Ways to Pay for Home Care

When it comes time to find in-home care for your parent or relative, paying for this important service is probably the last thing on your mind. After all, it's hard enough having to find a perfectly matched, capable and compassionate home care provider to meet your loved one's changing needs.

Unfortunately, since home care aide providers like Senior Concierge Providers offer personal rather than medical care, most health insurance and Medicare programs do not cover the costs of this critical service.

Figure below illustrates some of the major differences between Medicare, Medicaid and private home care services. It's important that you and your family draw up a financial plan to help you meet your loved one's home care needs and ensure that they are comfortable, secure and cared for as they age.

There are a number of resources and options available to help you with that plan. In order to help you weigh each option and plan accordingly, we've compiled the following list of ways to pay for your beloved elder's home care needs.

Don't let the cost of home care stand in the way of providing your loved one with the temporary, part-time or live-in care and companionship that he or she needs. There are also a number of state-based programs that may provide financial assistance to cover all or some of the costs of home care.

Long-Term Care Insurance

The first step in planning for your loved one's home care needs is to determine if he or she has a Long-Term Care Insurance plan. Since individuals who require non-medical home care are not sick in the traditional sense, traditional health insurance, Medicare and Medicaid do not provide for their needs. Having a Long-Term Care Insurance policy in place prior to any major changes in the health and mobility of your loved one guarantees that they will have complete home care coverage assistance available if and when they need it.

Veteran's Benefits

The Veteran Aid & Attendance Pension program offers families and individuals an additional method of meeting home care costs. For qualifying service members and their spouses, the A&A Pension provides up to $1,632 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple.* Whether or not you or your family member qualifies for the A&A program, the VA allows households to deduct the annual cost of paying for in-home care when calculating their regular pension benefit. This annual cost is then used to calculate the benefit based on a new "countable income" and allows families earning more than the pension benefit to receive a disability income from the VA. This income can be a welcome supplement for families struggling to provide home-based eldercare for their loved ones.

Asset Conversion

There are a number of options available to families with non-liquid assets that allow them to convert those assets to help cover things like home care expenses. Reverse mortgages, home equity lines of credit, Rex Agreements and EquityKey are real estate-based asset conversion programs that provide seniors with financial solutions to their long-term home care needs. In addition to these programs, death benefit loans, life settlements, life care assurance benefits and viatical settlements offer seniors a variety of methods for converting their life insurance policies to pay for home care as well.

Medicaid Programs

Sometimes referred to as "nursing home diversion" programs, there are a number of state-specific initiatives designed to help keep seniors who qualify for Medicaid out of nursing homes and living comfortably in their own homes. These programs will help to cover the cost of home care in cases where that care can be provided at an expense below that of a nursing home.

Tax Credits and Cost of Care Reductions

There are a variety of state and federal programs, initiatives and tax credits that can significantly lower your family's tax burden effectively reducing the overall cost of care. Research the following options to find out if your family member qualifies: Alzheimer's Respite Care, Elderly and Disabled Tax Credit, Federal Elderly Care Tax Credit, LIHEAP – Aid for Energy Costs, Medical Expense Tax Deductions, NFCSP Respite Care, State Elderly Care Tax Credit, Veteran's Administration Respite Care.

Savings & Pensions

Most non-medical care is paid privately via savings or long-term care insurance. In addition to Social Security benefits and private pensions, drawing on savings is very often the most immediate means of covering the expense of in-home care. Since most assistance programs determine eligibility based on an individual's resources, the amount of monetary assistance available is reduced based on an individual's resources. As those resources diminish, the amount of care assistance options increases dramatically.