Many families struggle to afford the care that their older loved ones need.  The alternatives boil down to living at home and having the necessary help come, using the services of nursing homes or moving to an assisted living facility.  By any measure, when possible, staying at home has significant advantages, not only cost, but physically and emotionally, too.

Cost Justification.  Some families avoid hiring professional home care is anxiety about the perceived cost.  The fact is, however, the actual cost of caring for a loved one on your own is not as cost-effective as it might first seem.  When all of the costs are considered, from out-of-pocket expenses to opportunity cost, the comparison becomes clearer.   When the caregiver has to dip into his or her own retirement savings to finance the caregiving while giving up personal time and energy, the tradeoff for nonprofessional care is usually unfavorable.

Utilizing the services of a professional home care agency leaves other family members the opportunity to be able to work, run errands or exercise, all the while maintaining savings and enjoying a greater peace of mind.

How to Finance Home Care

There are many options that different families use to finance home care.  Some have resources to cover the cost, others create opportunities from other assets, while others can receive help from various organizations.

Private Pay.  The easiest situation occurs when our loved one has savings or supplementary income available that can help pay for care.  Sometimes, other family members are in a position to contribute to the cost of care for their loved one.

Long Term Care Insurance.  This type of specialized insurance can help cover the cost of home care.  Generally, people buy such policies as they approach their senior years in their 50’s or 60’s.  Many of them specifically allow payment of funds to cover in-home care.  You should check to see if your loved one’s policy allows for this application of funds.  The senior generally needs to qualify based on an inability to perform multiple functions of daily living (dressing, toileting, bathing, among others).

Veteran’s Pension Benefit.  The Veterans Administration is a great resource for seniors who have served in the armed forces. If your loved one qualifies, the VA offers programs designed specifically to make in-home care more affordable.  Eligible veterans and surviving spouses may be eligible for up to $2,266 per month (as of 2020) to reimburse veterans and their families for home care costs.

Reverse Mortgage.  A reverse mortgage can be very useful for homeowners aged 62 and older whose home is their principal residence and who have a high amount of equity.   As long as the senior obtaining the loan plans on staying in the home being financed with a reverse mortgage this program may work well.

Whole Life Insurance Policies. Whole life policies build cash value and as it does, the owner of the policy usually has the opportunity to borrow against the plan while keeping insurance in effect.

Home care provides many benefits to the seniors involved and the families who love them.  Funding this care can take many different forms.  Explore them all before undertaking a task that makes it less comfortable, and, perhaps, less safe, for all concerned.