The Cost of In-Home Care and How To Pay for Home Care

Many aging adults prefer to age in place so they can remain independent in the comforts and safety of their homes. However, as seniors age and circumstances change, the simple acts of getting around and practicing self-care can become increasingly difficult. If moving to an assisted living facility, retirement community, or nursing home is not an option, in-home care can keep your loved one at home and maintain their independence for longer. But how much does home care cost?

Below, we provide an overview of the costs of home care services, how it compares to other care types, and how to pay for home care.

In the United States, home care costs an average of $26 per hour according to Genworth’s Cost of Care Survey. When considering costs, it’s important to note that home care is different from home health care. The former is an umbrella term for any day-to-day care an elderly receives at home. They’re primarily non-medical, companionship, homemaker, and personal care services. Meanwhile, home health care is short-term care that focuses on addressing a senior’s medical conditions.

Most home care services charge by the hour. In the U.S., home care aides, homemakers, and companions charge a median hourly rate of $26. However, the cost can vary by the care provider, location, and level of care required. The overall cost will depend on how much assistance your loved one needs and the included support services and supplies.

For example, Seattle charges one of the most expensive hourly rates for home care services at $35.50 per hour. Therefore, it will cost you $6,154 per month for 8 hours of care daily in 5 days per week. In contrast, Louisiana offers one of the lowest home care rates in the U.S. at $19 per hour, which comes down to a monthly cost of $3,294 for 8 hours of care in 5 days per week.

How you hire an in-home caregiver will also affect the cost. In this case, you have two options: hire a private home care provider, or use a home care agency. In most cases, hiring a care provider from an agency is more expensive than a private one.

Private in-home care providers are generally hired through caregiver databases and job lead websites and often have lower hourly costs. Although independent home aides charge by the hour, this setup has no specific payment structure, as payments, taxes, and fees are often contractually agreed upon by both parties. While hiring a private caregiver is less expensive, you may have to cover the hidden costs of being an employer, like vetting potential hires (i.e., background checks). Moreover, independent aides may not have worker’s compensation insurance, which protects both employers and caregivers if they get sick or injured on the job.

On the other hand, hiring a home care aide from an agency is generally more expensive by 20%-30% than independent caregivers. While there’s a significant cost difference, the agency takes care of the scheduling and paperwork duties. The agency also vets all its employees, manages its payroll, and can provide backup caregivers when needed.

In-home care costs vary not only by the services and level of care provided, but also by geographical location. Since home care costs depend on the caregivers’ wages, they vary widely from one state to another. Seniors who live in an area with a higher cost of living are likely to pay more than the national average for home care. Meanwhile, individuals in cities with a lower cost of living will pay less for a caregiver.

• Minnesota: $35.00 per hour
• Washington: $34.34 per hour
• Colorado: $33.50 per hour
• California: $32.00 per hour
• Oregon: $31.50 per hour
• New Hampshire: $31.50 per hour
• Massachusetts: $31.00 per hour
• South Dakota: $31.00 per hour
• Alaska: $30.00 per hour
• Hawaii: $30.00 per hour

• West Virginia: $18.50 per hour
• Louisiana: $19.00 per hour
• Mississippi: $20.00 per hour
• Alabama: $20.00 per hour
• Arkansas: $21.95 per hour
• Georgia: $22.50 per hour
• North Carolina: $23.00 per hour
• South Carolina: $23.25 per hour
• Texas: $24.00 per hour
• Tennessee: $24.00 per hour

Below are comparisons between the cost of in-home care versus other care types.

Genworth’s Survey cites only a slight difference in median hourly rates between home care and home health care services–the former at an hourly rate of $26 and the latter at $27. The slight cost difference is mainly due to the light medical services provided by home health aides.

At $4,500, the monthly cost of assisted living is nearly identical to home care’s $4,506 a month per 40 hours of care per week. In-home care and assisted living facilities offer very similar services and levels of care and are intended for seniors who don’t require extensive medical care, hence the almost identical costs. However, residents of assisted living communities have aides available to help them 24/7, while those living at home typically do not.

Nursing homes, also called skilled nursing facilities, are long-term care facilities designed for seniors who don’t require hospitalization but can’t be cared for at home safely. Since nursing homes provide more extensive medical and personal care, they’re significantly more expensive than in-home care settings. A stay in a semi-private room in a nursing home will cost you $7,908 monthly and $9,034 for a private room.

There are several ways to pay for in-home care for seniors, ranging from private payments to government programs.

Medicare will only cover in-home medical services mandated by a doctor. Meanwhile, non-medical or custodial home care services (i.e., services provided by in-home caregivers) are not covered. Furthermore, Medicare has specific qualifications to cover medical services at home. The senior must be:

Medicare will cover in-home medical services such as physical therapy, occupational therapy, intermittent skilled nursing care, and medical social services. Conversely, Medicare won’t cover basic caregiving services like homemaking, 24-7 daycare at home, meal deliveries, and personal care services. Please visit the Medicare Home Health Services Coverage page to learn more about eligibility requirements and specific coverages.

To be eligible for home care services coverage, you must have Medicare Part A and/or B, which are available to individuals who meet the following requirements:

• Age 65 or older
• Disabled
• End-Stage Renal Disease (ESRD)

Once you’re ready to sign up for Medicare Parts A and B (generally three months before you turn 65), you can enroll in Medicare through Social Security. If you already received retirement benefits before turning 65 or disability benefits, Social Security will automatically enroll you in Medicare after 24 months.

Below are the ways to sign up for Medicare parts A and/or B:

• Apply for Medicare via Social Security (via SSA.gov)
• Visit your local Social Security office (Office locator tool)
• Call Social Security at +1 800-772-1213 or +1 800-325-0778 for TTY users
• If you or your spouse worked at a railroad, call the Railroad Retirement Board (RRB) at 877-772-5772
• If you have an End-Stage Renal Disease (ESRD), call 800-772-1213

For more information about Medicare eligibility requirements, visit the SSA.gov website.

Under the Home and community based services (HCBS) program, Medicaid covers the cost of assistance delivered by home care aides so seniors can remain at their homes or community instead of a facility. Covered services may include assistance with ADLs (e.g., eating, bathing, dressing, etc.) and IADLs, skilled nursing care, homemaker services (e.g., shopping, cleaning, laundry, etc.), meal delivery, and transportation.

However, covered services and coverage amounts can vary by state. Currently, all 50 states and D.C. have at least one program for assisting individuals living outside of healthcare facilities, like their homes, for example.

As an example, California has the In Home Supportive Services (IHSS) Program, a popular program covering in-home assistance services for eligible individuals. On the other hand, Florida offers the Statewide Medicaid Managed Care (SMMC) Long-Term Care program, which covers home care services like meal delivery, companion care, and homemaker services.

Please see your state’s Medicaid website to learn which in-home care services are covered, or you can use Medicaid.gov’s State Waiver List tool for a complete directory of Medicaid waiver programs across all states.

You can find the contact information for your state’s Medicaid office below.

Depending on medical needs, income, and family size, seniors may qualify for free or low-cost health care via Medicaid. Medicaid eligibility requirements vary by state, but the main categories are:

• Medical qualifications: The senior must have a medical need for care. If they need skilled nursing care or have a cognitive disability, they will likely qualify. Meanwhile, seniors that don’t require skilled nursing but need assistance with ADLs may be eligible for some Medicaid programs. Medical qualifications vary by state since each defines what constitutes “nursing home level of care” differently.

• Financial qualifications: In 2023, the poverty guidelines for all states except Alaska and Hawaii is $14,580 for a single-person household and $50,560 for a family of 8. As such, applicants making less than 100% to 200% of the federal poverty level (FPL) will likely qualify for a Medicaid program. Meanwhile, if the senior makes less than 133% of the FPL, there’s probably a program available, but it depends on whether the senior’s home state has expanded Medicaid under Obamacare.

To learn your state’s Medicaid eligibility requirements, please call your state’s Medicaid office or see the official Medicaid State Profiles page for up-to-date information on each state’s eligibility requirements.

There are two main ways for eligible individuals to apply for Medicaid:

• Contact your state’s Medicaid office.
• Apply through the Health Insurance Marketplace via Healthcare.gov.

After submitting your application, the state will conduct a financial review to determine your financial eligibility. Then, a personal care needs assessment will be conducted to determine your functional eligibility. It takes 45 days for states to process your application, or 90 days if your application is linked to a disability.

Please see the State Medicaid Links for more details about each state’s Medicaid eligibility, enrollment, and contact information.

Seniors who have served in the U.S. Armed Forces are eligible for a benefit known as the Veteran Directed Care Program. This program covers various homemaking services that in-home caregivers generally provide. These include basic, non-medical support such as help with ADLs and IADLS, light household chores, laundry, grocery shopping, meal preparation, and more.

All Veterans are eligible for Veteran-Directed Care if they are eligible for community care, meet the clinical requirements, and it’s available. Covered services will depend on your loved one’s needs and availability. Talk with your VA social worker to determine which specific services your loved one may receive.

To apply for Veteran-Directed Care or if you want to learn more about availability and covered services, talk with your local VA social worker.

Long-term care insurance typically covers an extensive array of care types, including in-home care. However, the exact kind of coverage can vary by policy. Many policies often cover in-home medical care, such as skilled in-home nursing care, physical and occupational therapies, and assistance with ADLs. Some policies may also cover homemaker and custodial services, including light housekeeping, meal preparation, and other caregiving duties. In some cases, long-term care insurance policies may even pay benefits to family members who act as caregivers at home. Double-check your loved one’s long-term care insurance policy to determine specific coverages.

Please see LongTermCare.gov to learn more about long-term care insurance.

Some life insurance policies have a feature that enables you to receive a tax-free advance on your life insurance death benefit while you’re still alive. Depending on your loved one’s policy, you can take out a cash advance from the policy to pay for long-term care services, including in-home care. In general, you’ll need to pay an extra premium to add an ADB to your policy, although some insurance providers may include them with your policy for little to no cost.

Although the requirements to access ADB can vary by insurance company, there are generally two ways to access this feature:

• For terminal illness: The senior must have a diagnosis of a terminal illness from a medical doctor. Insurers will require that you have a life expectancy of less than 12 months to two years.

• For chronic illness: A medical professional must certify the senior has a chronic condition that prevents him from two of the six activities of daily living and they’re permanent nursing home residents. Seniors with severe cognitive impairment and requiring constant supervision may also qualify.

To learn more about this insurance feature, please read this guide by LongTermCare.Gov.

It’s common for families to pay for senior in-home care out of pocket. Some popular sources of private payment funds are:

• Personal savings
• Pensions or other retirement funds
• Funds from a home sale
• Income from stocks and bonds
• Funds from selling life insurance policy
• Reverse mortgages

Finding in-home help for your senior loved one can be overwhelming. You’ll need to do some research to ensure that you hire a trustworthy and reliable in-home care aide. You can start by browsing Caring.com’s extensive directory of non-medical home care agencies and home health agencies. You can search these directories for agencies in your area and read customer reviews.
Alternatively, you can also get in touch with Caring.com’s trained Family Advisors to receive personal, one-on-one assistance in finding an in-home caregiver that’s right for your loved one, all at no cost for you. Please call (800) 973-1540 to reach our Family Advisors.