How Do I Pay for Homecare?

Paying for home care services can involve a mix of private funds, insurance, such as long term care polices and government assistance such as the VA and programs like the Homemaker and Aid & Attendance programs.

Long Term Care Insurance

Some private health insurance plans and life insurance policies may offer coverage for home care services, but long term care insurance is a type of insurance designed specifically for homecare and assisted living. Here is a list of long term care providers:

AETNA LIFE INSURANCE COMPANY – 800/872-3862

AMERICAN FIDELITY ASSURANCE COMPANY – 800/654-8489

AMERICAN GENERAL LIFE INSURANCE COMPANY – 800/231-3655

ASSURITY LIFE INSURANCE COMPANY – 800/869-0355

BANKERS LIFE AND CASUALTY COMPANY – 800/621-3724

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA – 800/925-2374

BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA – 800/819-2468

CONTINENTAL CASUALTY COMPANY – 877/262-2727

GENWORTH LIFE INSURANCE COMPANY – 888/436-9678

GREAT AMERICAN LIFE INSURANCE COMPANY – 800/854-3649

GUARANTEE TRUST LIFE INSURANCE COMPANY – 800/338-7452

JOHN HANCOCK LIFE INSURANCE COMPANY – 800/732-5543

JOHN HANCOCK LIFE INSURANCE COMPANY – 800/861-9264

KNIGHTS OF COLUMBUS – 800/524-3611

LIFESECURE INSURANCE COMPANY – 866/582-7702

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY – 800/272-2216

MEDAMERICA INSURANCE COMPANY – 800/544-0327

MINNESOTA LIFE INSURANCE COMPANY – 888/505-9817

MUTUAL OF OMAHA INSURANCE COMPANY – 800/775-6000

NEW YORK LIFE INSURANCE COMPANY – 800/723-5555

NORTHWESTERN LONG TERM CARE INSURANCE COMPANY – 800/890-6704

PHYSICIANS MUTUAL INSURANCE COMPANY – 800/228-9100

PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE – 877/301-1212

PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE – 800/346-3778

RESERVE NATIONAL INSURANCE COMPANY – 800/654-9106

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY – 800/252-1932

STERLING LIFE INSURANCE COMPANY – 800/688-0010

TRANSAMERICA LIFE INSURANCE COMPANY – 800/247-3615

TRANSAMERICA LIFE INSURANCE COMPANY – 800/238-4302

UNITED OF OMAHA LIFE INSURANCE COMPANY – 800/775-6000

UNITED SECURITY ASSURANCE COMPANY OF PENNSYLVANIA – 800/872-3044

UNITED TEACHER ASSOCIATES INSURANCE COMPANY – 800/880-8824

Government Programs

The VA Homemaker and Homehealth Aid Program provides eligible veterans with assistance in their homes with personal care and household support. This program helps veterans who need help with daily living tasks, such as bathing, dressing, and meal preparation, to maintain their independence and quality of life.  Eligibility:

Veteran’s Status: Must be an eligible veteran enrolled in the VA healthcare system.

Clinical Need: Must demonstrate a clinical need for the services through a comprehensive geriatric evaluation.

Dependency: Veterans may be eligible if they have dependencies in three or more Activities of Daily Living (ADLs) or significant cognitive impairment, or dependencies in two ADLs along with meeting two additional conditions.

The VA Aid and Attendance is a pension benefit. This means that in order to qualify, veterans need to have served at least 90 days, with at least one day during war time. They also need to have been honorably discharged. A service-related disability is not necessary to qualify. Qualifying individuals must have less than $80,000 in assets, not including their home and vehicle. Their income must not exceed the Maximum Annual Pension Rate (MAPR). MAPR figures for 2012 are as follows:

Single veteran: $20,447
Veteran with one dependent: $24,239
Single surviving spouse: $13,138
Surviving spouse with one dependent: $15,673

You might look at these numbers and think your income level disqualifies you, but the details of the rules make qualifying easier than it may seem. Income from welfare benefits and Supplemental Security Income does not count toward the MAPR.

Unreimbursed medical expenses actually paid by veterans or family members are deducted from actual income to determine eligibility. “Unreimbursed” means the expenses were not covered by insurance. Examples include health insurance premiums (Medicare, Medigap, and private), over-the-counter medications, and fees from services such as assisted living facilities, nursing homes and in-home care. Expenses should be recurring to count against income. The Aid and Assistance benefit pays qualifying individuals the difference between their countable income and the MAPR. Take a look at the following example situation:

Joe is an unmarried veteran with Social Security income of $15,000 per year and a pension of $13,000 per year. His total income is $28,000 per year. He yearly unreimbursed medical expenses are $19,000 for home health care, $1,300 for Medicare, and $1800 for supplemental insurance, for a total of $22,100. Joe subtracts his medical expenses from his income (28,000 – 22,100) to get a countable income of $5,900. Joe subtracts this number from his applicable MAPR (20,447 – 5,900) to determine that he is eligible for $14,547 per year in Aid and Attendance benefits.

Medicaid:

Medicaid, the joint federal and state health insurance program, can cover in-home care for low-income individuals, especially those who need long-term care. This program will depend state by state so please contact us at 877 577 6782 for assistance with Medicaid programs.

Reverse Mortgages:

If you have significant home equity, you can use a reverse mortgage to access funds to pay for care.  A reverse mortgage is a type of loan available to homeowners 62 years or older that allows them to convert a portion of their home equity into cash, without having to sell their home or make monthly mortgage payments. The two types of Reverse Mortgages are Home Equity Conversion Mortgage (HECM) which is the most common type of reverse mortgage and insured by the Federal Housing Administration (FHA) and Proprietary Reverse Mortgages. These Reverse mortgages are not government-insured and may have different terms and features.

Borrowing against home equity: Instead of making monthly payments to a lender like with a traditional mortgage, the lender makes payments to the homeowner, using a portion of the home’s equity as collateral.

No monthly mortgage payments required: Borrowers are not required to make regular monthly mortgage payments.

Loan repayment: The loan, along with accrued interest and fees, becomes due when the borrower sells the home, moves out, or passes away.

Title remains with the homeowner: The borrower retains ownership and title to the home throughout the loan period.

Key features and requirements:

Age: Typically, the borrower must be at least 62 years old.

Home equity: The borrower must have sufficient equity in their home.

Primary residence: The home must be the borrower’s primary residence.

Property maintenance: Borrowers are responsible for property taxes, homeowners insurance, and maintaining the home.

Mandatory counseling: Borrowers are typically required to undergo counseling with a HUD-approved counselor to understand the terms and implications of the loan.