17 Apr How Do I Pay for Long Term Home Care?

A lot of our initial conversations with potential clients revolve around how to pay for our services. Just about anyone, who isn’t in the home care industry or hasn’t implemented care for a parent, finds it hard to understand how Medicare and Medicaid factor into the process. I know I didn’t understand until I started this business. In fact, most don’t even know the basic differences between Medicare and Medicaid.

As with most things related to Health Care, its complicated. For the purposes of this post, I will try and simplify it as much as possible, but in doing so it will be necessary to omit some of the more nuanced issues, which I will cover another time.

Using the simplest explanation, there are 3 ways to pay for Home Care. 1) Private pay, 2) Medicare and 3) Medicaid.

Private Pay

Private pay can be defined as paying out-of-pocket (i.e check, credit card, etc). It also includes Long Term Care (LTC) Insurance, which is an insurance policy similar to a Life Insurance policy in that you pay into it prior to implementing the benefit. The policy reimburses the policy holder for Home Care services…typically with a daily or life time maximum. These are expensive policies, and the policies we are seeing from our clients now will not be available in the future. This is a relatively recent industry, which is only 30-40 years old. Insurance companies are revisiting what they offer due to the larger than expected claims they have been paying on these first and second generation policies. People are living longer, but in many ways “sicker” lives. So, they have been implementing their policies earlier and using them for longer periods of time than expected. If you were lucky and/or smart enough to purchase a LTC policy in the past, congratulations! It will help a great deal in enabling you to be able to afford the best care possible.


Medicare is great for a number of medical bills that a senior will incur, including medications, short-term rehab, durable medical equipment (DME), hospital stays, etc. Medicare is a form of public assistance that you automatically qualify for once you turn 65 years of age. Medicare will also pay for a very limited amount of Home Care, Skilled Nursing, and/or Physical Therapy after a hospital or rehab stay. Although, in most cases, the Home Care won’t cover more than 4 hours/day, 5 days/week for a maximum of 5 weeks. It is often much less. Therefore, Medicare is NOT a good solution for long term Home Care.


Medicaid on the other hand, is certainly a viable long term Home Care solution. Medicaid is another form of public assistance. Unlike Medicare, which is based on age, Medicaid is based on financial need. You can apply for Medicaid at any age as long as you meet the financial qualifications. The process takes approximately 1-2 months if it’s a simple application, but can take much longer if it becomes complicated.   An Elder Care Attorney or Geriatric Care Manager (GCM) can help you navigate the process. Once you become eligible, you must first join a Managed Long Term Care (MLTC) provider, who will manage all of your care, including doctors, medications, etc. The MTLC will have several Home Care partners from which you can choose to provide the Home Care aspect of your care.

Pros and Cons

There are pros and cons associated with each of these options. I will include a brief synopsis below.

Private Pay

  • Pros
    • Best available Home Health Aides – you get what you pay for
    • You can choose any agency you like – no restrictions
    • Offer choices Medicaid agencies don’t – ex. aides that drive
  • Cons
    • Out of pocket expense without Long Term Care insurance


  • Pros
    • No out of pocket expense
    • A good deal of the care coordination is done for you
  • Cons
    • Limited choice of agency – limited to the agencies contracted with the discharging hospital or rehab facility
    • Limited choice of aide – your aide is chosen for you and they most likely won’t drive
    • Poor quality of aide – many Medicaid aides have limited or no experience, language/cultural limitations, etc.
    • Limited care – very short term and limited daily hours

There can often be issues with Medicaid Home Care providers, due to the volume of patients they deal with and the low reimbursement rates they are given by the MLTCs. So, when deciding to use Medicaid for Home Care purposes, you should think it through thoroughly.

If you have additional questions please feel free to give us a call to discuss. We don’t mind helping people navigate the process, even if we aren’t the best Home Care solution for you.

Shan Wade

President – Steps In Home Care