprehensive needs assessment is usually conducted to determine the type and amount of services a senior requires to meet their unique needs.

How Much Do Home Care Services Cost?

The second step in deciding if in-home care is the right fit for an aging loved one is to estimate costs. In-home care costs vary by location as well as by service level. Home health care that is provided by trained medical professionals like registered nurses and therapists is the most expensive level of care at home. According to the Genworth Cost of Care Survey 2019, the national median cost of home health care provided by a skilled clinician is $87.50 per visit. Visits from a home health aide cost significantly less at $23.00 per hour. The median hourly cost of non-medical home care, such as homemaker services and custodial care, is $22.50.

Medicare Coverage of In-Home Care

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities and people with end-stage renal disease.

In most cases, when ordered by a physician, Medicare Parts A and/or B will pay for medically necessary services provided in a home setting over the short term. A senior who requires only non-medical care (e.g. meal preparation, bathing assistance, housekeeping), will NOT qualify for Medicare coverage of these services.

Medicare-certified home health care agencies are companies contracted by Medicare to provide a host of covered home health services. Medicare only pays for services provided by an agency that meets its quality standards. A senior who is part of a Medicare Advantage Plan may have to use a certified home health care agency that participates in their plan’s network.

Using Traditional Health Insurance Plans to Pay for Home Care

Private health insurance plans may pay for select elder care services, but coverage varies from plan to plan. Most forms of private insurance will not pay for non-medical home care services, and in-home skilled care is rarely covered at 100 percent. Research prospective policies for the best coverage options.

Medigap Coverage of Home Care Services

Also known as Medicare Supplement Insurance, Medigap is additional policy coverage that works alongside Original Medicare benefits (Parts A and B). The supplemental policy is purchased from a private company to pay for the “gaps” in costs not covered by Medicare, such as copays and deductibles. Neither Medicare nor Medigap policies are designed to pay for long-term care, so their coverage for in-home services is typically limited to medically necessary care over the short term. If a senior does not meet Medicare’s requirements for home health care coverage, then a Medigap plan will not minimize out-of-pocket costs for these services.

Using Life Insurance to Pay for Home Care

Seniors who have life insurance policies have a few options in using them to pay for home care. Options for using your life insurance policy to fund home care include taking a loan from the policy’s cash value or surrendering the policy entirely in exchange for the cash value.

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