How to Plan for In-Home Care: Costs and Funding Strategies

As the cost of eldercare at home continues to rise, more families are turning to in-home care to provide quality support while preserving the comfort and independence of home. However, balancing the emotional, financial, and logistical aspects of caregiving can be challenging.

Creating an age-in-place plan offers a structured approach to addressing these challenges. By evaluating in-home care costs, developing a personalized in-home care strategy, and identifying funding strategies, families can take practical steps to support their loved ones effectively. This guide explores these key elements to help navigate the caregiving journey with confidence.

In-home care costs can vary significantly depending on the level of support required. Standard care typically ranges from $2,500 to $6,000 per month, with higher costs for 24-hour or specialized services, according to Acts Retirement-Life Communities.

Recent data reveals a 14.2% increase in the cost of eldercare at home over the past year, marking the largest year-over-year rise since 2005, according to The Hill. This surge is driven by workforce shortages and rising wages in the home healthcare sector.

The type of support required significantly impacts the overall in-home care costs. According to Firefly Home Care, here are some common services and their typical costs:

• Personal Care Assistance:$20–30 per hour
  Includes help with daily activities such as bathing, dressing, and mobility support.
• Homemaking Services:$25–40 per hour
  Covers tasks like meal preparation, cleaning, and laundry to maintain a safe and comfortable home environment.
• Skilled Nursing or Therapy:$75–150 per hour
  Provides medical care, such as wound care, medication administration, and physical therapy, delivered by licensed professionals.

Understanding these eldercare costs at home highlights the importance of evaluating your loved one’s specific needs and preferences. A thoughtful approach to personalized in-home care planning can help identify the services best suited to their unique situation.

Reviewing financial milestones and assessing available resources is an essential step in effective home care financial planning. Families can align caregiving expenses with their long-term goals by considering these options:

1. Long-Term Care Insurance or Veterans’ Benefits:Explore insurance policies and VA benefits to help offset the cost of in-home care.
2. Community-Based Resources and Programs:Take advantage of local organizations or government initiatives that provide financial assistance for caregiving.
3. Budgeting for Services: Plan for evolving care needs by creating a flexible budget that accounts for eldercare costs at home, including personal care or medical support.

Budgeting for Services: Plan for evolving care needs by creating a flexible budget that accounts for eldercare costs at home, including personal care or medical support.

By exploring this long-term care funding options and understanding the range of available services, families can take thoughtful steps to manage caregiving expenses effectively while ensuring their loved ones receive the necessary support.

A well-thought-out, personalized in-home care plan plays a vital role in fostering safety, independence, and overall well-being for loved ones who need additional support. Developing an effective plan involves evaluating specific needs, the living environment, and available resources to create a tailored approach. Insights from the National Institute on Aging highlight the importance of proactive planning to address the complexities of caregiving effectively.

1. Assess Needs

Start by identifying the level of physical, emotional, and cognitive support required. Consider factors such as:

• Assistance needed with daily activities like bathing, dressing, or eating.
• Medical needs, including chronic conditions or mobility limitations.
• Emotional and mental health considerations, such as companionship or cognitive stimulation.

This initial assessment helps prioritize in-home care costs and provides a foundation for developing a personalized care strategy.

2. Adapt the Home

Modifying the living space is critical to creating a safer and more functional environment. Home adaptations might include:

• Installing grab bars in bathrooms.
• Adding ramps or stair lifts to improve accessibility.
• Replacing slippery flooring with non-slip surfaces.
• Upgrading lighting to reduce fall risks.

These changes align with aging in place strategies and can significantly reduce hazards while enhancing comfort for your loved ones.

3. Coordinate Resources

Building a reliable support network is an important step in addressing various care needs. Consider including:

1. Family members or close friends who can provide caregiving support or emotional assistance.
2. Professional caregivers for medical care or help with daily living activities.
3. Healthcare providers for ongoing medical advice and treatment plans.

Regular communication within the support network can help keep everyone aligned and maintain consistent care.

4. Set Goals

Defining specific caregiving objectives can provide structure and direction. Examples of goals may include:

1. Encouraging participation in daily tasks to promote independence.
2. Managing chronic health conditions through regular medical appointments or therapy.
3. Enhancing quality of life with engaging activities or opportunities

Enhancing quality of life with engaging activities or opportunities for social interaction.

By taking these steps, caregivers can develop a practical in-home care plan that addresses safety, affordability, and evolving needs, supporting their loved ones in a thoughtful and sustainable way.

Funding Strategies for In-Home Care

Explore These Funding Options:

1. Long-Term Care Insurance: Review your policy to determine if it covers in-home services such as personal care or medical support. Policies with this coverage can play a significant role in managing home care financial planning.
2. Government Assistance: Programs like Medicaid and VA benefits are available to help offset expenses for eligible individuals and families. These resources can provide critical support when planning for long-term care funding options.
3. Life Insurance Adjustments: Some policies allow access to the cash value or have other benefits to cover caregiving expenses.  
4. Savings and Home Equity: Reverse mortgages, home equity loans, or personal savings can provide additional financial resources to support care. These options are especially helpful when planning for affordable in-home care solutions that accommodate evolving needs

Careful consideration of these funding strategies can help families navigate the rising costs of eldercare at home while balancing caregiving priorities and minimizing financial strain.

Effectively managing in-home care costs is essential to maintaining affordability without compromising quality. With careful planning and strategic decisions, families can balance caregiving expenses and address their loved ones’ needs.

Tips for Managing Expenses:

• Leverage Tax Benefits: Certain caregiving expenses may qualify for tax deductions, reducing taxable income. Explore top tax strategies for high earners to identify potential savings opportunities for your situation.
• Combine Paid and Unpaid Care: Balancing professional caregiving services with family-provided support can reduce overall costs while maintaining adequate care.
• Prepare for Healthcare Costs: Budget for additional expenses such as medical equipment, therapy, or medications. Learn more about how to plan for rising healthcare and retirement costs to help with financial preparedness.

Careful consideration of these home care financial planning strategies can help families address caregiving costs while maintaining stability and peace of mind.

Proactive long-term care planning helps families navigate changing needs while maintaining consistent support. Developing a strategy that integrates financial, and caregiving considerations can offer stability and flexibility over time.

1. For Retirees:Aligning caregiving plans with retirement goals and budgets helps support independence and long-term well-being. Prioritizing resources and planning can help reduce future financial stress. Recent updates to the CMS 2025 Home Health prospective payment system and related policies provide additional context for retirees looking to make informed decisions about healthcare expenses.
2. For Caregivers: Exploring options such as government assistance programs, long-term care insurance, and potential tax benefits can help manage the financial impact of caregiving responsibilities.

Reflecting on financial priorities and available resources enables families to create a sustainable long-term care funding strategy tailored to their unique circumstances.

Conclusion

 

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This blog expresses the author’s views as of the date indicated, are subject to change without notice, and may not be updated.  The information contained within is believed to be from reliable sources.  However, its accurateness, completeness, and the opinions based thereon by the author are not guaranteed – no responsibility is assumed for omissions or errors.  This blog aims to expose you to ideas and financial vehicles that may help you work towards your financial goals. No promises or guarantees are made that you will accomplish such goals.  

Past performance is no guarantee of future results, and any expected returns or hypothetical projections may not reflect actual future performance or outcomes. All investments involve risk and may lose money. Nothing in this document should be construed as investment, tax, financial, accounting, or legal advice. Each prospective investor must evaluate and investigate any investments considered or any investment strategies or recommendations described herein (including the risks and merits thereof), seek professional advice for their particular circumstances, and inform themselves about the tax or other consequences of any investments or services considered.   

References

Clifton Larson Allen. (December 6, 2024). CMS Finalizes 2025 Home Health PPS Rates and Policies.Clifton Larson Allen. https://www.claconnect.com/en/resources/articles/24/cms-2025-home-health-pps-rates-policies

Acts Retirement-Life Communities. (n.d.). Understanding CCRC Pricing and Fees. Acts Retirement-Life Communities. https://www.actsretirement.org/resources-advice/retirement-communities/understanding-ccrc-pricing-and-fees/

Christian. (August 1, 2024). In-Home Care Costs and Services. Firefly Home Care. https://fireflyhomecare.com/sb/in-home-care-cost/

National Institute on Aging. (May 23, 2023). Advance Care Planning and Health Care Decisions: Tips for Caregivers and Families. National Institute on Aging. Retrieved January 24, 2025, from https://www.nia.nih.gov/health/advance-care-planning/advance-care-planning-and-health-care-decisions-tips-caregivers-and

O’Connell-Domenech, Alejandra. (April 10, 2024). Eldercare and Home Healthcare See Largest-Ever Price Increase.The Hill. Retrieved from https://thehill.com/changing-america/well-being/longevity/4586413-eldercare-home-healthcare-largest-ever-price-increase/