Why this question is harder than it should be
There is no single program that pays for in-home care in the United States. There are six or seven partial ones, each with different rules, and almost nobody tells you which apply to you.
Families arrive at this question already tired, usually after a fall or a diagnosis, and are told something that is technically true and practically misleading: that Medicare covers home health. It does, in a narrow sense that turns out not to be the help most people need. Meanwhile the programs that would genuinely pay are the ones with waiting lists, so the cost of not knowing about them is measured in months.
What follows is the map. Work through it in order, apply to more than one thing at a time, and treat every waiting list as something to join now rather than when you need it.
Start with the distinction everything else depends on
Almost every coverage decision in American long-term care turns on one line: is this skilled care or custodial care?
Skilled care is something that requires a licensed professional. Wound care, injections, physical or occupational therapy, monitoring an unstable condition, teaching a family to manage a new medical device. It is usually short-term, tied to a specific medical event, and ordered by a physician.
Custodial care, sometimes called personal care or non-medical care, is help with the activities of daily living: bathing, dressing, toileting, transferring, eating, moving safely around the house, plus meals, laundry and supervision. It requires patience and skill, but not a licence.
Health insurance in this country pays for the first and largely does not pay for the second. Yet the second is what most families are looking for, and what most people need most of the time. Once you hold that distinction in your head, the rest of this stops being confusing and starts being merely difficult.
What Medicare actually covers
Medicare covers home health care under specific conditions: a physician certifies that you need intermittent skilled nursing or therapy, you are considered homebound, and the care is delivered by a Medicare-certified home health agency under a plan of care that the physician reviews. When those conditions are met, Medicare can also cover a home health aide for personal care — but only alongside the skilled service, and only on an intermittent basis.
What that means in practice: after a hospital stay or a new diagnosis, you may get several weeks of visits that include some help with bathing. When the skilled need ends, the aide ends with it.
Medicare does not cover ongoing custodial care at home, 24-hour care at home, homemaker services, or meal delivery. This is not a loophole or an oversight. It is the design of the program, and no amount of appealing changes it.
Two things worth knowing at the edges. Some Medicare Advantage plans have been permitted to offer supplemental benefits that traditional Medicare does not, which in some plans includes a limited number of in-home support hours, meal delivery after a hospital stay, or transport. These vary enormously by plan and by year, and they are not advertised prominently. If the person is on a Medicare Advantage plan, call the member services number and ask specifically what in-home support benefits the plan includes this year. It costs a phone call and people rarely make it.
And the Medicare hospice benefit, for someone with a terminal prognosis who elects it, is far broader than most families expect: a team, equipment, medications related to the terminal illness, and inpatient respite stays to give the family caregiver a break. It still does not provide round-the-clock caregiving at home, which is the most common misunderstanding about hospice.
Medicaid is the largest payer of long-term care in the country
If there is one thing on this page worth acting on, it is this. Medicaid — called different things in different states — pays for more long-term care in the United States than any other source, and unlike Medicare it does cover ongoing personal care.
Most of that happens through home and community-based services, delivered either as a state plan benefit or through waiver programs. The name, the eligibility rules, the services and the waiting lists all differ by state, which is why national advice is only ever a starting point. What is broadly consistent:
- Eligibility has two tests, not one. A financial test on income and assets, and a functional test on level of need. Passing one is not enough, and people commonly assume they fail the financial test when they have not actually checked their state's rules.
- Waiver programs frequently have waiting lists. In some states the wait is measured in years. Getting on the list costs nothing and the clock only starts when you apply.
- Many states allow self-direction. Under consumer-directed or participant-directed programs, the person receiving care chooses and manages their own caregiver, and in many states that caregiver can be a family member. This is the mechanism behind most legitimate "get paid to care for a relative" arrangements.
- Spousal impoverishment protections exist. Federal rules allow a spouse remaining at home to keep a portion of income and assets rather than being reduced to nothing. Do not make irreversible financial decisions before someone explains these to you.
The single best move here is to contact your state's Medicaid agency and your local Area Agency on Aging, and ask what home and community-based programs exist and whether there is a list. If the household finances are complicated, an elder law attorney is worth the consultation fee, because the mistakes in this area are expensive and often permanent. Transferring assets to qualify has a look-back period and can create a penalty; do not do it on the advice of a relative.
Long-term care insurance, if there is a policy
Fewer people have this than assume they do, and more people have it than remember. Check. Policies bought decades ago sit forgotten in filing cabinets, and adult children often do not know one exists. Look for annual premium notices, and check with the person's insurance agent or former employer.
If there is a policy, three features determine what it is actually worth:
- The benefit trigger. Most policies pay when the person needs help with a set number of activities of daily living — commonly two of six — or has a cognitive impairment requiring supervision. The assessment matters, so do not understate need out of pride.
- The elimination period. A waiting period, often 30 to 90 days, during which you pay out of pocket before benefits begin. Some policies count calendar days, others count days of service received, which produces very different results. Read which one yours uses.
- The daily or monthly benefit and whether it has inflation protection. A policy written in 1998 without inflation protection may pay a fraction of today's cost. It is still worth claiming.
Older policies sometimes require care from a licensed agency and will not reimburse an independently hired caregiver. Read that clause before hiring, because it can decide which route makes financial sense. And file carefully: claims are commonly delayed by incomplete documentation rather than denied on the merits.
Veterans benefits
If the person served, or is the surviving spouse of someone who did, this is the most frequently missed source of money on the page.
Aid and Attendance is an increased monthly payment added to a VA pension for eligible wartime veterans and surviving spouses who need help with daily activities or are housebound. It is paid in cash to the recipient, who may use it for care, which makes it unusually flexible. It has service, income and asset requirements, and the application is slow — another reason to start early.
Separately, VA health care includes a Homemaker and Home Health Aide program for enrolled veterans meeting clinical criteria, and Veteran-Directed Care, which gives the veteran a budget to arrange their own services, including in some cases hiring a family member. There is also the Program of Comprehensive Assistance for Family Caregivers, which provides a stipend and support to approved family caregivers of eligible veterans.
Do not navigate this alone. An accredited Veterans Service Officer will help with the application at no charge, and they are considerably better at it than most families. Be wary of anyone charging a fee to help you claim a VA benefit.
Paying privately, and the assets people forget
Most families pay privately for at least part of the care, at least at first. A few things that get overlooked:
- The medical expense deduction. Qualifying long-term care costs may be deductible as medical expenses if you itemize and exceed the threshold, and if you are paying for a dependent's care there may be other credits available. Ask a tax professional; we cannot give tax advice.
- Life insurance. Some policies have accelerated death benefit or chronic illness riders that pay out early. Some can be converted or sold. Read the policy before surrendering it for cash value, which is usually the worst of the available options.
- Employer benefits. Some employers offer backup care benefits, caregiver leave, or an employee assistance program that includes care navigation. If an adult child is arranging the care, check their own benefits, not just the parent's.
- Home equity. A reverse mortgage or home equity line can fund care and both carry real risk, particularly where a spouse or family member also lives in the house. Get independent advice from a HUD-approved housing counselor before signing anything, and be especially cautious of anyone who approaches you about it rather than the other way round.
One structural point on private pay: hiring an independent caregiver directly generally costs less per hour than going through an agency, and the responsibilities the agency was carrying — screening, payroll, cover when someone is sick, insurance — land on you instead. Our guide on choosing between a private caregiver and an agency covers that trade in detail, and the cost guide covers what each typically runs.
Paying a family member
This comes up in almost every family and is handled badly more often than not. Three legitimate routes exist.
Medicaid self-direction. In many states, a participant in a consumer-directed program can hire a family member as their paid caregiver, with rules about which relatives qualify that vary by state and program. This is the most common way it happens.
Veteran-Directed Care, as above, can allow the same thing for eligible veterans.
A private family caregiver agreement. The family pays a relative directly under a written contract. Put it in writing, at a market rate for the work, with hours and duties specified, and pay it properly rather than in cash. The reason is not bureaucratic: informal arrangements are routinely treated as gifts during a later Medicaid eligibility review, which can create a penalty period at the worst possible moment, and they are a common source of lasting conflict between siblings.
Be aware that paying a household worker can make you a household employer, with tax and workers' compensation obligations that depend on your state and the hours worked. Talk to a tax professional before the first payment rather than after the first year.
What to do, in what order
- Call your Area Agency on Aging first. Every part of the country has one. They know what exists locally, they are free, and they will usually do an assessment. This is the highest-value single phone call available to you.
- Apply to Medicaid and get on any waiting list, even if you are unsure you qualify. Uncertainty is not a reason to delay an application that takes months.
- Check for a long-term care policy, and if one exists, read the trigger and the elimination period before you hire anybody.
- Check veteran status for both spouses, and contact an accredited Veterans Service Officer if either served.
- Call the Medicare Advantage plan, if there is one, and ask what supplemental in-home benefits it offers this year.
- Contact your State Health Insurance Assistance Program for free, unbiased counseling on Medicare questions specifically.
- Plan the bridge. Assume you will pay privately for the first stretch while applications are pending, and budget for it. Nearly every family is surprised by this, and it is entirely predictable.
Where do you start?
Once you know what will fund the care, the remaining question is who provides it. Put your zip code into The Care Royal to see caregivers offering services in your area and what they charge, and read what to check before you let someone work in your home before you make an offer.
This guide describes how these programs are generally structured in the United States. Eligibility rules, program names and benefit amounts differ by state and change over time, and nothing here is legal, tax or financial advice. Confirm your own position with your state Medicaid agency, your Area Agency on Aging, an accredited Veterans Service Officer, or a qualified professional.