How to Pay for Home Health & Home Care

How your family pays for care — whether delivered at home or in an assisted living facility — depends on whether you’re looking for home care or home health. Here’s a look at the differences between paying for home health versus paying for home care and a variety of payment sources.

Both home care aides and home health aides bill on an hourly basis, but hourly rates vary by as much as 50 percent, even in the same state or town. In general, pay rates in urban areas are higher than in rural communities and even higher on the East and West Coasts than in the central U.S. Costs also depend on whether you’re looking for home care or home health.

For 15 years, Genworth has developed the Cost of Care Survey to help families understand the costs of varying types of care across the U.S. According to the 2018 survey, the average hourly median costs in Massachusetts for homemaker services is $25.75 and $27.10 for a home health aide. Memory care at home can be affordable and relatively low cost when compared to residential care. Typically, home care providers do not charge additional fees to care for individuals with Alzheimer’s or other dementia.

It’s important to note that these are average costs from home care agencies. Private individuals can be retained to provide most of the same services with fees that are 20 to 30 percent lower. However, independent caregivers are typically uninsured, do not go through background checks, and may be unable to provide alternatives in case they are not available to work on short notice.

Regardless of if you hire an agency or a private caregiver, home care costs add up. These costs tend to add up because most people eventually need care and companionship for at least a few days a week, if not full time.

Fortunately, there are ways to cover the cost of home health and home care.

Medicare

Because home health is considered medical care, it is covered by medical insurance, including Medicare and Medicaid. Medicare covers home health care if your loved one:

• Is homebound, meaning it is extremely difficult for them to leave their home and they need help doing so
• Needs skilled nursing services and/or skilled therapy care on an intermittent basis.
• Has a face-to-face meeting with a doctor within the 90 days before they start home health care or the 30 days after the first day they receive care
• Gets prescribed home health care by a doctor
• Receives care from a Medicare-certified home health agency

Services covered by Medicare’s home health benefit include intermittent skilled nursing care, therapy, and care provided by a home health aide. Home health services may also include medical supplies for use at home, durable medical equipment, or injectable osteoporosis drugs.

Before you start getting home health care, the home health agency should tell you how much Medicare will pay. The agency should also tell you if any items or services they give you aren’t covered by Medicare and how much you’ll have to pay for them. This should be explained by both talking with you and in writing.

Medicare does not pay for nonmedical care such as home care.

Medicaid

Medicaid, an insurance program for low-income individuals, pays for nonmedical home care, home health care, and other in-home supports to help individuals remain living in their homes. However, Medicaid rules are state-specific; therefore, eligibility and benefits differ in every state.

Veteran Benefits

There are several forms of assistance from the Department of Veterans Affairs (VA) that help veterans afford home care. This may be direct financial assistance or care services that can reduce a veteran’s overall need. There are three different pension benefits (cash assistance) that can be applied toward home care:

• Improved Pension
• Housebound
• Aid and Attendance

Long-Term Care Insurance

Some long-term care insurance policies pay for home care. However, many cover only nursing home care. Also, some policies that do cover home care require that the home health care agency be certified and that your loved one’s health needs be serious enough to require a nurse practitioner or home health aide.

If your loved one’s policy is more flexible, then it should designate a certain amount per day for home care to be spent on the type of aide you choose.

It’s important to note that for seniors without long-term care insurance, but have a need for care, are typically not eligible to purchase insurance. If they are permitted to do so, their premiums are usually cost prohibitive. So although it may be too late for your aging loved ones to purchase a long-term care insurance policy, you might want to consider this option for yourself.

Private Pay

Many families pay for home care from their savings. That’s why it is advantageous to develop a long-term financial plan when considering home care. Doing so has the dual benefit of ensuring a comfortable and consistent aging process for your loved one while at the same time preserving your family’s assets and resources.

Home Health vs. Home Care Payment Methods Comparison Chart

The chart below highlights some of the differences between paying for home health versus paying for home care.

Payment Methods	Home Health	Home Care
Covered by Medicare	Yes	No
Covered by Medicaid or Medicaid Waiver Program	Yes	Yes
Private health insurance	Yes	No
Private pay	Yes	Yes
Long-term care insurance	No	Yes

 

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For an in-depth look at the differences between home health and home care services, how home health and home care professionals are trained and licensed, and what to look for when hiring home health and home care services, download our Guide to Home Health & Home Care Services.

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