How to Pay for In-Home Care

Many older adults prefer to age in their homes, and studies have shown the mental and physical benefits of doing so. Yet, as we age and need more help with daily tasks, supporting yourself or an older loved one living alone can be hard.

In-home care is a good solution if you want to continue living at home but need some help with your daily personal care, things around the house, errands and more homemaking responsibilities.

But, in-home care can get expensive. According to Genworth’s Cost of Care Survey, in-home costs an average of $28 per hour. Most people need several hours of care per week, so costs can add up quickly.

You can use the below suggestions to help ease the burden of paying for in-home care.

HCBS waivers can cover:

• Personal care services to help with ADLs
• Homemaker services
• Meal delivery
• Adult day services participation
• Transportation assistance
• Assistive device or medical equipment assistance
• Minor home modifications

There are additional eligibility requirements, usually financial and/or medical, for HCBS waivers that go beyond eligibility for standard Medicaid. Because waivers are unique to each state, so are eligibility standards. Additionally, waivers are often limited in their scope and may have waitlists. You can learn more on the Medicaid website.

Another way to use Medicaid to pay for in-home care is through the self-directed services program. With this program, eligible Medicaid beneficiaries can choose to “employ” a family member or other loved one for personal care services at home, and Medicaid will pay the caregiver. Note that the program specifics and eligibility vary for each state, so not everyone is eligible. However, it’s worth checking the options in your state if you’re planning on using a family caregiver for in-home care.

Reverse mortgages do have downsides. They can sometimes carry high fees, and it puts you at risk of foreclosure. It can also make things complicated if you want your spouse to remain in the home if you pass or move to senior living, or were hoping to pass the house down to future generations. Talk to a financial advisor before getting a reverse mortgage to ensure it’s the correct type of loan for your situation.

If you’ve been paying into an annuity, these funds can be a great way to pay for in-home care. However, if you’re a senior and you don’t already have one of these accounts, be wary. Older adults are often targeted for annuity scams which can result in financial losses.

If you have a long-term care (LTC) insurance policy, it may cover some costs of in-home care. Some LTC policies only pay home care benefits to a licensed home care agency or other licensed provider. Others pay a set daily amount to the insured person who qualifies for the benefits. This means you can spend that money on any caregiver you choose, including family members.

Some life insurance policies can be cashed in with the insurance company, usually for 50 to 75 percent of the policy’s face value, though some policies permit these “accelerated benefits” or “living benefits” only if the policyholder is terminally ill.

If these accelerated insurance benefits aren’t available, you can investigate whether a “life settlement” (also called a “senior settlement”) may be possible. This involves selling the policy to a life settlement company (different from the insurance company that issued the policy) for a lump sum.

Both options have downsides like reducing your payout amount and possibly being taxable, so carefully consider the pros and cons and speak with a financial expert before cashing out a life insurance policy.

If you or your loved one was a veteran and was discharged honorably, you may be eligible for cash-payment VA programs that you can use towards paying for in-home care. The Aid & Attendance benefit and Housebound allowance are monthly payments added on top of your VA pension, designed to help senior veterans and surviving family members pay for care, including in-home assistance.

To get one of these benefits, you must meet medical eligibility requirements, such as being housebound due to a disability, having poor eyesight, or needing help with activities of daily living.

In addition to the stress of paying for in-home care, if you’re planning on using a non-family caregiver, you also face the challenge of finding someone reputable, reliable and insured to entrust with your or your loved one’s well-being. For free assistance finding trusted, quality in-home caregivers, contact a Caring.com family advisor at (800) 973-1540.

In addition to those already mentioned, make sure that you or your loved one take advantage of the below programs that can make paying for care easier.