Home health can be expensive—and many people find navigating the various payment options confusing. Here’s a look at some of the most common ways to pay for home health care.
Medicare
Medicare covers intermittent, skilled home health—provided a person meets all the eligibility requirements. The services must be prescribed by a doctor, and the person must be homebound.
What counts as homebound? As Johnson puts it, “it has to do with can you get yourself out of bed? Can you reasonably get to a doctor’s office or a therapy clinic without putting yourself in danger? When a senior meets that definition of being homebound, Medicare will pay fully, pretty much, with no deductibles, for a home health agency to provide skilled care.” That coverage includes skilled nursing care like wound care, occupational therapy, physical therapy, medical social services and speech-language pathology.
As soon as a patient is no longer homebound, they’re no longer eligible for this coverage. At that point, most people turn to private payments or use long-term care insurance to cover the costs of their continued needs, says Johnson.
Medicare Advantage
Medicare Advantage (Part C) offers plans for seniors that cover unskilled care, such as assistance with bathing and cooking. “But essentially, you’re still paying for it,” says Johnson, because these plans, which are sold by private insurance companies, come with varying premiums, deductibles and other payments. (With that said, there’s typically an out-of-pocket limit to which the plans must adhere.)
If you have a Medicare Advantage plan, you may also be required to source your home health services from specific agencies. Call your plan provider to ask what you’re eligible for and who can provide it.
Medicaid
Medicaid, which is the federal and state health insurance program for people with low income, offers varying coverage. “Some states are very generous and have good Medicaid programs,” says Johnson. “Some states don’t.”
Programs of All-Inclusive Care for Elderly (PACE)
PACE is a government program that provides medical and social services to frail seniors who are dually eligible for Medicare and Medicaid benefits. It’s designed for people who are at least 55 years old and would otherwise need nursing home-level care.
PACE services include adult daycare, meals, nutritional counseling, transportation and physical therapy.
However, it’s not available everywhere. “The big limitation of PACE is that it’s not available in a lot of jurisdictions,” says Jennifer L. FitzPatrick, a licensed clinical social worker, the author of Cruising Through Caregiving: Reducing the Stress of Caring for Your Loved One and a gerontology instructor at Johns Hopkins University in Baltimore.
For instance, New Jersey has six PACE agencies, and you must live in their specific coverage areas to participate. To find out if there’s a PACE program in your neighborhood, visit npaonline.org.
Long-Term Care Insurance
Long-term care insurance helps you prepare for care costs in old age. Every long-term care insurance policy is different, says FitzPatrick, but many do help cover home health care.
“Some are really liberal, and you can use it for anything you want: assisted living, a nursing home, home care, adult daycare,” she says. “Then there are some that have limitations.”
Once you’re approved for coverage, you begin paying premiums. The policy starts paying out once you become eligible for benefits, which is based on criteria like not being able to do certain activities of daily living (ADLs) on your own.
Many people buy long-term care insurance when they’re quite young, but FitzPatrick says it’s still worth looking into even if you’re in your sixties. “Don’t assume you can’t get it,” she says, noting that it’s important to read the policy thoroughly so you know what it does and doesn’t cover.
Veteran Assistance Options
Veterans who are signed up for VA healthcare can tap into benefits that help pay for in-home care. There are certain eligibility requirements based on clinical criteria, and some veterans do have a copay.
Home health services are based on each veteran’s needs. An aide might visit several times a week or just occasionally to assist with eating, getting dressed, bathing, personal grooming or grocery shopping.
The VA offers online resources as well, such as a Veteran Decision Aid for Care at Home or in the Community, that can help seniors decide if home health care is the right choice for them.
Tax Deductions
There are valuable tax deductions that can help offset home health care costs, says Kari Brummond, a tax preparer with TaxCure, a directory of tax debt professionals.
Taxpayers can claim a deduction for medical expenses that exceed 7.5% of their adjusted gross income, according to Brummond. They must use IRS Schedule A to itemize their deductions, which can include medical expenses for themselves, their spouse or their dependents.
