How Is Home Care Paid For?

Home health care is paid for by a variety of different sources. The major sources of funding are:


Medicare is a national health insurance program designed primarily for people 65 years of age and older, some disabled people less than 65 years of age and people with end-stage renal disease. Medicare is provided by the Federal government. To get Medicare home health care, you must meet the following four (4) conditions:

  1. A doctor must decide that you need medical care in your home and make a plan for your care at home; and
  2. You must need at least one of the following services: intermittent (not full time) skilled nursing care, or physical therapy or speech pathology services or continue to need occupational therapy; and
  3. You must be homebound. This means that you are not normally able to leave your home and if you do it is a major event. When you do leave your home, it must be infrequent, for a short period of time, or to get medical care; and
  4. The home health agency caring for you is approved by the Medicare program. Agencies who are approved are sometimes referred to as: “Medicare certified agencies” – like Visiting Nurse Associations (VNAs).

If you meet all four (4) of the conditions, Medicare will cover:

  • Skilled nursing on a part-time basis. This care can only be delivered safely by a registered or licensed practical nurse.
  • Home health aide services on a part time basis. These services include help with personal care such as bathing, using the toilet, or dressing. Medicare does not cover home health aide services unless you are also getting skilled care such as nursing or other therapy.
  • Physical therapy, speech language pathology services and occupational therapy if the doctor says you need it.
  • Hospice care
  • Medical social services to help with social and emotional concerns related to your illness
  • Certain medical supplies, like wound dressings but no prescription drugs.

Medicare does not pay for:

  • 24-hour per day care in the home.
  • Prescription drugs.
  • Meals delivered to your home.
  • Homemaker services like cleaning, laundry and shopping.

If you would like more information about Medicare, call 1-800-MEDICARE.


Medicaid is a program funded jointly by the Federal government and the state. It provides health care services to low-income persons. To qualify for Medicaid, you must have a low income, little savings and have no other substantial assets, as defined by your state.

Medicaid coverage varies from state to state. In all states, Medicaid pays for basic home health care:

  • Skilled nursing (part-time);
  • Home health aide services; and
  • Medical supplies and equipment.

Medicaid may pay for homemaker, personal care and other services not paid for by Medicare.

It is up to the state to decide if it wants to provide any therapy or social services. In 38 states, hospice care is Medicaid-covered.

To find out more information on what Medicaid covers for home health care in your state, call your State medical assistance office.

Private Insurance

Typically, insurance plans cover some home health care services for acute needs. As with Medicare, most insurance plans require that a doctor determine that the care is needed and has developed a plan for care in the home. There are four (4) major types of plans that pay for home health care:

  • Indemnity plans
  • Health Maintenance Organizations (HMOs)
  • Blue Cross and Blue Shield
  • Medicare Managed Care Organizations (MCO): Medicare MCOs must offer all the same services as Medicare.

Home health care services paid for by private insurance generally require the patient to pay a portion of the services (co-pay and/or deductible).

Hospice care and long term care coverage vary from plan to plan. Check with your insurance company to see what services are covered, what you may be responsible to pay and any other plan requirements.

Payment by Individual (Out of Pocket)

There may be times when home health care is not covered by Medicare, Medicaid or private insurance such as:

  • The benefits have been exhausted;
  • The insurance will no longer cover the care;
  • The person may not qualify for federal or state financial assistance;
  • The person no longer meets the Medicare and/or Medicaid conditions to receive care.

Whatever the reason may be, the fact is, many patients and their families prefer to pay for home health care services privately. It allows them more flexibility in the type and amount of services they wish to receive. This avoids any limits on care that a government or insurance plan may fund.

Home health care services can be purchased by the hour or by the visit (for home health aides, a four hour minimum is common). Many home health care agencies have someone who will come to your house to evaluate your needs and help you to create a plan. These planning services are usually offered on an hourly basis and range in cost from $50 to $150 per hour.

Check with your local VNA for the types of services they have available.

To Find A VNA near you, simply enter your zip code in the Find a VNA Search Window in the upper left hand corner.

Copyright 2004 © Visiting Nurse Associations of America