The vast majority of Americans say they plan to live at home in their old age. In fact, most of America’s frailest older adults live at home. Only a small fraction live in assisted living or nursing homes. But, paying for needed home care can be tough.Our families make it possible for us to live at home in old age – by providing the vast majority of in-home support to frail older Americans, often at high cost to their own physical, emotional, and financial well being.
Families provide this care, in part, because it’s challenging for them to find paid home care workers they trust. The good news is that organizations like CareAcademy are creating new and better ways for families to vet and prepare paid helpers.
But also, families worry how to pay for home care. On average nationally, a home care aide can cost about $20 per hour. And, unfortunately, Medicare – the U.S. health insurance program for older adults – does not pay for these services.
This price tag leaves many Americans wondering what to do. Like this daughter who says,
“My mom has some income from social security and less than $10,000 in savings. I live in a different state and have a full time job I need to keep. Mom was doing fine until recently – but now she’s in and out of the hospital and having trouble taking care of herself. My sister and I are worried and wondering what we do next.”
What do you do if you're trying to figure out how to pay for home care?
Well, in the absence of a national insurance program for home care, here are some options for Americans who want to find a way to pay for care in the home for themselves or their loved ones.
Medicaid Home Care
Medicaid is a public program that pays for home care services for older adults and is run by states. It’s not to be confused with the health insurance program, Medicare, which – as I said above – covers none of this.
Medicaid is important because it’s the safety net for when everything falls apart and you are out of options.
You may have heard of it as a provider of health insurance under Obamacare. But, it’s also a program that has paid — traditionally — for nursing home care when families run out of money and options.
Nearly every state Medicaid program also offers home and community-based services programs to help frail older adults (and younger adults with disabilities) stay at home and out of an institution.
But, the complexity of these programs can be challenging. States usually tightly control eligibility, benefits and access. Medicaid home care is only available to individuals whose income and assets are relatively low, or whose resources have been drained by large medical and long-term care costs.
And, very important — no two states are alike. That’s why it’s really important to understand how Medicaid home care works in your state. One good place to start is the aging and disability resource center (ADRC) in your area. Google this term along with the name of your state (e.g., “Minnesota Aging and Disability Resource Center”).
Private Long-Term Care Insurance
Very few Americans own a private long-term care insurance policy. But, if you are one of them, the insurance will usually pay for home care services.
The catch is that, in order to qualify for benefits, you must be very frail. That is, the insurance will pay only after you are no longer able to handle two of six very basic activities of daily living (like eating, bathing, and dressing) by yourself.
Also, nearly all long-term care insurance policies have daily dollar and lifetime limits. The average long-term care insurance policy pays for up to $150 in services per day over about three years.
Americans finance most of their home care spending through out-of-pocket. In fact, recent research shows that two-thirds of all spending on home care is paid for out-of-pocket.
There are ways to mitigate these costs. The best thing you can do is consult the services provided by your local senior center (also called an area agency on aging). These agencies offer programs such as meals on wheels, senior classes and family respite. Find your local AAA here.
Also, consider deliberately choosing to live in a state with better than average services and environments for older adults. There’s a wonderful resource on the AARP website for evaluating states who have their act together in creating supportive environments for older adults. It’s a state scorecard on long-term services.
Also, determine if there are already communities or services that you can tap into. For example, check out the Village movement. The Villages are communities that come together to pool financial and volunteer resources to support older adults. See if there’s one near your parents and/or consider starting one in your area.
Consider ways to alter your existing home to make it more accessible. For example, you can replace home entry steps with ramps, and bathroom grab bars with towel racks. Just doing a few things to prevent falls can be a very cost-effective way to extend your time at home, and your money.
Families are the backbone of the long-term care system in this country, but their work is harder than it should be. It’s important for us all to be aware of our options for how to pay for home care, and how to work together in community to make old age easier on everyone.