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Posted: October 29, 2008

On the Hook for Home Care Costs

Don't Overlook These Sources of Funding

You’ve heard it countless times – your parent wants to continue living in their own home rather than move in with you or into assisted living. But the realization of staying independent can be expensive, especially when in-home care by nurses, home health aides or physical therapists are required. And sooner or later, they’re all likely to enter the picture.

Just how can a family afford it? Well, beyond a caregiver’s personal financial sacrifice and digging into a loved one’s assets, you must be creative to find alternative sources of funding and financial support that can make your parent’s goal of staying (mostly) independent a reality. And those creative sources are available, if not always easy to identify.

Long-term care insurance and government programs are more obvious sources and can help, if the right conditions are met. We want to look not only at those programs, but other important, not-so-obvious sources of potential assistance, and point you toward you some creative options that you might not have considered before.

Discount Prescriptions
Cover All the Bases

Diane Cameron, director of Community Caregivers, a volunteer organization in Guilderland, New York, providing seniors with essential services, recommends investigating every possible source of funding and free assistance. “People should call all the agencies and government departments at the same time, because waiting for decisions can take time,” she advises.

Cameron also recommends contacting volunteer caregiving programs, churches, and other faith community organizations to find out what help they offer. “For example,” she says, “in the Albany, New York, area, Catholic Charities has Caregiver Support Grants of up to $500 for home care expenses.”

Private Long-Term Care Insurance

One of the best ways to afford home care is to plan ahead with the purchase of a long-term care insurance policy. This insurance is most affordable when purchased at a younger age, but may still turn out to be a cost-effective solution even if purchased later. For this reason, consulting with a financial expert or elder law attorney about buying a policy is worthwhile.

Coverage for home care expenses begins when the insured person can no longer perform specific activities, such as eating and bathing independently, and when the situation is expected to continue for a long time. In some cases, this coverage includes reimbursement to family caregivers for the care they provide a loved one at home.

For more information on long-term care insurance, contact the National Association of Insurance Commissioners at (816) 842-3600, for their publication, A Shopper’s Guide to Long-Term Care Insurance.

Funding for Federal Employees

If your loved one is or was an employee of the federal government or US Postal Service, they may be eligible to purchase long-term care insurance at a group rate through the Federal Long-Term Care Insurance Program (FLTCIP). To learn more about this program, visit the Office of Personnel Management (OPM) website.


Under certain conditions, Medicare assists with paying the costs of skilled nursing care and other professional health care at home, including home health aides, therapists, and social services. This link on the Medicare website provides specific information about eligibility and coverage for in-home services.


If your loved one is a veteran, they may qualify for free home care benefits. If so, skilled home care will be provided by Veteran’s Administration and contract agencies to veterans who are homebound with chronic diseases. Covered services include skilled nursing care, home health aides, therapists and homemaker services. Contact the VA with eligibility and benefits questions at (800) 827-1000.

State Programs

Four states (New York, California, Indiana and Connecticut) now participate in The Partnership for Long-Term Care, a partnership between Medicaid and long-term care insurers, which provides an alternative to the spending down or transferring assets that is required under Medicaid. These websites provide information on the programs for each individual state:

Diane Cameron recommends checking with your town and county governments, as well. “Our county has some funds for home care, and we refer families to that program often,” she says.

Using Financial Assets

The following suggestions involve the creative use of financial assets and resources that may be available to you or your loved one. There are many factors to consider, including your loved one’s life expectancy, cost of care, tax questions, estate issues, and your loved one’s personal preferences.

One or more of these ideas could help in your situation, but due to their complexity, it is highly advisable to consult with a financial expert or elder law attorney to help you sort through the options and make the best choices.

Accelerated Benefits. Some life insurance policies have a feature called an accelerated benefit, which allows insureds to receive their life insurance funds during their lifetime instead of leaving the money to their estate. Check with the insurance company to see if your loved one’s policy has this option.

Elder Settlements. Some insurance companies will purchase existing life insurance policies for a discounted price. For example, they might pay your loved one $35,000 now for a policy with a $50,000 death benefit. Although the payment is less than what would be paid out after death, having that money today could go a long way toward paying for the assistance that would enable your loved one to continue living at home for an extended period.

Reverse Mortgages. Often a significant portion of an older person’s wealth is tied up in home equity. A reverse mortgage allows older homeowners (those over age 62) to convert part of that equity into tax-free income, without having to sell the home or make a mortgage payment. Instead of making monthly payments to the lender, the process is “reversed” and the lender makes the payments to the homeowner. The reverse mortgage loan is repaid when the homeowner no longer owns the home due to sale of the home or passing away of the homeowner.

As you can see, there are a number of opportunities out there worth investigating for help with home health care costs. But remember, even for the most creative caregiver, it still makes sense to thoroughly understand all these potential sources of funding, and to get expert advice to help you make the best decisions for you and your loved one.


Melissa A. Goodwin is a freelance writer and photographer living in Santa Fe, New Mexico. She has years of experience working with volunteer caregiving programs that help seniors and family caregivers. She can be reached at

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