Understanding Home Care Costs and Coverage Options: A Quick and Easy Guide

Are you worried about how to pay for home care for yourself or a loved one? You’re not alone. Many families struggle with this challenge. This guide will help you understand home care costs and the different ways to pay for them.

What is Home Care?

Home care means getting help at home instead of moving to a nursing home. This help can include:

Basic care like bathing and dressing
Help with housework and meals
Skilled medical care from nurses
Physical therapy
Help taking medicines

The Growing Need for Home Care

More people need home care than ever before. A study by the AARP found that 77% of older adults want to stay in their homes as they age. The number of Americans aged 65 and older will double by 2060, reaching 95 million people.

The Cost of Home Care in Southern California:

The cost of home care in San Diego typically ranges from $30 to $50 per hour, depending on the type of care, provider qualifications, and level of assistance required. Here’s a more detailed breakdown:

Hourly Rates

Non-Medical Home Care: $30–$50 per hour
(Services include personal care, housekeeping, and companionship.)

Factors Affecting Costs

Type of Care: Skilled medical care costs more than non-medical assistance.
Hours Needed: Rates may be lower for longer shifts or consistent weekly hours.
Caregiver Qualifications: Experienced or licensed professionals typically charge higher rates.
Agency vs. Private Hire: Agencies often charge more due to overhead costs but provide insurance and background checks

Ways to Pay for Home Care

Medicare Coverage

Medicare can help, but it has limits:

Covers skilled nursing care and therapy
Must be ordered by a doctor
Only covers part-time or temporary care
Does not cover personal care or housekeeping
Usually limited to a few hours per week

Medicaid Coverage

Medicaid helps many people pay for home care:

Covers both medical and non-medical care
Available to people with low income and assets
Coverage varies by state
May have waiting lists
Can cover up to 40 hours per week in some states

Long-Term Care Insurance

Long-term care insurance can be very helpful:

Covers both medical and non-medical care
Can pay for years of care
Average cost is $2,500-3,500 per year
Best to buy before age 60
May have waiting periods before coverage starts

Research from the American Association for Long-Term Care Insurance shows that 95% of claims start after age 70.

Veterans Benefits

Veterans may get help through the VA:

Aid & Attendance benefit helps pay for care
Must have served during wartime
Must need help with daily activities
Can pay up to $2,200 per month
Available to veterans and their spouses

Private Pay Options

Savings and Retirement Accounts

Using savings is common:

Flexible spending
No waiting periods or approvals needed
May use up retirement savings quickly
Should consider other options first

Reverse Mortgages

A reverse mortgage lets homeowners borrow against their home:

Must be 62 or older
House must have enough value
Can provide regular monthly payments
Loan must be repaid when you move or pass away
Keep your home while living there

Life Insurance Options

Some life insurance policies can help:

Death benefit can be used early
Some policies have long-term care riders
Can sell policy for immediate cash
Value usually less than death benefit

Additional Programs:

PACE Programs

PACE (Program of All-Inclusive Care for the Elderly) offers comprehensive care:

Combines Medicare and Medicaid services
Provides both medical and social services
Includes home care, adult day care, and medical care
Must be 55 or older
Must need nursing home level care
Must live in a PACE service area
Average monthly cost is $4,000-5,000 without Medicare/Medicaid

Studies show PACE participants:

Have fewer hospital stays
Live longer at home
Report better quality of life
Have fewer nursing home placements

According to the National PACE Association, 95% of PACE participants live in the community rather than nursing homes.

Medicare Advantage Plans

Medicare Advantage (Part C) plans now offer more home care benefits:

Some plans cover personal care services
May include meal delivery
Transportation to medical appointments
Home safety modifications
Remote patient monitoring
Adult day care services

A 2023 study by the Better Medicare Alliance found that 67% of Medicare Advantage plans offer some form of in-home support services.

Key things to know:

Benefits vary by plan and location
May have lower costs than traditional Medicare
Usually need to use network providers
Might require prior authorization
Often include prescription drug coverage

In-Home Supportive Services (IHSS)

California’s largest home care program:

Serves over 600,000 Californians
Funded by Medi-Cal (California’s Medicaid)
Allows family members to be paid caregivers
Covers personal care and housekeeping
Can provide up to 283 hours per month
Income and asset limits apply

California Paid Family Leave

Helps family caregivers:

Up to 8 weeks paid leave
Receive 60-70% of regular wages
Can care for ill family members
Job protection during leave
Available to most California workers

California Regional Centers

Support for developmental disabilities:

21 centers across California
Coordinate home care services
No income requirements
Lifelong support available
Include respite care services

Program for All-Inclusive Care for the Elderly (PACE) in California

California has special PACE features:

22 PACE organizations statewide
More locations than most states
Transportation included
Adult day health care
Available in major urban areas

California Assistance Programs

Home Safe Program

Helps seniors stay home:

Home modifications
Deep cleaning
Pest control
Short-term rental assistance
Available through Adult Protective Services

Multi-Purpose Senior Services Program (MSSP)

additional help for seniors:

Care management
Home modifications
Personal care coordination
Must qualify for Medi-Cal
Available in most counties

Tips for Managing Home Care Costs

Plan Ahead

Start planning early:

Research options before you need care
Buy insurance while young and healthy
Save money specifically for care needs
Talk with family about care preferences

Combine Care Options

Mix different types of help:

Family caregivers for some tasks
Paid caregivers for harder tasks
Adult day care for social activities
Meal delivery services
Transportation services

Get Professional Help

Work with experts:

Elder law attorneys
Financial planners
Care managers
Insurance agents
Social workers

Financial Planning Resources and Tools

Insurance Planning Resources

National Association of Insurance Commissioners LTC Rate Guide: https://www.naic.org/documents/prod_serv_consumer_ltc_lp.pdf
American Association for Long-Term Care Insurance Premium Calculator: https://www.aaltci.org/long-term-care-insurance-rates
State Health Insurance Assistance Program Locator: https://www.shiphelp.org
Medicare Supplement Insurance Cost Comparison: https://www.medicare.gov/medigap-supplemental-insurance-plans
Life Insurance Policy Evaluation Calculator: https://www.lifehappens.org/insurance-overview/life-insurance/calculate-your-needs

Tax Planning and Healthcare Savings Tools

HSA Calculator: https://healthequity.com/hsa/calculator
FSA Calculator: https://fsastore.com/FSA-Eligibility-List
Medical Expense Tax Deduction Calculator: https://turbotax.intuit.com/tax-tools/calculators/medical-expense-calculator
Dependent Care Tax Credit Calculator: https://www.care.com/homepay/calculator
IRS Withholding Estimator: https://www.irs.gov/individuals/tax-withholding-estimator

Estate Planning Tools

Quicken WillMaker Estate Planning Tool: https://www.quicken.com/willmaker
Trust & Will Estate Planning Calculator: https://trustandwill.com/estate-planning-calculator
Nolo Estate Tax Calculator: https://www.nolo.com/legal-encyclopedia/estate-tax-calculator
LegalZoom Estate Planning Assessment: https://www.legalzoom.com/personal/estate-planning/estate-planning-worksheet
FreeWill Estate Planning Documents: https://www.freewill.com

Retirement Planning Specialists

National Association of Personal Financial Advisors: https://www.napfa.org
Certified Financial Planner Board: https://www.letsmakeaplan.org
Society of Financial Service Professionals: https://www.financialpro.org
Elder Law Attorney Directory: https://www.naela.org/findlawyer
Accredited Financial Counselor Directory: https://www.afcpe.org/find-an-counselor

Financial Education Resources

Khan Academy Personal Finance: https://www.khanacademy.org/college-careers-more/personal-finance
Coursera Financial Planning Courses: https://www.coursera.org/courses?query=financial%20planning
EdX Personal Finance Courses: https://www.edx.org/learn/personal-finance
MyMoney.gov Financial Education: https://www.mymoney.gov
FDIC Money Smart Program: https://www.fdic.gov/resources/consumers/money-smart

Helpful Resources and Links

National Resources

Government Programs

Medicare: https://www.medicare.gov/what-medicare-covers/home-health-care
Medicaid: https://www.medicaid.gov/medicaid/home-community-based-services
Veterans Benefits: https://www.va.gov/health-care/about-va-health-benefits/long-term-care
Social Security Administration: https://www.ssa.gov/benefits
National Council on Aging Benefits Check-Up: https://benefitscheckup.org
PACE Program Finder: https://www.npaonline.org/pace-you/find-pace-program

Organizations and Associations

AARP: https://www.aarp.org/caregiving
National Association for Home Care & Hospice: https://www.nahc.org
Family Caregiver Alliance: https://www.caregiver.org
Alzheimer’s Association: https://www.alz.org/help-support/caregiving
American Association for Long-Term Care Insurance: https://www.aaltci.org
National Adult Day Services Association: https://www.nadsa.org

California-Specific Resources

State Programs

California Department of Aging: https://aging.ca.gov
In-Home Supportive Services (IHSS): https://www.cdss.ca.gov/in-home-supportive-services
Medi-Cal: https://www.dhcs.ca.gov/services/medi-cal
Cal MediConnect: https://www.calduals.org
California Paid Family Leave: https://edd.ca.gov/paid-family-leave
California Regional Centers: https://www.dds.ca.gov/rc/find-your-regional-center

California Organizations

California Association for Health Services at Home: https://www.cahsah.org
California Department of Insurance: http://www.insurance.ca.gov/01-consumers/105-type/95-guides/05-health
California Health Advocates: https://cahealthadvocates.org
California Long-Term Care Ombudsman: https://aging.ca.gov/Programs_and_Services/Long-Term_Care_Ombudsman

Financial Planning Resources

National Reverse Mortgage Lenders Association: https://www.nrmlaonline.org
Medicare Plan Finder: https://www.medicare.gov/plan-compare
Long-Term Care Insurance Cost Calculator: https://www.ltcfeds.com/tools/premium-calculator
BenefitsCheckUp: https://benefitscheckup.org

Home Care Agency Finders

Caring.com: https://www.caring.com
A Place for Mom: https://www.aplaceformom.com/
Care.com: https://www.care.com
HomeCare.org Directory: https://homecare.org/directory
Medicare’s Home Health Compare: https://www.medicare.gov/care-compare

Legal Resources

National Academy of Elder Law Attorneys: https://www.naela.org
California Advocates for Nursing Home Reform: http://www.canhr.org
Legal Aid Association of California: https://www.laaconline.org
Disability Rights California: https://www.disabilityrightsca.org

Support Groups and Communities

Family Caregiver Alliance Online Support Groups: https://www.caregiver.org/support-groups
Well Spouse Association: https://wellspouse.org
Caregiver Action Network: https://caregiveraction.org
AARP Family Caregiving Discussion Group: https://community.aarp.org/categories/caregiving

Educational Resources

National Institute on Aging: https://www.nia.nih.gov/health/caregiving
Eldercare Locator: https://eldercare.acl.gov
Home Care University: https://education.nahc.org
Caregiver Resource Centers: https://www.caregivercalifornia.org

Emergency and Crisis Resources

Adult Protective Services: https://www.cdss.ca.gov/adult-protective-services
Alzheimer’s Association 24/7 Helpline: 1-800-272-3900, https://www.alz.org/help-support/resources/helpline
National Elder Fraud Hotline: 833-FRAUD-11, https://stopelderfraud.ovc.ojp.gov
Crisis Text Line: Text HOME to 741741, https://www.crisistextline.org

Bibliography

AARP Public Policy Institute. (2021). “Home and Community Preferences Survey.”
Genworth Financial. (2021). “Cost of Care Survey.”
Kaiser Family Foundation. (2022). “Medicaid Home and Community-Based Services Enrollment and Spending.”
Health Affairs. (2022). “Medicare Home Health Care: Current Challenges and Future Directions.”
National Association for Home Care & Hospice. (2021). “Basic Statistics About Home Care.”
American Association for Long-Term Care Insurance. (2023). “Long-Term Care Insurance Facts.”
Home Care Association of America. (2022). “State of Home Care Industry Report.”
U.S. Census Bureau. (2020). “Demographic Turning Points for the United States.”
Department of Veterans Affairs. (2023). “Aid and Attendance Benefits Guide.”
Journal of the American Geriatrics Society. (2021). “Home Care Utilization Patterns Among the Elderly Population.”
National PACE Association. (2023). “PACE by the Numbers.”
Better Medicare Alliance. (2023). “Medicare Advantage Supplemental Benefits Study.”
California Department of Social Services. (2024). “In-Home Supportive Services Program Data.”
California Department of Aging. (2023). “Programs and Services Report.”
California Department of Health Care Services. (2024). “Medi-Cal Home and Community-Based Services.”

The information in this guide is current as of early 2024. Laws and programs change often, so check with local experts for the latest details.

Note: All links are current as of early 2024. Please verify current information as programs and websites may change. Government websites (ending in .gov) are generally the most reliable sources for program information.