Prior to a discussion of home care payment options, it is helpful to differentiate between home care and home health care.  Home Care Aides provide custodial care or non-medical care, helping seniors with their activities of daily living such as bathing, dressing, housekeeping and transportation.  Home Health Aides offer skilled care such as checking patients’ pulses, temperature or respiration. They assist with medications, braces, ventilators and other medical equipment and can provide higher level skilled nursing as well.

 

Both home care aides and home health aides bill on an hourly basis.  Home care aides can be retained through a home care agency or by hiring private caregivers.  Home health aides experience greater federal regulation and are almost always hired through an agency.  

A home care aide will typically visit an individual several times a week for periods lasting from 2-8 hours.  Nationwide in 2013, the average hourly amount being paid for non-medical home care is $18.   The average hourly rate in different state ranges from $14 - $25.  It should be noted that these are average costs from home care agencies.  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.

Home Health Aides will visit the home as much as medically necessary; typically for shorter periods of time than home care aide visits.  In 2013, nationwide, the average hourly fee is $19 and different state averages range from $15 - $25.  Interestingly, this represents a 10% drop in the average cost from 2012. 

Alzheimer's care at home can be affordable and relatively low cost when compared to residential care. Typically home care providers do not charge additional fees to care for individuals with Alzheimer's.  This is not the case in senior living residences where Alzheimer's and dementia care usually costs an additional $1,150 per month.

Find affordable home care, see a table of the average cost of home care and home health care by state or use our home care vs assisted living calculator.

Home care aides provide personal care rather than medical care.  Therefore, health insurance and Medicare do not help with these costs.  Families most commonly use Social Security, veterans and other pensions, savings and / or their home equity through a reverse mortgage to pay for care.  Long term care insurance, for the less than 5% of seniors who have it, will also pay for home care provided the plan has an allowance for non-medical personal care.   Life insurance policies are used as a funding source as well.  They can be surrendered for their cash value or converted to cash by using a life settlement.  

Home health care costs, on the other hand, are considered medically necessary and therefore they are covered, at least in part, by Medicare and other health insurance programs.

It is beneficial to group the forms of financial or care assistance that can be used to reduce the costs of home care into several categories.  You may wish to use the Home Care Financial Resource Locator Tool to automatically determine which of these programs are available and relevant to your current situation.  Alternatively, you can explore these programs and options by clicking the links below. 

1.     Federal Programs (non-Medicaid) – These are federally managed options that provide financial or care assistance, or they cover some of the cost of home care.

Cash and Counseling Program Lifespan Respite Care Program Medicaid Medicare Medicare Savings Programs Social Security

SSI State Supplements Supplemental Security Income Survivors’ Benefits Veterans Health Care Veterans Pensions

2.     Cost of Living / Care Reductions – These programs and tax credits can reduce a family’s tax burden or reduce the hours of care required effectively lowering the overall cost of care.

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

 

3.     Asset Conversion Programs – These options provide families that have non-liquid assets with a method by which to convert those assets to help pay for care.

Accelerated Death Benefit Death Benefit Loans Equity Key Family / Friends Loans Home Equity Line Of Credit

Life Settlements Reverse Mortgages Rex Agreements Viatical Settlements Life Care Assurance Benefit

 

4.     Non-Profit Assistance – For qualified individuals, these programs provide financial assistance and / or respite care.

Alzheimer’s Respite Care Cancer Co-Pay Assistance CFAC: Cancer Assistance

Financial Aid for Kidney Patients Leukemia & Lymphoma Society Aid

5.     State Programs – These are options managed by the states that provide financial assistance or cover some of the cost of home care.

Arizona NMHCBS California In-Home Supportive Services Colorado Old Age Pension Connecticut CHCPE Florida CCE Program Florida HCE Florida OSS For Seniors Hawaii Kupuna Care Idaho Homemaker Services Illinois Circuit Breaker Tax Relief Illinois Community Care Indiana CHOICE Kansas Senior Care Act Maine Home-Based Care Maryland In Home-Aide Services Maryland Senior Care Program Massachusetts HCP and ECOP Programs

Minnesota Alternative Care New Hampshire Transitions in Caregiving New York Expanded In-home Services for the Elderly (EISEP) Nevada CHIP and COPE New Jersey JACC Program North Carolina Project C.A.R.E.    North Carolina SA / In-Home Program for Adults    Tennessee OPTIONS for Community Living Texas CCAD Program Texas Community Attendant Services Texas DADS Services to Assist Independent Living Texas In-Home and Family Support Utah The Alternatives Program Virginia Adult Services Washington Nurse Delegation Program West Virginia Family Alzheimer’s In-Home Respite  West Virginia Lighthouse Program Wisconsin COP Wisconsin SSI-E Wyoming CBIHS

6.     Medicaid Programs – Often labeled “nursing home diversion” programs, the intent of most of these programs is to minimize nursing home placement and instead help the elderly remain living at home.  These programs will usually pay for home care provided it can be obtained at a lesser cost than nursing home care.  Click here for a State by State Guide to Medicaid Home Care.  Some of these program pay family members and relatives for caregiving.  However, it should be noted that there are very strict financial eligibility requirements for Medicaid.  Assistance is available qualifying for Medicaid.

The Home Care Financial Resource Locator Tool consists of a series of questions that are used to narrow down the many options in our database to only those that are relevant to your specific situation.  Those options and resources for which you are not eligible are also included in a separate column so that you will have a comprehensive picture of the available options and you can determine for what reason you are not eligible.  Click here to use Home Care Financial Resource Locator Tool

Since many families pay for home care from their savings, they are in a state of continuously diminishing resources.  Many assistance programs determine eligibility based on an individual’s resources.  Therefore, the assistance available to an individual is constantly changing.  In other words, the longer a person requires (or is projected to require) home care, the more assistance that becomes available to them.

For this reason (and others), it is advantageous to develop a long term financial plan when considering home care.  Doing so has the dual benefit of ensuring a comfortable and consistent aging process for your loved one while at the same time preserving your family’s assets and resources.  

The creation of a financial plan for home care is a complicated process and must accommodate various health scenarios.  Fortunately, there are resources available to help families with financial planning for home care.  Each resource has its pros and cons.   

•    Public Benefits Counselors – local agencies such as Area Agencies on Aging and Aging and Disability Resource Centers have benefits counselors on staff that often can help with financial planning.   While they typically do not charge for their assistance, they are often under-staffed and unable to provide adequate long term planning.  They also tend to be highly knowledgeable about local programs but may not have the larger financial planning experience.  Find your local Agency on Aging or Aging and Disability Resource Centers.

•    Geriatric Care Managers – GCMs help families create and implement long term care plans and, as a part of that, some will help on the financial planning side.  Since GCMs are typically paid for out-of-pocket, one can expect a higher level of attention than one might receive from a public benefits counselor.  Families tend to contact GCMs only after the need for care has become apparent and therefore GCMs are not in the best position to do long term planning.  Often GCMs come from nursing or public health backgrounds and do not have extension financial experience.  Find a Geriatric Care Manager.

•    Eldercare Financial Planners – Financial planners have the highest level of professional experience and are the most expensive option.  They are very knowledgeable with long term planning but may be less aware of local programs, short term options and ways to reduce the cost of care.  Find an Eldercare Financial Planner.

There is a great deal of variation in the cost of home care not just amongst the states but even in the same geographic area within a state.  A recent study found in most areas, there are care providers who charge as much as 50% below or above the average hourly rate for that area.  This means the choice of care provider is a major factor in affording long term care at home.  It is difficulty and time consuming to contact each care provider in the area and determine their rates.  For this reason, we've partnered to provide a free service that helps families find the most affordable home care in their area.

 

 •    Home care aides are also referred to as personal care aides, caregivers, companions, and personal attendants.

•    Home health aides are also referred to as nurse aides, nursing assistants, certified nursing assistants and geriatric aides.

This table contains the average hourly cost of home care aides and home health aides for all 50 states and D.C.  In addition, it contains our experimental home care affordability index* which considers the cost of home care in a state relative to the median household income.  The state’s ranking out of 50 states and Washington D.C. is contained in the final column.

2013 Home Care Costs and Affordability
State	Home Care Aide Hourly Rate	Home Health Aide Hourly Rate	Home Care Affordability Index (Lower #s are more affordable)	State Ranking*(Lower #s are more affordable)
United States	$18	$19	.74	n/a
Alabama	$16	$16	.75	14
Alaska	$25	$25	.87	45
Arizona	$19	$20	.80	29
Arkansas	$17	$17	.82	35
California	$22	$23	.84	41
Colorado	$21	$22	.73	8
Connecticut	$19	$21	.61	3
Delaware	$20	$22	.77	19
Florida	$18	$19	.82	34
Georgia	$17	$18	.76	15
Hawaii	$24	$25	.83	39
Idaho	$19	$19	.80	27
Illinois	$19	$21	.79	23
Indiana	$18	$19	.83	40
Iowa	$20	$21	.82	33
Kansas	$18	$19	.80	29
Kentucky	$17	$18	.88	49
Louisiana	$14	$15	.71	7
Maine	$21	$22	.87	43
Maryland	$19	$20	0.57	2
Massachusetts	$23	$24	.74	13
Michigan	$19	$20	.80	26
Minnesota	$21	$25	.80	24
Mississippi	$17	$17	.83	36
Missouri	$17	$18	.76	17
Montana	$20	$21	1.02	51
Nebraska	$19	$22	.74	11
Nevada	$20	$21	.87	46
New Hampshire	$22	$24	0.70	6
New Jersey	$21	$21	.67	5
New Mexico	$19	$20	0.93	50
New York	$20	$22	.83	38
North Carolina	$17	$18	.77	21
North Dakota	$23	$23	.82	32
Ohio	$18	$19	.83	37
Oklahoma	$18	$19	.76	16
Oregon	$20	$21	.80	25
Pennsylvania	$19	$20	.78	22
Rhode Island	$20	$23	.88	48
South Carolina	$17	$18	.87	47
South Dakota	$20	$20	.85	42
Tennessee	$17	$17	.80	30
Texas	$18	$18	.73	10
Utah	$20	$21	.74	12
Vermont	$21	$24	.87	44
Virginia	$17	$18	0.56	1
Washington	$22	$22	.77	20
Washington D.C.	$18	$19	.67	4
West Virginia	$16	$16	.77	18
Wisconsin	$20	$22	.81	31
Wyoming	$20	$20	0.73	9

*Data provided by Genworth Financial, Inc. (NYSE:GNW) and the US Census Bureau