What Is Private Pay Home Care?

If you’ve decided to hire an in-home caregiver for your loved one, you’ll likely be paying out of pocket. Depending on how your loved one has planned or saved, they may be able to use multiple assets to help pay for home care.

It’s important to take a thorough look at your loved one’s assets, as roughly 63% of home care services are paid for privately.^[01]

Is home care the right fit?

Consider the following private pay options when exploring how to cover home care costs:

• Annuities. These can be purchased from banks, mutual fund companies, and brokerage firms and funded through savings. After you purchase, the institution will issue payments to your loved one. As with any financial investment, be sure to work with a trusted company or advisor.
• Reverse mortgages. If your loved one owns a home, they can use a reverse mortgage to pay for long-term care at home. Scammers often target seniors in this area, so only work with a reputable institution.
• Long-term care insurance. Seniors who have an active long-term care insurance policy can use it to fund in-home care. Policyholders will be reimbursed for the cost of assistance with activities of daily living, such as bathing and dressing.^[02]
• Life insurance. Many people purchase life insurance for the death benefit loved ones will receive. However, you can also convert part or all of the policy to fund home care expenses.
• Collective sibling agreements. Sometimes children help pay for a parent’s care with the understanding that they’ll be reimbursed from their parent’s estate. It’s helpful to put this agreement in writing and share it with the executor of the will.

Even though the majority of home care services are paid for privately, many seniors opt to use public programs to get additional funding, adopting a mix-and-match approach with multiple payment sources.

Home care can be expensive, and it’s natural to wonder if there are other avenues available to help fund a loved one’s care. Medicare and other insurance will pay for some home health services. Home health involves medical services and therefore is different from home care, which provides nonmedical support such as assistance with bathing or eating.

You may want to look into the following options:

• Medicaid and Home and Community Based Services (HCBS) waivers. Seniors who already qualify for Medicaid can apply for HCBS waiver in their state. These waivers can help seniors receive care at home instead of an institutionalized setting.^[03]
• Veterans benefits. There are several VA home care programs to consider. However, the services available vary, and you may be charged a copay.^[04]
• PACE. The Program of All-Inclusive Care for the Elderly is offered through Medicare and Medicaid. Seniors can receive home care through PACE if they qualify for the program and live in a PACE service area.^[05]

Home care questions? Get expert help

Figuring out how you’ll pay for home care is only one part of your home care decision. Once you’ve assessed your financial situation and are ready to address your loved one’s care needs, you’ll need to choose whether you want to work with a private caregiver or a home care agency.

If you need assistance during this important journey, A Place for Mom’s Senior Living Advisors are here to help. At no cost to your family, they’ll help you find the right fit for your loved one by providing home care options that work with your budget and needs.