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Long-term care services, such as home care, help seniors meet health and/or personal care needs over an extended period of time. These can provide support and security for your loved one, plus relief for you and your family. If you don’t have the time, money, or energy to take on the role of a primary caregiver for your loved one, you may have hired — or may be considering hiring — in-home help. Consider long-term care insurance as a payment option, and learn how it can help ensure your loved one’s in-home care services are covered.

Key Takeaways

Consider long-term care insurance as a payment option for in-home care. Coverage is primarily intended for nonmedical care, but some policies may cover parts of home health care.
Comprehensive long-term care insurance plans can cover a range of services. These include some skilled nursing and assistance with activities of daily living (ADLs).
Long-term care insurance is best purchased when a person is in their mid-50s. Purchasing a policy too early or too late can affect premiums and eligibility.
There are other ways to pay for in-home care. Other payment options include insurance plans, veterans benefits, and reverse mortgages.

Long-term care insurance: What is it and who needs it?

A long-term care insurance policy reimburses the policyholder for the costs of long-term care services. It works a lot like policies for home or auto insurance in that the policyholder pays premiums and makes claims if they need to cover services.

Roughly 70% of Americans ages 65+ will need at least some level of long-term care, and the costs can be remarkably pricey and vary greatly.^[01] Long-term care services aren’t always covered by medical insurance, and Medicare benefits can be limited. That’s why it’s important for older adults to plan ahead with long-term care insurance to ensure the services they may need will be covered.

Who should consider long-term care insurance?

Aging adults or anyone with a chronic disability or health condition will benefit most from having long-term care insurance. Even young people may need long-term care in the case of illness or an accident, and long-term care insurance can be a nice financial safety net to have. For example, the national median cost of long-term care ranged between $54,000 to $108,000 per year in 2021.^[02] If you or your loved one is unable to pay these costs using personal funds, purchasing a long-term care insurance policy may be wise.

As far as when to purchase a policy, it’s best not to wait until health issues arise. Rates tend to be lower the younger the buyer is, and, because of certain qualification requirements, waiting longer to purchase a policy could affect a person’s eligibility. However, keep in mind that if a person purchases a policy too young, they could spend a long period of time paying premiums for coverage they don’t necessarily need yet.

Generally, experts recommend looking for long-term care insurance while you’re still in good health.^[03] Experts at the American Association for Long-Term Care Insurance (AALTCI) recommend taking out a policy in one’s mid-50s. People tend to start making long-term care insurance claims in their 70s and 80s.^[04]

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Does long-term care insurance cover in-home care?

Yes, long-term care insurance can cover the costs of many in-home care services.

Before purchasing, you’ll want to have a good understanding of what is and isn’t covered by a long-term care insurance policy. Depending on the policy, covered in-home services can include the following:

Some skilled nursing services
Rehabilitation therapy
Speech, physical, and occupational therapies
Short-term hospice care
Assistance with activities of daily living (ADLs), such as dressing, bathing, and using the restroom
Some homemaker services, such as housekeeping and meal preparation, but only if it’s provided alongside personal care services ^[05]

Does long-term care insurance cover home health care services?

Long-term care insurance is primarily designed to cover expenses of nonmedical home care . It can also cover some expenses of home health care, which is medical in naure, but that’s fairly uncommon. Medical care is most often covered by private health insurance or Medicare.

Be aware that coverage varies from policy to policy. Some will only cover medical services involved with home health care, some will just cover the nonmedical services involved with basic home care, while others will cover some of both. Generally, policies that cover homemaker services, such as meal preparation or housekeeping, require that those services are provided in conjunction with personal care services.^[05] Talk with your parent’s insurance provider about what a policy covers and what it doesn’t.

What else is covered?

If at any point your loved one’s needs increase and they need to make a move to facility-based care, such as a nursing home or assisted living community, know that long-term care insurance can provide coverage in certain settings outside of the home, too. Most long-term care insurance policies are comprehensive and can cover services in the following settings:

Adult day care centers
Nursing homes
Assisted living facilities
Memory care facilities
Places that offer respite care and hospice ^[05]

What’s not covered?

Some policies limit what medical services are covered. If your loved one has a preexisting medical condition or their care is provided by a family member, it may affect their eligibility for long-term care insurance. Your parent may also be denied coverage if they report alcoholism, drug use, or certain mental illnesses.

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How to receive long-term care benefits

To receive benefits from a long-term care insurance policy, the following criteria may be required:

The benefit trigger, which is a set of criteria determined by your loved one’s insurance company that determine a person’s eligibility for long-term care benefits. The following should be noted regarding benefit triggers:
- They’re usually defined based on one’s cognitive impairments and their ability to perform activities of daily living (ADLs).
- A company-sponsored nurse or social worker must assess your loved one’s condition to determine if the benefit trigger criteria have been met. Most policies will pay benefits once a person needs help with two or more ADLs or they have a cognitive impairment.
- Once your loved one has been assessed, the insurance company will approve a care plan. This plan essentially outlines which benefits your loved one will qualify for.
The elimination period, which refers to a length of time that must pass between the occurrence of a benefit trigger and payment for services. You can consider it to be like the deductible on car insurance, except it’s measured in time rather than a dollar amount. The following should also be noted regarding elimination periods:
- At the time of purchase, most policies will provide an option of 30, 60, or 90 days. Once a benefit trigger occurs, that’s the amount of time that must go by before you or your loved one will start receiving reimbursement for services. Until then, the policyholder is responsible for the cost of any services they receive. Some policies may even require your loved one to receive and pay for care during the elimination period.
- When the benefits do kick in, most policies will cover your loved one’s care costs up to a predetermined daily amount until a lifetime maximum is reached.^[06]

Filling the gaps: How to cover home care expenses that long-term care insurance doesn’t

If you find out your loved one needs services that long-term care insurance doesn’t cover, you may find peace in knowing that there’s a range of ways to pay for in-home care. You or your loved one may be able to cover certain costs using the following payment options:

Medicare. If your loved one needs insurance for home health care and their long-term care insurance policy doesn’t cover medical costs, Medicare may help. Provided eligibility requirements are met, Medicare can cover the costs of short-term home health care and medical services, such as skilled nursing, prescription medications, and medical equipment or supplies for at-home use.
Medicaid. Designed for seniors with low income or limited assets, Medicaid can help cover the costs of both home health care and personal care services so long as the senior meets strict eligibility requirements. If your loved one chooses this option, consider working with an elder law attorney or Medicaid planning specialist. They’ll assist with the Medicaid planning and application processes and can help determine which long-term care Medicaid benefits may be most beneficial.
Life insurance. It’s common for life insurance to be bundled alongside long-term care insurance. Life insurance can be used to pay for long-term care in a few different ways.
Veterans benefits. The Department of Veterans Affairs (VA) offers eligible veterans an array of benefits that can help support their desire to age in place. For example, Aid and Attendance and Housebound pensions can help wartime veterans and their surviving spouses cover the costs of in-home care.
Reverse mortgage. This is a process that involves borrowing money based on the equity of a home. While this can be very risky, and one must meet eligibility criteria, the proceeds can be used to pay for in-home care.
Private pay. When you think “private pay,” you may only think of personal cash savings. However, private funds can come from a variety of sources, including investments, annuities, real estate, Social Security benefits, and retirement savings accounts, among others. Talk with your loved one about their private pay options and see if they’re comfortable using any of them to fund their in-home care.

Planning ahead for in-home care

Before hiring in-home care, consider having a conversation with your loved one and their doctor. Ask your parent what type of care they’d truly benefit most from, and have their doctor perform a functional needs assessment. This can give you and your parent a better idea of what they’re struggling with and what type of care to hire — nonmedical or medical. Once you know that, it will be easier to determine if long-term care insurance is right for your parent.

It’s normal to need a guiding hand. If you think you’d benefit from further assistance, consider reaching out to a Senior Care Advisor. They can offer one-on-one attention and a simplified walk-through of in-home care types, payment options, and more.

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References

Johnson, R.W. (2019, April 3). What is the lifetime risk of needing and receiving long-term services and supports?Office of the Assistant Secretary for Planning and Evaluation (ASPE) and Urban Institute.
Genworth. (2022, June 2). Cost of Care Survey.
Kurt, D. (2021, September 29).The best time to get long-term care insurance. Investopedia.
The American Association for Long-Term Care Insurance. What’s the best age to buy long-term care insurance.
Administration for Community Living (ACL). (2020, February 18). What long-term care insurance covers.
Administration for Community Living (ACL). (2020, February 18). Receiving long-term care insurance benefits.

Meet the Author

Grace Styron

Grace Styron is a writer at OurParents specializing in assistive technology, memory care, and home care. Before writing about healthy aging, she worked for an online women’s lifestyle magazine and as a grant writer for a nonprofit regenerative permaculture farm in Virginia. She earned her bachelor’s degree from Missouri State University.

Reviewed byTodd Austin

The information contained in this article is for informational purposes only and is not intended to constitute medical, legal or financial advice or create a professional relationship between A Place for Mom (of which OurParents is a trademark) and the reader. Always seek the advice of your health care provider, attorney or financial advisor with respect to any particular matter and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not recommend or endorse the contents of the third-party sites.

Using Long-Term Care Insurance for In-Home Care