The True Costs of In-Home Care and How to Pay for it

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The True Costs of In-Home Care and How to Pay for it

by ICC on June 12, 2020
June 12, 2020 / by / in

As people age, they may begin to struggle with some of the daily tasks we take for granted when we’re younger or become ill and unable to care for themselves. However, the idea of having to move away from the safety and familiarity of their home to go into assisted living is something they’d prefer to avoid for as long as possible.

The option of having their children or other relatives come to their homes to render assistance is not necessarily available or practical. It, therefore, becomes imperative to procure in-home care services for them. 

The costs of in-home care

The cost of in-home care depends on the nature of the care required. It could be needing someone to come to the home for a couple of hours a day to do the tasks the elderly are battling to perform or provide medical care. This will automatically cost more, especially if 24-hour care is required, as these services need trained nursing or health professionals.

Another factor impacting the cost of in-home care is location. Prices vary from one geographical area to another, with more expensive prices in areas where the cost of living is higher.

What are the payment options?

Medicare

Original Medicare members must meet some requirements for coverage of in-home care services. A medical professional should prescribe home healthcare, certify that the patient is homebound, or in need of intermittent nursing care to improve or maintain their condition.

The diagnosis will determine whether in-home care costs will come out of Part A or Part B of Medicare. Because neither of them will pay the full costs due to copayments, Medicare supplement plan expert, Russel Noga of medisupps.com recommends investigating Mutual of Omaha Medicare Supplement plan G options to ensure that the patient isn’t left facing crippling medical bills.

Reverse mortgage

Securing a reverse mortgage to pay in-home care services is a popular option. It allows the person to access funds from their home equity for expenses, such as in-home care. 

However, applicants must meet several requirements. The home’s title owner must be at least 62 years old to qualify for a reverse mortgage. They have to remain living in the home as their primary residence for the period of the reverse mortgage. 

Outright ownership of the house or at least 50% equity forms another prerequisite. The final mandatory requirement is a meeting with a reverse mortgage counselor approved by the Department of Housing and Urban Development to ensure a full understanding of the reverse mortgage process and its implications.

Annuities

By investing retirement savings or pension payouts in an annuity, a steady income is generated that is guaranteed and can be used for expenses such as in-home care. An annuity is a financial product that is a cross between an investment fund and an insurance policy. 

The sum in the annuity is invested at a fixed or variable rate, depending on the preference of the client. Upon its maturation, withdrawals are permitted. Users are advised to make use of reputable brokers to avoid having unscrupulous people take advantage of them.

Life insurance policy borrowing

Provided a life insurance policy has a cash amount for use during the insured party’s life, such as a whole life policy, a loan against the policy is possible. Generally, the interest rates on such loans are low. 

Timely repayments are necessary as a failure to pay results in interest being added to the loan until it exceeds the amount insured and the policy lapses. The full implications of life insurance policy borrowing should be clearly laid out before choosing it.