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Paying for Home Care: 4 Common Myths Busted (US)

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April 1, 2015

Figuring out how to pay for eldercare can be a challenge. The majority of seniors prefer to live at home as long as possible, but they may not have considered how to cover the cost of home care.

Here are four common myths about financing home eldercare, along with four funding sources that can help your loved one age in place.

Myth #1: Medicare covers home care for seniors.

Truth: Medicare pays only for medical care. If a senior needs wound care or physical therapy at home, Medicare may pay for all or a portion of those services. However, Medicare does not pay for any type of non-medical caregiving, such as companionship care, assistance with bathing or medication reminders. Learn more about navigating the Medicare Maze.

Myth #2: Medicaid covers home care.

Truth: Strictly speaking, Medicaid does not cover non-medical in-home caregiving. However, eligible seniors may be able to obtain services from local Home and Community Based Services (HCBS) programs. Generally, seniors must meet need-based requirements to qualify for these programs.

Myth #3: Private health insurance covers home care.

Truth: Most private health insurance specifically excludes non-medical home care from coverage. However, long-term care insurance may include benefits for in-home care. More on that below.

Myth #4: The VA pays for home care.

Truth: The Veterans Administration does not directly pay for in-home care of veterans or their spouses. However, the VA does offer cash benefits to qualifying veterans and/or their spouses. These cash benefits can be used to pay for home care.

4 Proven Ways to Fund Home Care Services

1. Long-term care insurance

These increasingly popular plans usually include benefits for home-based care, as well as for nursing homes and assisted living facilities. You should get a long-term care insurance policy before you need benefits. If you’re interested in this funding source, your best bet is to get the help of a financial advisor in choosing the best policy for your needs.

2. Reverse mortgage

For seniors who have paid off their house, a reverse mortgage allows them to access the equity without selling the property. You should carefully evaluate reverse mortgage plans before choosing one. Some plans take a large percentage of the equity as a fee for their services. If you’re unsure how to choose a reverse mortgage or determine if it’s the right option for you, consult a financial advisor. The Federal Trade Commission offers a wealth of information about reverse mortgages at

3. Life settlements

This option allows a senior to possibly convert a life insurance policy into cash. Many factors can influence a person’s ability to do this, including the type of life insurance policy, the person’s health status and other factors. Again, you may want to seek financial counsel before choosing this option. You can read more about life settlements at

4. Veteran’s Administration “Pension with Aid and Attendance”

This is the program many veterans and their surviving spouses tap when they need funds for home care or other medical expenses. Veterans who served at least 90 consecutive days during a wartime period and who meet income and asset guidelines can obtain up to $25,000 per year. For more information, consult your local Veterans Administration office or visit

To learn more about the many ways to pay for home caregiving, download a free copy of the Home Care Funding Solutions guide or watch the “Financing Options for Care” video.

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Thoughts and stories from others
  1. May 22, 2015 at 3:42 pm | Posted by Gail Swan

    I am 72 yr, ~ I have a wonderful lady that cleans my house and drives for me. I have to pay her $40 per hour every time she comes. Some months I pay her $300 - As of now I have no "Senior Care" policy . I need the " Medicare" HOME CARE" as soon as possible. About 4 years ago a 2 Representative ca,e to explain the value of " Living in your Own Home" and have someone to assist for 2/ times a week. I hope you can send me to the office that will help GC SWAN


  2. April 24, 2015 at 2:53 pm | Posted by Raven Hastings

    Your information was very helpful. People do need to know though, just how hard it is to get affordable Long Term Care insurance. The older you are, the more difficult it is to find anyone who wants to sell you this insurance. If you have any ongoing medical issue, that can also be a major reason they will not insure you. Check it out before you retire if possible, as that may give you a better chance of approval.


  3. April 10, 2015 at 9:42 am | Posted by Louis Alexander

    Your comments are good and informative for a lot of people facing the Elder Care Problem. But, if you are a millionaire, home health care is not feasible due to the costs - - which exceeds $90K per year - - at least. However, one issue you did not address that is very important is the Q.I.T. or Miller Trust for Elder Care recipients that eventually have to be moved to the care of a Nursing Home. My comments are based on personal experience over the last 13 years. About 3 years ago I contacted a very good Elder Care Law firm that set up the Miller Trust and also continues to assist me with the ever changing rules and regulations.


  4. April 9, 2015 at 4:15 pm | Posted by Richard Sanchez

    Thank you I needed to know this information.


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