Home care services can be paid for directly by the patient and family or through several public and private sources. If the care is medically necessary and the patient meets certain coverage requirements, many public third-party payors such as Medicare, Medicaid, VA (Veterans Administration), and many private third-party payors, such as commercial health insurance companies and managed care organizations often pay for home health care services. Medicaid coverage varies depending on the state in which you reside and of course, different private insurance carriers have different policies. For services that are not covered, patients may choose to pay out of their own pockets. Some agencies are subsidized by community groups and some receive funding from local and state government to assist patients in paying for their care when they have no available resources. With support from philanthropic sources, some agencies provide care to all, regardless of ability to pay.

Public Third-Party Payors

To qualify for the Medicare Home Care Benefit: Most Americans over age 65 are eligible for the federal Medicare program. If an individual is homebound, under a physician’s care, and requires medically necessary skilled nursing or therapy services, he or she may be eligible for services provided by a Medicare-certified home health agency. Depending on the patient’s condition, Medicare may pay for intermittent skilled nursing; physical, occupational, and speech therapies; medical social services; home care aide services; and medical equipment and supplies.

The referring physician must authorize and periodically review the patient’s plan of care. With the exception of hospice care, the services the patient receives must be intermittent or part time and provided through a Medicare-certified home health agency for reimbursement. Hospice services are covered by Medicare for individuals who are terminally ill and have a life expectancy of six months or less. There is no requirement for the patient to be homebound or in need of skilled nursing care. A physician’s certification is necessary to qualify for the Medicare Hospice Benefit.

To qualify for Medicaid coverage of home care: States are only mandated to provide home health services to individuals who receive federally assisted income maintenance programs, such as Social Security Income and Aid to Families with Dependent Children (AFDC), and individuals who are "categorically needy."

Categorically needy recipients include certain aged, blind, and/or disabled individuals who have incomes that are too high to qualify for mandatory coverage but below federal poverty levels. Individuals younger than 21 who meet income and resources requirements for AFDC, yet otherwise are ineligible for AFDC, also qualify as categorically needy.

Under federal Medicaid rules, coverage of home health services must include part-time nursing, home care aide services, and medical supplies and equipment. At the state’s option, Medicaid also may cover audiology; physical, occupational, and speech therapies; and medical social services. Hospice is a Medicaid-covered benefit in 38 states.

Veterans Administration: Veterans who are at least 50% disabled due to a service-related condition may be eligible for some home health care services provided by the Veterans Administration (VA). A doctor must authorize these services, which must be delivered through the VA’s network of hospital-based home care units.

Older Americans Act (OAA): The OAA provides federal funds for state and local social service programs that enable frail and disabled older individuals to remain independent in their communities. This funding covers home care aides, personal care, chore, escort, meal delivery, and shopping services for individuals with the greatest social and financial need who are 60 years of age and older. Individuals often request these services through an Area Agency on Aging.

Community Organizations: Some community organizations, along with state and local governments, provide funds for home health and supportive care. Depending on an individual’s eligibility and financial circumstances, these organizations may pay for all or a portion of the needed services. Hospital discharge planners, social workers, local offices on aging, the United Way and the American Cancer Society are excellent sources for information about what’s available in your community.

Private Third-Party Payors

Commercial health insurance companies: Most private insurance policies include some home care service for acute needs, but benefits for long-term care vary from plan to plan. Be sure to inquire about your insurance coverage, not only for home care, but also for home hospice care.

Champus (TRICARE Standard): The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) (now called TRICARE Standard in most of the US) covers skilled nursing care and other professional medical home care services on a cost-shared basis for dependents of active military personnel and military retirees and their dependents and survivors. CHAMPUS offers a hospice benefit to its terminally ill beneficiaries. This benefit covers nursing, social work and counseling services, personal care, medications, and medical supplies and equipment.

Worker’s Compensation: Any individual requiring medically necessary home care services as a result of injury on the job is eligible to receive coverage through workers’ compensation.

Managed Care Organizations: These and other group health plans sometimes include coverage for home care services. Managed care organizations contracting with Medicare must provide the full ranges of Medicare-covered home health services available in a particular geographic region. Coverage may be limited to doctor-directed medical services and treatments. Choice of agency, however, is restricted. Be sure to inquire about your coverage.

Private pay or self pay: If insurance coverage is not available or is insufficient, the patient and the family can engage providers and pay for services out of pocket. Most home care agencies provide some services without charge if patients have limited or no financial resources.