How to Budget for Home Care Services

Whether a senior finds it difficult to live at home securely due to a chronic health condition, recovery from an illness, dementia, or simply the natural aging process, in-home care may give the supervision and help they need to age in place at home. Yet, families often express anxiety over the expense of in-home care services as well as the many payment alternatives available to them financially.

When it comes to the question of how to pay for in-home care, seniors and their families may have a few options to choose from. The first step in finding the appropriate means of financing your loved one’s care is to establish the level of assistance that your family member or friend needs. The highest degree of care is the provision of medically essential home health care by qualified medical professionals such as registered nurses and therapists. 

This kind of treatment is the most costly. Home health care is most likely to be paid for by a mix of several payment choices, some of which may include Medicare, Medicaid, and benefits for veterans, as well as other possibilities. Companionship and support with day-to-day tasks are two of the benefits of non-medical home care, which is often paid for on an individual basis. In most cases, a full needs assessment is carried out in order to evaluate the kind and extent of the assistance a senior citizen needs in order to satisfy their individual requirements.

How much does it cost to get home care services?

The prices of in-home care vary not just by geography but also by the degree of service provided. According to the most current Cost of Care Study conducted by Genworth, the median cost of receiving personal care services from a home health aide in the United States is $27 dollars per hour. Home care that does not include medical treatment, such as housekeeping or laundry, has a median hourly cost of $26.

What kinds of health insurance policies pay for in-home care?

The advantages of Medicare for in-home care

Those who are 65 years old or older, younger persons who have specific impairments, and people who have end-stage renal disease or amyotrophic lateral sclerosis are eligible to participate in Medicare, which is a health insurance program run by the federal government (ALS).

Medicare Parts A and/or B will, in the majority of circumstances, pay for medically required treatments that are administered in the comfort of one’s own home over the course of a certain period of time if the services have been authorized by a physician. An elderly citizen who needs solely nonmedical care (such as help with meal preparation, bathing, or cleaning), on the other hand, will not be eligible for Medicare coverage of the services in question.

Medicare-certified home healthcare firms are businesses that have been awarded contracts by Medicare to offer a variety of home health services that are covered by Medicare. Medicare will only pay for services rendered by a provider that can demonstrate that they have met Medicare’s quality requirements. A senior citizen who is enrolled in a Medicare Advantage plan may be required to use a licensed home health care agency that is a member of the network that is associated with their plan.

A further opportunity for older citizens who meet the requirements is the All-Inclusive Care Program for the Aged (PACE). PACE is a program that is offered via Medicare, but it is also open to Medicaid patients in over 30 states. The vast majority of PACE members are qualified for both Medicare and Medicaid simultaneously. Beneficiaries of Medicare who are not qualified for Medicaid normally pay monthly premiums, but they are not responsible for deductibles or coinsurance payments.

PACE is a program that is intended to assist elderly people who are weak in remaining in their own communities rather than going into nursing homes. A participant in the PACE program gets coordinated care that is delivered to the client’s home by a team of healthcare experts from a variety of disciplines. A benefit of PACE is that it incorporates all Medicare and Medicaid services but it may also cover additional services as indicated by one’s PACE team.

Coverage of home care services under Medigap in addition to Medicare

Medigap, which is also known as Medicare supplement insurance, is an extra policy coverage that operates in conjunction with the benefits provided by original Medicare (Parts A and B). The “gaps” in coverage that Medicare does not provide for, such as copayments and deductibles, are filled by the supplementary policy that is bought from a commercial insurance provider.

Due to the fact that neither Medicare nor Medigap insurance are intended to pay for long-term care, their coverage for in-home services is often restricted to just covering care that is medically required and temporary in nature. If a senior does not fulfil the qualifications set out by Medicare for coverage of home health care, then a Medigap plan will not help reduce the amount of money that must be paid out of pocket for these services.

Paying for in-home care with typical health insurance plans

The majority of private health insurance plans will not pay for non-medical home care services, and it is uncommon for private health plans to cover 100% of the cost of in-home professional care. Verify with the health insurance provider of the person you care about since the coverage provided by each plan is different, and investigate prospective plans to see which ones provide the greatest coverage possibilities.

In-home care is covered under the advantages of long-term care insurance.

Long-term care insurance is a specific kind of insurance that is acquired from private firms and used to cover the expenses of receiving care in a nursing home, an assisted living facility, or at home. Since the benefits change based on the plan, it is essential to make sure you understand the services that are covered by the insurance before you buy it. It is important to keep in mind that in order for the plan to give financial support with the expenses of personal home care services, there must first be an allocation for nonmedical services.

When it comes to constructing and obtaining long-term care insurance coverage, you should make preparations in advance. Premiums are often at their lowest for those who are healthy and in their 50s or 60s. It is doubtful that those who are older seniors and those who have major medical issues or chronic diseases would qualify for coverage. The American Association for Long-Term Care Insurance reports that in 2019, more than 53.6% of individual applicants age 75 and older for typical long-term care insurance plans were rejected coverage.

Making use of life insurance to cover the cost of home care

There are a few different methods by which elderly people who have life insurance plans might utilize such policies to pay for in-home care services. You have the option of taking out a loan against the cash value of the policy, or you may surrender the policy in its whole in return for the cash value.

An “accelerated death benefit” rider may be included in some policies. This rider acts as a cash advance that is deducted from the total amount of the death benefit that the recipient gets when the policyholder passes away. The owner of the insurance must either have a life-threatening illness with a short life expectancy (typically less than 24 months) or be declared unable to conduct the essential activities of daily living in order to qualify for the payout (ADLs). Because the policy is not surrendered at the time of the cash advance, the policyholder is obligated to keep paying the premiums in order to ensure that the beneficiary will get the portion of the original death benefit that is still outstanding. Before they will begin paying out any early benefits, the insurance company will first seek statements from treating doctors and copies of medical documents that testify to the sickness or loss of function.

The life settlement industry is quickly becoming a well-liked choice for retirees looking to receive cash payments. This is accomplished by selling seniors’ existing life insurance policies to third parties, who then assume the responsibility of future premium payments and collect the death benefits when the policies mature. The elderly may put this lump payment to use in any way they see fit, however, it is often used to pay for long-term care expenditures. “candidates for life settlements are generally age 65 or older and carry a life insurance policy with a face value amount that is more than $100,000,” as stated by the Life Insurance Settlement Association. Viatical settlements are comparable to other types of life insurance payouts, with the exception that the original policyholder often suffers from an incurable illness and has a life expectancy of fewer than two years.

Lifecare financing or the conversion of life insurance is yet another alternative that has only been around for a short while. When a life insurance policy is sold, the original owner is entitled to a “long-term care” or “life care” benefit account, which entitles them to a set dollar amount’s worth of elder care services. This is in place of the lump sum that would have been received from the sale of the policy. It is required that this account be used to make direct payments for the provision of services such as in-home care. Again, the third party who buys the life insurance policy is the one who is responsible for making the premium payments and, when the original policyholder passes away, the third party will get the death benefit. If it is handled correctly, a senior citizen’s eligibility for Medicaid should not be affected by life care financing, in contrast to settlements.

Veterans’ benefits that include coverage for treatment provided in the home

Making use of the health benefits provided by the VA to pay for home care

As an alternative to nursing home care and as a way of providing respite care for veterans and their family caregivers, the Veterans Health Administration’s standard health benefits package may be used to provide various levels of a home and community-based services. These services may be provided either as an alternative to nursing home care or as a way of delivering respite care. All veterans who satisfy the prerequisites for receiving regular benefits are eligible to participate in the Skilled Home Health Care Services (SHHC), Homemaker and Home Health Aide Services (H/HHA), and Home-Based Primary Care programs; however, certain additional criteria may apply.

Pension payments from the VA may be used to cover the cost of home care.

Pensions awarded to veterans are one source of cash that may be used to assist pay the expenses of in-home care for veterans and the spouses of soldiers who have passed away. The financial assistance made available to veterans and surviving spouses whose requirements call for a higher level of care is increased through the provision of “improved” pensions in addition to the standard veterans’ pension. These “improved” pensions fall into one of two categories: aid and attendance or housebound.

The requirements for eligibility for VA pensions can be complicated, but the bare minimum is that applicant must have served on active duty for a total of ninety days (with at least one of those days falling within a period that is officially recognized as being a time of war) and received a discharge that was not dishonourable. Since eligibility for pensions is based on need, applicants must also satisfy specified income and wealth thresholds.

Home care services for a fee are provided privately

Paying for in-home care using one’s earnings and one’s savings

The cost of in-home care services is paid out of pocket by many families. Individual retirement accounts (IRAs), health savings accounts (HSAs), pensions, investments, annuities, real estate, and Social Security benefits are all examples of possible sources that might be utilized to support the costs of private pay home care.

It is vital to keep in mind that in order to qualify for Medicaid, seniors are needed to “draw down” practically all of their assets in a responsible manner. This requirement may make some seniors reluctant to spend their hard-earned earnings or sell their possessions. The care requirements of an elderly person will, in most cases, increase with time, and greater levels of long-term care come at an ever-increasing cost. While formulating a financial strategy for the long term, it is crucial to take into consideration the likelihood that an elderly loved one may outlive their finances and be forced to file for Medicaid if they do not have a sufficient amount of savings accumulated.

Making payments for in-home care using proceeds from a reverse mortgage

Homeowners over the age of 62 who have a significant amount of equity in their houses may be eligible for a reverse mortgage loan, which enables them to get cash by borrowing against the value of their properties. The profits might be used toward the cost of in-home caregiving, the financing of renovations to the residence to make it more suitable for ageing in place, or even the purchase of long-term care insurance. The borrower is responsible for repaying the reverse mortgage upon the borrower’s death, the sale of the house, or their removal from the residence.

Programs that provide financial help to the public for home care

Assistance with in-home care arrangements provided by Medicaid

Medicaid is a program that is jointly run by the federal government and the states, and it is designed to provide older citizens with low incomes and little assets access to medical treatment. As a result of the fact that benefits are managed on a state level, eligibility conditions and the range of services that are covered are very variable.

It is possible that a senior citizen’s home health care and personal care services will be covered by the state Medicaid plan, but this will depend on the senior citizen’s location. The Medicaid program in certain states has been extended via the use of exemptions so that services may be provided to those who, under normal circumstances, would not qualify for the program. Home and Community-Based Services (HCBS) waivers are able to be used for the purpose of paying for in-home medical care as well as non-medical home care services. Via Medicaid’s “Cash and Counseling” programs, family caregivers in many states are eligible to receive payment for the care they offer to their loved ones.

Services of assistance available via the Older Americans Act

The Older Americans Act (OAA) allocates funds from the federal government to support a variety of in-home and community-based programs all around the United States. These services and resources may help seniors save time while also contributing to the costs of providing in-home care, despite the fact that they are not designed to explicitly give financial assistance to elderly individuals.

The Older Americans Act (OAA) created a network of Area Agencies on Aging (AAAs) around the country. These AAAs are public or private nonprofit institutions that are designed to meet the needs and concerns of all older individuals on a regional and local level. Get a list of the senior support services that are available in your community by getting in touch with the Area Agency on Aging in your area.

Home care at an affordable price

Even though there are a variety of ways to seek financial aid for in-home care for seniors, some families may still require help fitting elder care into their budget. Care Advisers from EmbracingHomeCare are available to assist and link you with local home care providers that are affordable and meet the requirements of your loved one.

Your family may also find it helpful to assemble an economical home care plan by using the care services and money-saving initiatives offered in the community.

There are occasions when neighborhood groups and NGOs may provide free temporary care for families in need. In some places, Medicaid may also be required to pay for it. Gratis respite care gives the family members who are providing care with an opportunity to take a break, and it also has the potential to cut down on the period of time a loved one needs the assistance of a hired caregiver.

Meal delivery services, such as “Meals on Wheels,” provide food to elderly people who continue to reside in their homes but may have difficulty preparing their own meals. A senior citizen may get assistance staying safe in their own home from the free service, which may even free up finances for additional care services.

Adult daycare facilities provide elder care services such as meals, supervision, and opportunities for seniors to interact socially. These services are available to seniors of varying capacities. Adult daycare facilities are an inexpensive care choice for caregivers whose family members are ageing in place, according to the Cost of Care Study conducted by Genworth. The median cost per day for adult daycare centres is $78. Adult day centres may qualify for coverage under the Medicaid programs in certain states.

The Low Income Home Energy Assistance Program, often known as LIHEAP, helps low-income families pay their home energy bills by providing financial support. This may make it easier for families to afford in-home care services.

Making preparations to pay for in-home care

The good news is that there are numerous tools available to assist families in the process of arranging for in-home care and the costs associated with it. Elder law lawyers focus on issues associated with becoming older, such as planning for retirement, paying for long-term care, and estate administration, among other things. They assist elders in understanding applications for benefits such as Social Security, Medicaid, and veterans’ benefits, among other advantages. In addition to this, they are able to make recommendations to other experts, such as financial advisers, tax specialists, geriatric care managers, and providers of elder care.

The following is a list of other resources that families may use to assist them in budgeting for the expenses of in-home care:

• Advisors that specialize in Medicare and act as brokers represent a number of different insurance firms. They are able to assist you with the enrollment procedure as well as the process of evaluating the many plan alternatives that are accessible to you.
• SHIP counsellors provide Medicare support that is both free and objective. SHIP stands for the State Health Insurance Assistance Program. They will be able to guide you through the maze that is Medicare, but they are not permitted to assist you in enrolling in the program.
• Geriatric care managers are often registered nurses or social workers that provide a variety of services to assist families in the planning and management of care alternatives for their elderly loved ones. They are able to provide a helping hand by doing in-home exams and organizing the provision of medical treatments.
• The local resources that are available to assist seniors in remaining independent and safe in their homes are coordinated by area agencies on ageing. They may be able to link elders with services such as food delivery to the home, adult day care, help with cleaning, and financial support for aged home care services.
• Our Care Consultants are available to assist in simplifying your search for in-home care alternatives should you or a loved one need assistance in exploring the available possibilities. You might also connect with other family caregivers on the EmbracingHomeCare Forum to get answers to your questions, support, and advice on elder care.

Are you looking for compassionate and reliable home care services in Orange, Osceola, Brevard, or Seminole counties? Look no further than our professional team at Embracing Home Care! Our highly trained caregivers provide personalized care for seniors and individuals with disabilities, ensuring that they can continue to live independently in the comfort of their own homes. With a variety of services including personal care, transportation, meal preparation, and companionship, we strive to improve the quality of life for our clients and provide peace of mind for their families. Contact us today at 321-758-2036 to learn more about our affordable and flexible home care options and to schedule a consultation with one of our care coordinators. Let us help you or your loved one live life to the fullest!  We serve Central Florida cities like Orlando, Apopka, Ocoee, Winter Garden, Sanford, Altamonte Springs, Casselberry, Palm Bay, Melbourne, Titusville, Kissimmee, St.  Cloud, Celebration, Lake Mary, Oviedo, Longwood, Winter Springs, Cocoa Beach and more.