In-home care: while it’s one of the most helpful types of care available, it can also be a financial stressor. More than a few people have had the experience of waking suddenly in the middle of the night, panicked about how they’ll pay for their in-home care and what will happen if they can’t manage it.
For people who are injured, ill, or aging, and can’t manage all of the tasks of daily living on their own anymore, in-home care can be a lifesaver. In addition to taking the burden of caring for an aging loved one off friends and family members, in-home care also serves to enhance the quality of life and provide critical medical assistance in the place where a person is most comfortable – his or her home.
If you’re starting to think about how you’ll pay for in-home care, or you’re already struggling to make ends meet, here are ten creative ideas to cover the cost. Read on.
First Things First – Is In-Home Care Expensive?
There’s no one-size-fits-all formula for calculating the cost of in-home care. Prices vary widely depending on where you live, what type of care you need, and the skill level of the person you’d like to hire. According to Caring.com, home health aides made an average of $16-$29 hourly in 2011, and home healthcare costs are only rising by an average of 1.15% annually.
Depending on your level of need and your financial circumstances, in-home care may be a simple thing to afford. On the other hand, though, it may be a financial stressor, and you may be looking for ways to make it work more easily for your family.
10 Creative Ways to Cover the Cost of In-Home Care
Regardless of what your needs may be, these ten simple tips can help you cover the cost of in-home care and get the attention you deserve.
1. Get long-term care insurance
Long-term care insurance is insurance that is designed to cover the cost of things like long-term nursing, admittance to an assisted living facility, ongoing medication, and more. While not all long-term care policies cover in-home care, some do, and it’s an avenue that’s well worth exploring.
The only negative factor about long-term care is that most policies have a disqualifying age, after which you cannot purchase the insurance. Because of this, you must plan to purchase long-term care insurance while you’re still healthy. This will allow you to take advantage of the policy when you eventually need it to cover in-home care.
2. Use annuities to your advantage
Annuities are one thing that few people think of to pay for in-home care, but they can be instrumental in helping make the cost more manageable. A hybrid between a personal investment account and an ongoing insurance plan, annuities represent money that a senior has invested and earns interest for. After the money has matured for a given period, the senior can begin making withdrawals.
In addition to helping seniors grow their money, annuities are designed to help cover the costs of living as a senior ages, since they pay a consistent income stream for a set number of years, or until the senior dies.
Annuities sums aren’t viewed as assets when a senior applies for Medicaid, and the income earned from them is often enough to cover the cost of in-home care and more.
3. Apply for Medicaid and use its benefits to pay for in-home care
Medicaid is a program designed to help low-income seniors cover their health needs. While Medicaid coverage laws vary depending on the state you live in, all Medicaid plans are designed to cover in-home care for at least a short period.
In some cases, Medicaid may even cover long-term in-home care, if the person utilizing it would otherwise be in a nursing home.
4. Consider applying for a reverse mortgage
While few people know this, reverse mortgages were developed to help seniors stay at home for as long as possible. Here’s how a reverse mortgage works: once a senior has paid a significant amount of equity into his or her home, he or she can start taking some of that equity out, in the form of lump-sum or ongoing payments.
While reverse mortgages can be ideal for some seniors, they do have parameters that can rule some people out. Here’s what they require:
- The senior must be 62 or older
- The senior must own his or her home, either free-and-clear or with little money left on the loan
- The bank that issues the reverse mortgage appraises the home and determines payment values based on a loved one’s age and payout requirements
5. Look into using veteran’s benefits
If you were an armed forces members, you might be able to use military benefits to cover the cost of your in-home care. The only downside of this approach is that the U.S. Department of Veterans Affairs is notoriously difficult to navigate, and you may find yourself working very hard to get the benefits you’re owed. While you’ll have to contact a representative to understand your individual eligibility, here are the policyholder parameters for veteran’s benefits:
- You must have served at least 90 days of active duty
- One of those days must have been during wartime
- You must have been honorably discharged
If you meet these requirements, you may be eligible to receive disability payments that can help you cover the cost of your in-home care.
6. Look over your life insurance policy
If you have life insurance, you may find that it can be used to cover your in-home care. If you don’t have dependents that will rely on the life insurance, consider dipping into your policy and using “accelerated” benefits to cover the cost of your in-home care.
Accelerated benefits are features of certain life insurance policies that allow the policy holder to take advantage of the insurance benefits within their policy before death. Ideal for paying for in-home care, these benefits are typically reserved only for those who need ongoing in-home care or have been disabled by chronic conditions.
If you have a life insurance policy and no dependents relying on it, consider this option. As a rule, insurance policies will allow holders to pull out between 25%-100% of their death benefit as an accelerated benefit.
7. See if Medicare is right for you
While it’s tough to get Medicare coverage to provide for your in-home care, it is possible, and it’s worth evaluating. Medicare is issued when a person leaves a hospital or long-term-care facility. In some cases, those benefits can extend to covering the cost of in-home care as a form of rehabilitative therapy.
Keep in mind, though, that these benefits can be limited and may not be right for everyone.
8. Pool resources within the family to cover the cost of in-home care
If none of the above options appeal to you, you can consider pooling resources within your family. Things like collective sibling agreements and personal savings can go a long way toward covering the cost of in-home care and are some of the most common options people take when considering how to offset the expense.
9. Develop an in-home care savings fund
Many people have savings funds for medical emergencies, vacations, and more, so why not establish one to cover the cost of in-home care. While this takes some planning and dedication, it can be a straightforward and stress-free way to cover the cost of in-home care down the line.
10. Sell off assets
For some seniors who don’t have dependents or people relying on inheriting assets, selling assets can be a functional way to get the extra funds required to cover the cost of in-home care. Of course, this approach depends entirely on the senior’s unique circumstances, and won’t be right for everyone.
The Case for In-Home Care
For seniors who can no longer care for themselves alone, in-home care can be a wonderful way to enhance quality of life and ensure safety and happiness for years to come. It can be expensive, though, and these ten tips can help offset the cost and make it easier for you and your family members to cover the expenses associated with in-home care.