Article originally featured on Forbes.com
Many seniors want to age in place and receive home health care (often called home health) instead of spending their final years in a nursing home or other facility. And it makes sense for more than just personal reasons: “We talk about the triple aim a lot in healthcare, which is lower cost of care, improved outcomes and improved patient satisfaction,” says Mark Prather, M.D., co-founder and CEO of DispatchHealth, which provides in-home medical care for patients with more acute medical needs. “A system of care in the home is the fastest way to do that, in my opinion.”
Here’s what to know about home health care costs and how to pay for them.
What Is Home Health Care?
Home health, as its name suggests, is care—both medical and non-medical—that’s delivered at home. It’s provided by licensed medical professionals, such as nurses, certified nurse assistants, physical therapists, occupational therapists, speech-language pathologists and health aides.
What Does Home Health Care Include?
Depending on a patient’s needs, home health can provide a wide range of services: companionship, assistance with meals and bathing, occupational therapy, wound care and nursing care for a short- or long-term illnesses or disabilities. In some cases, it can even replicate the care provided in an emergency room.
Cost of Home Health Care
The cost of home health varies. Cost of living drives up the price, says Fred Johnson, president and CEO of Team Select Home Care, a national home health agency. Services tend to cost more in areas where it’s more expensive to live, such as Washington, D.C. and San Francisco, compared to, say, Alabama.
Whether you’re looking for an agency in a rural or urban area can also make a difference. Sometimes, services are scarce in rural areas, says Johnson, which means the few agencies there will likely charge higher rates.
Home health costs also depend on a state’s minimum wage. Agencies add a fee to the hourly cost for care to help cover their overhead costs, such as administrative employees’ salaries and healthcare benefits for all employees, says Johnson. “So if an agency needs to profit at least $4 an hour and minimum wage is $15 an hour, it’s going to cost $19 in the marketplace,” he says.
The chart below details the median cost for a home health aide in 10 states across the U.S.
How to Pay for Home Health Care
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.
How to Choose the Right Home Health Care Agency for You
Just like with a primary care doctor or therapist, not every home health agency is the right fit—and it’s important to find the one that works best for you. The National Association for Home Care & Hospice suggests asking potential providers the following:
How long have you been serving the community?
Do you supply literature explaining your services, eligibility requirements and funding sources? (This document is often called a “Patient Bill of Rights.”)
How do you select and train your employees?
What procedures do you have in place to handle emergencies?
How is patient confidentiality ensured?
Types of Home Health Care
There are two primary types of home health care, according to Johnson:
Skilled home health care is prescribed by a physician and includes physical therapy, occupational therapy and speech therapy, as well as care provided by a registered nurse.
Non-skilled home health care includes services such as bathing, cleaning and errands. This type of care is typically provided by a certified nurse assistant or home health aide.
Where to Look for Home Health Care Options
Start by asking your primary care physician for a recommendation, suggests Prather. They’ll likely have good resources and referrals for you. From there, broaden the conversation and ask trusted friends and family members for their recommendations. Finally, look up potential providers online and read other patients’ reviews.