When they reach retirement age, many senior citizens want to continue to live independently in their own homes. However, this can become difficult when they need care and assistance due to chronic health conditions, dementia, disabilities, or general physical and cognitive decline that comes with the aging process. In order to stay at home safely, some seniors may need someone to provide the personal care, assistance, and supervision they need. The best care option for seniors who want to stay at home is senior home care from a professional home care agency like Assisting Hands Home Care.
At Assisting Hands Home Care, we provide senior home care for seniors who want to age in place in BallenIsles, Boynton Beach, North Palm Beach, Jupiter, Palm Beach, Palm Beach Gardens, Royal Palm Beach, Singer Island, Wellington, West Palm Beach, FL and the surrounding areas (See All Served Areas). Our experienced caregivers will provide professional care to meet the specific needs of your loved ones so they can live safely at home.
Our senior home care services area great option for seniors who want to continue living at home, but we also understand that the cost of home care can be a lot for many families. Fortunately, there are many different ways to pay for senior home care to ensure that your senior loved ones get the care they need to live at home. This guide discusses the options available to help you and your family pay for in-home care.
The Cost of Home Care
The cost of non-medical home care will vary depending on the level of care needed and the amount of time your loved one needs a caregiver in the home. According to Genworth’s Cost of Care Survey, the national median cost of non-medical home care is $26 per hour as of 2021. If your family has decided that it is time to get home care for a senior loved one, it is crucial to consider the cost of care and explore the many options available to cover the costs.
The following are the main options for covering the cost of senior home care:
1. Personal Asset Pay
A lot of families cover the cost of home care by simply paying with money from their personal assets. This can be done with savings from private bank accounts, and some may also use money from individual retirement accounts (IRAs), health savings accounts (HSAs), investments, pensions, annuities, real estate, and Social Security benefits. Reverse mortgages and collective sibling agreements can also help families pay from their personal assets for home care.
The following are some options to consider to help pay for home care:
1.1 Collective Sibling Agreement
When seniors need care at home, their adult children may help them cover the cost of care. Adult siblings can develop an agreement among themselves to contribute to the cost of home care for their senior parents. This agreement can set the terms for splitting the cost among the siblings, either dividing the cost into equal parts or designating one or some of the siblings who can afford it to cover the cost. If only some of the siblings will contribute, the agreement may stipulate that the siblings who contributed will be reimbursed first when the inheritance is distributed. It is important to maintain accurate records of how much each sibling has contributed to ensure that they are correctly reimbursed. It is also highly recommended that the family maintains accurate records of the expenses.
1.2 Reverse Mortgage
Reverse mortgages were originally created by the federal government to help seniors stay in their homes. Seniors can use reverse mortgages to get the value of the equity of their home in cash in one payment or in monthly payments. The amount of equity that seniors can receive from their home increases over time, and seniors can continue to collect this money, even if the money they get exceeds the worth of the home. A senior will never have to move out of his/her home to pay a reverse mortgage, but when the senior passes, the loan must be repaid. Oftentimes, the loan is repaid by selling the home.
There are some conditions that must be met to receive a reverse mortgage. The person getting the reverse mortgage must be at least 62 years old and either outright own their home, or have a small amount left on the original loan. Before receiving payments from a reverse mortgage, all loans that hold the home as collateral must be paid. The value of the reverse mortgage is decided by the bank based on the home’s worth and the applicant’s age. The money from a reverse mortgage can be used to help seniors pay out of pocket for home care.
Reverse mortgage loans are a great resource, but some have strict rules when it comes to homeowner’s insurance, mortgage insurance, and home maintenance which may make them easy to default. Make sure your loved one uses a reputable bank or mortgage broker and is aware of all of the terms of the contract.
An annuity is a fund in which one can invest money at a fixed or variable interest rate, and withdrawals can be made from this account once it reaches an agreed upon maturation date. Seniors can use annuities to create a steady income from their pension or retirement savings. The money they receive from the annuity can be used towards home care among other personal expenses. Another important note about annuities is that the amount of money invested into the account is not considered an asset if the senior applies for Medicaid. The income paid out from an annuity is however considered an asset by the government.
If your senior loved one is interested in an annuity, make sure they get one from a reputable financial institution and work with a representative that has their best interests at heart. Some seniors have been scammed with annuities from unscrupulous representatives.
2. Long Term Care Insurance
Long-term care (LTC) insurance is a type of private insurance plan that helps cover the costs of home care and assisted living. How much LTC insurance will cover depends on the individual plan.
When applying for LTC insurance, make sure that the plan includes an allowance for non-medical home care. With some policies, the insurance provider may pay a licensed home care agency, like Assisting Hands Home Care, directly or refund the policy holder for the expense of home care.
It is important to plan ahead regarding LTC insurance because it can be difficult for seniors to get it once they pass a certain age. Those applying for coverage in their 50s and 60s are more likely to get LTC insurance and their premiums will be quite low. However, according to the American Association for Long-Term Care Insurance, more than half of those 75 and older who applied for LTC insurance were declined. Therefore, older adults should apply for LTC insurance while they are still relatively young (50s and 60s) to have it in place to help with future home care costs.
3. Private Insurance Options
Private insurance plans may cover some aspects of home care, but this will depend on the type of coverage in the policy. Individual health care insurance policies do not usually cover non-medical home care and may only partially cover the cost of skilled in-home care. Therefore, basic health care insurance may not be the best private insurance option to cover home care.
The following are the best options for covering the cost of home care through private insurance:
Cashing Life Insurance Policy
Life insurance policies are usually taken out to pay the family members of the policy holder when they pass away. However, those who own life insurance policies can either take a loan from the value of the policy or exchange the entire policy for its cash value which can then be put towards home care.
Life insurance policies can include an “accelerated death benefit” rider which takes a cash advance from the total benefit amount and gives it to the policy holder. To be eligible for this rider, the policy holder must be unable to perform basic activities of daily living (ADLs) or be terminally ill with a life expectancy of under 24 months. Physician statements and medical records will be needed to prove illness or loss of function before receiving the advance. Taking the cash advance does not end the policy, so policy holders must continue to pay the premiums to ensure their beneficiaries will receive what is left of the benefit amount.
Another option with life insurance policies is to sell the policy to a third party for cash. The third party that purchases the policy will assume the premium payments and receive the benefit amount upon maturity. The cash received from selling a life insurance policy can then be put towards home care. Seniors also have a choice of converting their life insurance policy into a certain dollar amount of home care as a “long-term care” or “life care” benefit account. With this option, the senior’s eligibility for Medicaid will not be affected if done properly.
4. Veterans Benefits
Seniors who are veterans of the U.S. armed forces, as well as spouses of U.S. veterans, may be eligible for health benefits or a pension from the Department of Veterans Affairs (VA) to help pay for home care. In general, veterans must have served for more than 90 days of active duty with at least one day during wartime and an honorable discharge to be eligible for VA benefits.
4.1 VA Health Benefits
Veterans and their spouses may be able to get coverage for home care through the Veterans Health Administration (VHA) Standard Medical Benefits Package. Veterans who meet the requirements for these benefits will have access to the following programs than can cover some of the costs of in-home care: VA’s Skilled Home Health Care Services (SHHC), Homemaker and Home Health Aide Services (H/HHA), and Home-Based Primary Care.
4.2 VA Pension Benefits
VA Pension Benefits are available for veterans and the spouses of veterans who need long-term help with activities of daily living (ADLs). The benefits are also known as “aid and attendance” or “housebound” benefits, which are monthly disability payments that can be used to cover the costs of home care.
Documentation from a doctor is required to qualify for aid and attendance payments and the amount is calculated based on the level of disability of the applicant. Once the veteran is approved to receive these benefits, they may continue to receive these benefits until the end of their life.
4.3 Applying for Veterans Benefits
Unfortunately, the process to qualify for veterans’ benefits is quite complex which turns some people away. In fact, only a small number of eligible veterans actually receive the benefits they are entitled to because many are either unaware of the benefits available to them or how to apply for them.
In addition to the conditions outlined above, including service time and a dishonorable discharge, there are several other things that are considered to determine eligibility, including income and asset limits. This increases the complexity of the application process. Senior veterans and their families can get help with the application process from Veterans Service Organizations (VSOs). These organizations by law are not allowed to charge for their services, therefore it is free for families to enlist their help in applying for VA benefits.
Medicaid is health coverage provided through a joint state and federal program to low-income seniors. The state administers the benefits which means that the rules for Medicaid eligibility and uses will vary between states.
Depending on the state in which the applicant lives, Medicaid should cover non-medical home care, home health care, and other in-home support. However, Medicaid typically limits long-term home care coverage to those with severe physical or cognitive limitations that would require them to end up in a nursing home otherwise. For those who are eligible for Medicaid to cover home care costs, it will only cover in-home care from a Medicaid-certified home care agency.
Visit Benefits.gov for more information about the eligibility requirements for Medicaid in the State of Florida.
5.1 Home and Community-Based Services (HCBS) Waivers
Home and Community-Based Services (HCBS) waivers are programs that expand Medicaid benefits to cover long-term care for seniors who would have to live in a nursing home without these services. HCBS is not a part of Medicaid but is funded by Medicaid through waivers of normal Medicaid rules.
These programs provide long-term coverage for non-medical home care that is not usually covered by Medicaid. Those who are eligible will also continue to receive coverage if their medical condition stabilizes with the goal of helping them avoid leaving their home for a nursing home. HCBS programs can cover the following:
- Help with activities of daily living (ADLs) including bathing, dressing, eating, toileting, and more
- In-home healthcare including physical therapy and nursing care
- Meal preparation, cleaning, laundry, and other household tasks
- Meal delivery services
- Adult day service center activities
- Transportation to and from doctor appointments and other engagements
- Assistive devices and medical equipment
- Minor home modifications including installing safety rails and widening doorways for wheelchair access
There are two main considerations when determining if an applicant is eligible for an HCBS waiver program. The first consideration is the level of care needed. The applicant will be evaluated to assess their need for medical care and/or assistance with ADLs. If the care needed is extensive enough that the applicant would have to go to a nursing home without it, they will meet the care needed requirement.
The second consideration is the applicant’s financial situation. The income and assets of the applicant must be below a certain level to qualify, but these levels are much higher than those required to be eligible for regular Medicaid. Certain assets that are typically counted for Medicaid coverage, including the value of the applicant’s home and anything they may have that is in their spouse’s name, are not counted for the HCBS waiver program.
5.2 Medicare Advantage
Medicare Advantage (MA) plans are health care plans provided by private insurers as an alternative to traditional Medicare. Starting in 2019, MA plans can provide what are called “supplemental health care benefits” that do the following:
- Reduce the possibility of needing emergency or health care
- Prevent or care for an injury
- Compensate care for a functional need
This means that MA plans can be used to cover in-home care including personal care assistance, palliative care, non-medical and medical transportation, and home modifications to help with aging. These plans can also cover non-health related care for those with chronic conditions such as dementia. For this type of care to be covered, it must be reasonably expected to improve and maintain the functioning and health of the individual.
Whether a senior receives benefits from traditional Medicare coverage or an MA plan, the care will only be covered if provided by a home care agency that meets the quality standards of Medicare.
6. Additional Programs
The ways to pay for home care listed above are the most commonly used methods. However, there are some other programs that can help seniors cover the costs of home care.
6.1 State Non-Medicaid Programs
In many states, there are state home care assistance programs available for low-income seniors not eligible for Medicaid. Some states, including the State of Florida, offer multiple in-home assistance programs and the benefits offered vary depending on the individual program.
The goal of these programs is to help individuals avoid nursing homes by providing assistance with home care services and respite care, non-care based in-home support, home modifications, and adult day care. Those who are eligible may receive cash assistance for home care or receive care directly from the program.
The following are the state non-Medicaid programs available in Florida:
- Project R.E.L.I.E.F
- Alzheimer’s Disease Initiative
- CCE Program
- Home Care for the Elderly
- Local Services Program
6.2 Supportive Services through the Older Americans Act
The Older Americans Act (OAA) provides federal funding for home and community-based services throughout the U.S. Funding from the OAA goes directly to resources and programs that help seniors save costs on home care. A nationwide network of Area Agencies on Aging (AAAs) is also established under the OAA. The AAA network consists of public and private non-profit agencies that address the needs and concerns of seniors at the local and regional level. Local AAAs can inform seniors on the supportive senior services available in their communities that can help them reduce their homecare costs.
The Program of All-Inclusive Care for the Elderly (PACE) is a new program that provides home and community care for frail seniors who would need to live in a nursing home without it. However, PACE is not available everywhere and only low-income seniors are eligible.
Senior Home Care from Assisting Hands
Home care services are ideal for seniors who want to continue to age in place but need some care and assistance to do so safely. Assisting Hands Home Care provides non-medical home care services tailored to the specific needs of your loved ones in Palm Beach, FL and the surrounding areas. We will assess your loved one’s care needs and create a comprehensive care plan that includes help with activities of daily living (ADLs), non-emergency transportation, meal preparation, light housekeeping, and more. Our caregivers will provide the best possible care while treating your loved ones with compassion and respect.
At Assisting Hands Home Care, we know that paying for home care services is not easy for many families. We hope that the resources listed above can be of help when planning how to cover the cost of home care for your loved ones. If you are interested in home care services from Assisting Hands Home Care, talk to one of our professionals about how the resources listed above can help cover the cost of care.
You can call Assisting Hands Home Care at (561) 566-5989 to set up a free in-home consultation.