How to Cover the Cost of In-Home Care

How to Cover the Cost of In-Home Care

We all want to know how to cover the cost of in-home care. It brings up several decisions that need to be made. Including where your home will be. We may ask ourselves, “Am I able to remain in my home independently, or do I need assistance?” If the answer is daily assistance, we have three main options.

  1. Move in with or receive daily assistance from a loved one
  2. Relocate to assisted living or a nursing home
  3. Pay for in-home care services

Of these three options, in-home care is the most desired. However, it comes with a cost, as there are strict Medicare and Medicaid limitations to benefits that cover in-home care services. However, despite the high price and limitations, many people are finding ways to afford this more desirable option.

Don’t completely write off Medicaid.

Medicaid coverage varies greatly depending on the state you live in and may cover long-term in-home care if you qualify for a waiver. There may be a waitlist for benefits, so the sooner you apply, the better.

Use your veteran’s benefits.

An often-overlooked veterans’ benefit is Aid and Attendance, offering help with out-of-pocket expenses. Veterans who have served a minimum of one day during wartime, were on active duty for a minimum of 90 days, and honorably discharged may be eligible for this benefit. If qualified, the veteran receives a tax-free, monthly cash payment to use for care. For veterans and their families, this can help offset the cost of in-home care significantly.

Your life insurance policies may help.

Those with life insurance policies may learn that coverage may apply to in-home care. Some life insurance policies have a feature known as “accelerated benefits.” This feature allows the policyholder to use the insurance within the policy before death occurs. Typically, accelerated benefits are for those who have disabilities related to chronic conditions or require ongoing or long-term in-home care. If your dependents are not relying on the money, you may consider using accelerated benefits to cover the cost associated with in-home care.

Consider a reverse mortgage.

Reverse mortgages were created to help seniors live at home for as long as possible. Therefore, if your home is paid off or a significant amount of equity has been accumulated, a reverse mortgage may be an excellent option to cover the cost of in-home care. A reverse mortgage gives seniors the opportunity to take out home equity in the form of payments or as a lump sum.

Reverse mortgage qualifications include the following:

  • You must be 62 years of age or older
  • The home must be owned — either completely paid off or with a minimal balance
  • The issuing bank appraises the house to determine the value based on the senior’s age and payout

Take advantage of annuities.

An annuity combines personal investment with an ongoing insurance plan. It is a custom contract that an insurance company issues, turning an investor’s premium into an income stream that is fixed and guaranteed. After the investment has matured, the policyholder can begin withdrawing.

Many people only see annuities as a way to help seniors grow their money and assist with living expenses. However, the income earned from the annuity can very well be enough to cover the cost of in-home care.

In-home care is an option!

In-home is the most desired option for those who require daily assistance. Not only does it take away the obligation for loved ones to become caretakers, but it also enhances the quality of life for seniors and allows them to live in the most comfortable place- their home.

Despite the high cost associated with in-home care, this option may be more financially feasible than many realize. It may take some creative thinking and proper planning, but it is possible.

Elder law attorneys have the knowledge to combine estate planning with financial planning and offer guidance for long-term care options, including in-home care. We invite you to contact our Ruston, LA office by calling us at (318) 255-1760 to speak with one of our professionals today about Medicaid, VA benefits, and long-term care expenses.

Methods to Finance In-Home Care

In-home care is the preferred living arrangement for many aging seniors. However, many medical conditions and personal care needs as adults age can cause this to become more difficult due to cost. The cost of in-home care varies from place to place, but generally follows the cost of living. Places where the cost of living is lower usually have lower costs for in-home care and the opposite is also true. In areas with a higher cost of living, in-home care is generally more expensive. Another challenge of paying for in-home care is the strict limitations on using Medicare and Medicaid to pay for in-home care. However, it is possible to pay for in-home care. Let’s look at some of the options.

Medicare and Medicaid

Although these two options are more limited in the in-home care covered, there are occasions where they can be used to pay for in-home care. Medicare generally pays for in-home care services for a period of time and most often occurs for a time after a patient is discharged from a hospital or rehabilitation facility. Treatment generally would not be covered for a chronic condition. Medicaid rules vary from state to state but are often similar to Medicare. All programs cover short-term in-home care when the patient has an acute condition. Medicaid offers long-term coverage in some areas, but this is often limited to patients who are ill enough to qualify for nursing home coverage. This care must be provided by a Medicaid-certified care agency. With Medicaid, each state runs its program differently and coverage will vary from state to state. In Louisiana, for example, Medicaid would not generally cover in-home long-term care.

Reverse Mortgage

A reverse mortgage is an option for paying for in-home care. If the senior, age 62 or older, owns a home outright or owes little on the home, they can apply for a reverse mortgage. A reverse mortgage gives seniors the option of using the value of the equity in their home to get cash. The bank enforces strict rules about taxes, maintenance, homeowner’s insurance, and mortgage insurance. Therefore, it is important to do research on reverse mortgages and find a reputable bank, to lower the risk of defaulting on the reverse mortgage. Another important consideration is the length of time that care may be needed, as compared to the value of the equity. If a senior decides the reverse mortgage is a good choice for them, the cash can be used to cover the cost of in-home care.

Veteran’s Aid and Attendance Benefits

Aid and Attendance is an often-overlooked benefit available to veterans who are paying out of pocket for care. Veterans who served on active duty for 90 days, with one day during wartime, and who were honorably discharged, may be eligible for aid and attendance benefits. However, the qualification process is not easy and many veterans become frustrated when trying to do so.  As a result, the majority of veterans who may be eligible for the benefits never receive them.

Once qualified, a veteran can receive a monthly cash benefit, tax-free, to use for care. For veterans and their spouses, these benefits can be a major help in paying for in-home care. Surviving spouses of wartime veterans can also qualify for a monthly cash payment through the aid and attendance benefit.

Life Insurance

Life insurance is another possible way to pay for in-home care. If the life insurance policy is no longer needed to care for someone after death, it can be an option for paying for in-home care. A life insurance policy can be sold back to the company for a percentage of the value – usually 50 – 75%. This money can then be used to pay for in-home care. Many policies have flexibility, but some require the senior adult to be terminally ill. A policy with an Accelerated Death Benefit rider allows the policyholder to take a cash advance on the policy that is subtracted from the amount beneficiaries would receive. In this instance, the premiums are still paid and the policy still belongs to the policyholder.

Although in-home care is costly, the good news is that there are options available to help seniors pay for this care. The above are just a few options that may help seniors who wish to continue to live at home even when extra assistance is needed.

We help seniors and their loved ones find and pay for good long-term care using many of the options discussed above. We also create legal plans to protect the home and savings to make sure our clients never run out of money or options for good care. If you would like to learn more, please feel free to contact us. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.