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Paying for Home Care

Paying for home care services is one of the most challenging issues for caregivers because most elders and families must pay for services out-of-pocket. This is a harsh reality for many working- and middle-class families, yet home care services may be the only way to keep an elder out of a nursing home. Since home care can become a major expense, it is a key issue to consider in doing long-term financial planning. (See also Finances.)

Some health maintenance organizations (HMOs) and some health and long-term care insurance plans provide coverage for home health care, so be sure to check benefits statements and policies carefully. You may want to contact the insurance providers to clarify what is covered by the elder's plan. The provider may require the elder's written or verbal permission in order for you to be able to discuss his or her insurance, so be sure to find out from the provider what is required, so you can gather the necessary materials.

Subsidized Home Care Services

Some or all of the cost for home health care services may be covered in these situations:

  • Follow-up care for elders who are homebound due to medical reasons. Elders who need short-term skilled nursing care and physical or other therapy in response to an acute care stay in a hospital or rehab facility will receive Medicare coverage, regardless of their income level. (See Medicare for more information.)
  • Low-income elders. Medicaid programs in most states support home care services as an alternative to nursing homes. (See Medicaid for more information.)
  • Veterans of the U.S. military and their families. Medically indicated home care services are available to eligible active-duty or retired veterans and their spouses, widows, and dependents through the CHAMPVA program. Call 877-222-8387 toll free to determine eligibility for these services. (See Other Government Plans for more information.)

Your local Area Agency on Aging can help explain which services are subsidized on a no-fee or sliding scale basis in your community for the elder in your care. If you would like additional information about eligibility for state and federal subsidies, see the Benefits Checkup from the National Council on Aging, or contact your State Unit on Aging.

Home Care Rates

For families who are paying out-of-pocket for home care services, it is wise to get information on cost from several different agencies. You will probably be faced with some difficult choices between quality and affordability, but you should not be paying less than the average hourly rate in your area.

The hourly rate for a home health aide varies by state, and sometimes by whether the agency is an urban area or not. To get information on the range of hourly wages in various states, go to the Web site of the Bureau of Labor Statistics and click on "State Profile" for the occupation. According to the American Association of Homes and Services for the Aging, the national average hourly rate in 2008 for a certified home health aide was $32. The average hourly rate for non-certified workers was $19.

Paying Families for Home Care

The issue of paying family caregivers to provide home-based care is an ongoing debate among eldercare professionals and public policy makers. There is currently no federal policy in place, but there are a small number of state-level demonstration projects designed to test the costs and benefits of such an approach. These demonstration projects all require the elder to be Medicaid eligible.

  1. Cash and Counseling Programs: These programs are based on a "consumer-directed care" model. They give an elder a cash allowance for her or his home care needs. The cash may be spent to hire a relative or friend who can provide personal and household care, purchase assistive devices, and/or pay for home modifications.
  2. Caregiver Homes: These programs allow a family member, friend, or other unrelated party to be paid by Medicaid to provide home care for an elder. Caregivers are paid from $10,000-18,000 a year and are given training for their job.

To find out if there is a demonstration project in your state, call your state Medicaid office. The Eldercare Locator can connect you with Medicaid counseling. Visit the Web site or call 800-677-1116 toll free.

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