According to a 2022 survey on home care billing rates, the median cost of care for the Northeast was $32 per hour. Since then, and due to the general labor shortage in health care, many agencies have had to increase their rates to attract and retain quality caregivers. Private individuals can be retained to provide most of the same services with fees that are 20% – 30% lower. However, these independents 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.
Options to Pay for Care
Navigating the costs of senior home care can be challenging, but there are several options available to help cover these expenses and many seniors use a combination of these options to provide care for themselves or loved ones.:
- Personal Savings and Assets
Many individuals use their savings, retirement funds, or other assets such as real estate to pay for home care services. This approach offers flexibility and control but requires substantial financial resources.
- Long-Term Care Insurance
Long-term care insurance is specifically designed to cover home care, assisted living, and nursing home care. Policies vary, so it’s important to review terms and conditions to understand coverage limits and exclusions.
- Veterans Benefits
Veterans and their spouses may qualify for home care assistance through programs like the Veterans Aid and Attendance Pension Benefit, which helps cover the costs of personal care and homemaker services.
- Reverse Mortgages
A reverse mortgage allows homeowners aged 62 and older to convert part of their home equity into cash without having to sell their home. This can provide funds to pay for home care, but it reduces the home’s equity and may affect inheritance. Please consult your financial advisor on if this may be appropriate for you.
- Life Insurance Policies
Certain life insurance policies can be converted into cash or used to pay for long-term care through mechanisms such as accelerated death benefits or life settlements. Consult with a financial advisor to understand the implications.
- Family Support
In many cases, family members contribute to the cost of home care, either through direct payments or by sharing caregiving responsibilities. This can be an emotionally and financially viable solution but requires clear communication and planning.
Each of these options has its own benefits and limitations, and often, a combination of methods is used to cover the full range of home care costs. Consulting with a financial advisor or care coordinator can help determine the best approach for your specific situation.
