How to Estimate and Pay for In-Home Care

When a parent starts needing regular help at home, one of the first questions families ask is: how much will this cost, and who pays? The honest answer is that it depends heavily on how many hours of help are needed, where your parent lives, and which programs they qualify for. Many families are also surprised to learn that Medicare, which covers so much else, generally doesn't pay for ongoing day-to-day care at home.

This guide explains how to build a realistic estimate and walks through the main ways families pay. It's an organizing guide, not financial or legal advice. Rules vary by state and change over time, so always check with the official programs listed below.

First, be clear about what kind of help is needed

"Home care" covers two quite different things, and the difference matters for who pays.

• Skilled home health care is medical care ordered by a doctor, such as nursing or therapy, provided by a certified home health agency.
• Non-medical or custodial care is help with daily activities such as bathing, dressing, meals, housework and companionship. This is what most families mean by "home care," and it's what most long-term help at home looks like.

Medicare.gov uses the term "long-term care" for this kind of ongoing non-medical help, whether it's provided at home, in the community, in assisted living or in a nursing home.

Step 1: Estimate the hours

Before you look at rates, work out the hours. Go through a typical week and list the tasks your parent needs help with and when they happen. Morning help getting washed and dressed might take an hour; meal preparation and a check-in at lunch, another hour; evening help, another hour or two.

Note which tasks family members will reliably cover and which will need paid help. The result is a weekly number of paid hours, which is the core of any estimate. Our weekly schedule printable makes this easier to lay out.

Step 2: Get local rates

Home care rates vary a lot by area and by type of provider, so national averages are a weak guide. Instead:

1. Call two or three local home care agencies and ask for their hourly rates, any minimum visit length, and whether nights, weekends or holidays cost more.
2. Ask what's included, such as training, supervision and backup when a regular aide is off sick.
3. If you're considering hiring a caregiver directly rather than through an agency, ask a tax or legal adviser what responsibilities you would take on as an employer before you do this.

Plug the hours and rates into our home care cost tool to see a weekly and monthly estimate, then try a few scenarios, such as more hours later in the year. Record everything in our budget printable so the whole family sees the same numbers.

Step 3: Understand the main ways families pay

The National Institute on Aging (NIA) describes three broad sources of money for long-term care: personal funds, government programs, and private financing such as long-term care insurance. Most families end up combining more than one.

Private pay

Many older adults pay for some or all of their long-term care with their own money, according to NIA. That can include savings, pensions and retirement accounts, investment income, or proceeds from selling a home. Family members sometimes contribute too. If they do, agree how contributions will be recorded so there are no misunderstandings later.

Long-term care insurance

Long-term care insurance is a private policy designed to help pay for this kind of care, and Medicare.gov notes it's something people can choose to buy. If your parent already has a policy:

• Find the policy documents and contact the insurer to ask exactly what's covered at home.
• Ask about the "elimination period" (a waiting period before benefits start), daily or monthly limits, and what evidence of need the insurer requires.
• Ask whether the policy requires care from a licensed agency, or whether it will pay for other caregivers.

NIA notes that premiums tend to be higher for people who are older or have health problems, so buying a new policy late in life may be expensive or not possible.

Medicaid home and community-based services

Medicaid is a joint federal and state program for people with limited income and assets who meet other eligibility requirements, and NIA notes that eligibility varies by state. Medicare.gov says people may be able to get long-term care through Medicaid, subject to their state's rules.

Many states provide in-home help through Medicaid home and community-based services (HCBS), often under what are called 1915(c) waivers. According to Medicaid.gov, these waivers let states pay for services such as case management, homemaker help, home health aides, personal care, adult day health services and respite care so that people can be supported at home or in the community instead of in an institution. States design their own programs, and services, eligibility and waiting lists vary.

To find out what's available, contact your state Medicaid agency or your local Area Agency on Aging. The Eldercare Locator (eldercare.acl.gov or 1-800-677-1116) can point you to local help.

VA benefits, including Aid and Attendance

If your parent is a veteran or the surviving spouse of a veteran, check VA benefits. VA Aid and Attendance provides monthly payments added to a VA pension for qualified veterans and survivors. According to VA.gov, your parent may be eligible if they get a VA pension and meet at least one of several requirements, such as needing another person's help with daily activities like bathing, feeding or dressing. There's also a separate Housebound allowance; you can't receive both at the same time.

VA.gov explains how to apply online, by mail using VA Form 21-2680 (which a medical examiner must complete), or in person at a VA regional office. VA.gov also explains how to get help from an accredited representative.

What Medicare generally does and doesn't cover

Medicare.gov states plainly that Medicare doesn't pay for long-term care, and that most health insurance, including Medigap, doesn't either.

Medicare does cover home health services in specific circumstances. According to Medicare.gov, your parent must need part-time or intermittent skilled care, be homebound, and have care ordered by a doctor or other provider from a Medicare-certified home health agency. Medicare.gov lists what it does not cover at home, including:

• Round-the-clock care at home
• Home-delivered meals
• Household help like shopping or cleaning that isn't related to the care plan
• Custodial or personal care, such as help with bathing or dressing, when that is the only care needed

So if a parent needs a few weeks of skilled nursing after a hospital stay, Medicare may help. If they need ongoing help getting dressed and making meals, Medicare is unlikely to pay for that on its own.

Other options to ask about

NIA also mentions options such as PACE (Programs of All-Inclusive Care for the Elderly, available in some states), reverse mortgages, certain life insurance features, and annuities. These can have significant long-term consequences, so get independent advice before using them.

Step 4: Put it together in a plan

Once you know the likely cost and the possible sources of help:

1. List each funding source, what it might cover, and what you still need to confirm.
2. Note deadlines and paperwork for each application.
3. Assign one person to keep track of applications, bills and receipts.
4. Share the budget with everyone involved, including your parent wherever possible.
5. Review it regularly, because needs and costs both change.

Our family meeting agenda printable is a good way to walk relatives through the numbers together.

Where to get trusted help

• Eldercare Locator: eldercare.acl.gov or 1-800-677-1116, for your local Area Agency on Aging
• Medicare: medicare.gov
• Medicaid: your state Medicaid agency, via medicaid.gov
• Veterans: va.gov, including its help with finding an accredited representative
• Legal and financial advice: an elder law attorney or a qualified financial adviser for decisions about assets, insurance and benefits

Paying for care is rarely simple, but a clear estimate and a written list of options turns a frightening unknown into a set of practical next steps.