Does Medicaid Pay for In-Home Care?

If you have an aging loved one, you’ve likely considered what care or assistance they might need in the future. There are many senior care options available, depending on your relative’s health status and lifestyle preferences. However, many seniors feel more comfortable aging in the comfort and privacy of their own homes, making access to quality home care services crucial. 

According to a Cross Country Workforce Solutions Group survey, 70% of adults aged 50 and older would prefer to receive care at home rather than move to a retirement community or nursing home. Home care helps older adults age safely in place by offering services from personal care assistance to companionship, but it can be pricey depending on how much care is needed. However, if your relative is 65 and older or on a low income, they may be eligible for financial assistance through Medicaid, a state-administered health insurance program. 

This guide covers the basics of home care and what services are covered by Medicaid. Additionally, it outlines different Medicaid programs and eligibility requirements, as well as additional financial options that can make home care more affordable. 

Medicaid and Home Care: The Basics

As you navigate the process of finding and paying for care, it’s important to understand available resources. Learning the basics of home care and Medicaid can help you decide whether this is the right route for you. 

Medicaid Explained

Medicaid is a federally controlled, state-administered health insurance program providing coverage for low-income families. As of April 2023, the program insured over 94 million people, including seniors and disabled adults. Many seniors enroll in Medicaid because of its comprehensive coverage and Medicare compatibility. 

Although exact eligibility requirements vary by state, coverage is typically decided based on:

• Income level and assets
• State residency
• Citizenship
• Immigration status

For more information, check out your state’s Medicaid profile. 

Home Care and Home Health Care Explained

There are two types of senior care administered at home. Nonmedical home care provides care for seniors wishing to age in place who don’t require acute medical care. A personal care assistant travels to your loved one’s home to provide services such as help with daily living activities and light housekeeping, based on their individualized care plan. 

Older adults requiring skilled nursing services may find home health care more beneficial. This type of care is usually ordered by a doctor after hospitalization due to an injury or illness. Home health aides typically receive formal training and can assist with medical services that can include changing simple dressings to troubleshooting medical equipment.  

The following table breaks down services provided by each care type. 

Does Medicaid Cover Home Care Costs?

Medicaid provides home care coverage for seniors who require assistance to remain safely at home and don’t wish to relocate to a nursing home. In most states, Medicaid allows recipients to choose their own home care provider, whether it’s through an agency or a family caregiver. Home care coverage can also extend to various settings, including a relative or friend’s home, an adult foster care home or a senior living residence.

Because Medicaid is administered by individual states, exact coverage varies. Each state also offers its own waivers to provide assistance for home or community-based services, which includes home care.

What Home Care Services Does Medicaid Cover?

Medicaid covers numerous in-home care services, although exact services vary depending on each state’s program. Below is an overview of common services Medicaid may cover. 

Which Medicaid Programs Pay for In-Home Care?

You may have access to home care services through your state’s regular Medicaid plan. However, each state also offers waiver programs to further reduce costs. Here are a few coverage options. 

Regular Medicaid

The federal government requires states to make home health care services available with their regular Medicaid programs. Although personal care assistance and other nonmedical services aren’t federally mandated, many states still offer coverage. 

Additionally, some states implement the Community First Choice (CFC) program, an alternative Medicaid state plan option established by the Affordable Care Act. CFC allows states to offer home and community-based personal care services to Medicaid enrollees, which includes personal hygiene assistance and other daily living support such as light housekeeping and transportation. Nine states currently offer CFC, including:

• Alaska
• California
• Connecticut
• Maryland
• Montana
• New York
• Oregon
• Texas
• Washington

HCBS Waivers

Home and Community-Based Services (HCBS) waivers, or Section 1915(c) waivers, can provide additional home care coverage. Nearly every state and Washington D.C. offers HCBS waivers to help seniors access home care rather than move to a residential community. Eligibility requirements vary by state, but typically individuals must demonstrate the need for nursing home-level care. You may be put on a waiting list until funding becomes available

HCBS waivers typically provide more coverage than regular Medicaid programs for services such as:

• Adult day care
• Companionship
• Daily living assistance
• Personal emergency response systems
• Durable medical equipment

Other Medicaid Waivers

Some states offer services via Section 1115 Demonstrations Waivers, which allow them more flexibility in designing and improving their Medicaid programs. When states present new policies, they’re reviewed by the Centers for Medicare & Medicaid Services (CMS) to ensure the proposed waiver and expenditures align with federal policies. These waivers typically cover the same home care services as HCBS waivers, and in some cases, eliminate state waiting lists. 

You may also be eligible for coverage through the Program of All-Inclusive Care for the Elderly (PACE), which is available in 32 states and Washington D.C. Participants must meet certain requirements such as age and functional need. The program covers all Medicaid services, including home care, adult day care and skilled nursing services. Although services are primarily provided at adult day health centers, they can be supplemented by in-home and referral services, depending on your needs. 

Who Is Eligible for In-Home Care Medicaid Coverage?

To be eligible for Medicaid, certain state criteria must be met. For starters, you must be a resident in the state you’re applying for coverage. Additional criteria may include:

• Specific group eligibility: This involves meeting a specific age threshold or having a disability or illness. 
• Income limits: Medicaid evaluates income and assets for financial eligibility. As of 2023, individuals must earn less than 300% of Social Security, or roughly $2,742 per month, and have less than $2,000 in assets in most cases. 
• Level of care eligibility: Some states may require that an applicant need assistance with a certain number of daily activities for approval. Physician verification is usually required.

How Much Does Home Care Cost?

Home care costs vary depending on the state and city of residence. According to the 2021 Genworth Cost of Care Survey, the national average for home care is about $4,957, while home health care costs slightly more at $5,148. The average American spends about $59,488 on home care or $61,776 for home health care annually, which is about $163 or $169 per day. 

Ways to Pay for In-Home Care

If Medicaid doesn’t provide enough coverage and you can’t pay out of pocket, there are additional financial assistance options that may help, including:

• Medicare: Medicare Part A and Part B cover certain home health care services such as medically necessary skilled nursing care, rehabilitative therapies and medical supplies or equipment. However, it doesn’t cover 24-hour care, meal delivery or daily living services not outlined in your care plan. It also doesn’t cover long-term care.
• Veterans’ benefits: Veterans who are eligible for community care and meet clinical criteria for services can access in-home or home health care with their VA benefits. Services range from 24-hour medical care to personal care assistance and can be administered in various settings. 
• Long-term care (LTC) insurance: Most LTC insurance policies cover home care services, including personal care assistance, meal preparation and housekeeping, as long as they’re deemed necessary. Skilled nursing care and rehabilitative therapies are also covered. 
• Reverse mortgages: Homeowners aged 62 or older may qualify for a reverse mortgage, an amount of borrowed money received as a lump sum or monthly payment based on how much home equity you have. There are no restrictions on how you use these funds, meaning they can be applied to home care costs. 
• Private health insurance: Most private health insurance plans don’t cover nonmedical care but may cover a portion of skilled nursing care. Your insurance policy should outline the exact services and coverage. 

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