How To Pay For In-Home Care

Updated June 6, 2020

Although the cost for in-home care is usually a less expensive option than Assisted Living or Nursing Homes, the ability to afford Home Care is an important consideration.  Most in-home care services are private pay, which means you will pay out-of-pocket.  Many people believe that Medicare will pay for in-home care but this is not the case.  However, there are sources of funding that can help pay for the cost of home care.

Here are some different options that may be available to you to help you pay for in-home care.

The primary options to fund the cost of non-medical, long-term care are:

  • Personal funds
  • Long-term Care Insurance
  • Reverse Mortgage
  • VA Aid & Attendance Benefitsmoney money money
  • Respite Grants
  • Life Settlement

Personal Funds

This may be in the form of checking accounts, savings accounts, CD’s, IRA’s, 401(k), annuities, pension payments, financial assistance from family members, etc.

Long term care insurance

This is a specialized policy that requires yearly premium payments and provides for non-medical care.  Benefits are triggered when the policy holder has a need for help with certain Activities of Daily Living (ADL’s).  Each policy is different and will have a cap on daily benefit amount and length of time it will pay.  Consider buying a policy around age 65, as policies and coverage change over time. If there is a chronic or potentially incapacitating condition like diabetes, it is recommended to purchase between the ages of 55 and 60.

Reverse mortgages

Reverse mortgages have become popular in helping seniors access the equity in their homes.  Created by the U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA), Home Equity Conversion Mortgages, or Reverse Mortgages, enable homeowners to withdraw some of the equity in their home, offering older Americans greater financial security. This special type of loan allows the homeowner to convert a portion of the home’s equity into cash. Unlike a traditional home equity loan or second mortgage, however, no repayment is required until the borrower(s) no longer use the home as their traditional residence.

VA Home Aid and Attendance Services Pension

If you are a veteran and served during a period of active conflict and are receiving or expect to receive home care, you owe it to yourself to investigate this often overlooked benefit.  The VA offers a plan to help senior veterans with a qualifying medical condition who require the need for assistance with activities of daily living. To qualify, the veteran must:

  • Have received an honorable or general discharge
  • Have doctor’s orders stating the need for aide and assistance of others daily
  • Meet financial requirements
  • Have served one day during an active war and had no less than 90 days of service

The surviving spouse of a veteran may also qualify providing he or she was still married to the veteran at the time of the veteran’s death. For more information visit the VA’s website on Aid & Attendance Benefits for further information.

Respite Grants

There are several respite care grants available to help provide respite care for caregivers who are caring for a loved one.  Some of these include The Multiple Sclerosis Foundation HomeCare Assistance Grant Program for people with MS and the Phyllis & Milton Berg Family Respite Care Grant for people suffering from Alzheimer’s Disease.

Life Settlement

This refers to the process of turning over a life insurance policy to a specialized third-party for the purposes of obtaining funds to pay for long term care. A broker would advance some portion of the policy value depending on the type of policy, policy holder’s age, medical condition and life expectancy. The broker would continue to pay any required premiums and would collect the death benefits.  This option allows one to use life insurance to pay for immediate needs but would deprive heirs of any inherited funds.

In Conclusion

Of course, every situation is different but there are options out there to help you pay for in-home care.  If none of these options work for you, consider reaching out to your local Area on Aging office for further guidance.

Please let me know if you have any questions in the comments section below and I’ll be happy to help.

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