The cost for long-term care and home healthcare services varies. It depends on the type of care a person needs and for how long. For most people and families it's a major expense. Often people pay for these services using a combination of sources. These include federal and state government programs, personal income and savings, and private insurance. By contrast, many hospice care programs are provided regardless of the person’s ability to pay. Most hospice costs are also covered by Medicare. Here’s a guide to payment choices for these healthcare services.

Self-pay (private pay)

A person or their family may have to pay for long-term care and home healthcare services on their own. This is the case if they don't meet the requirements of public or private third-party payers. This means using their personal income, retirement funds, and any other savings. Self-pay is not an affordable choice for many Americans.

Public third-party payers

Medicare

You are likely eligible for Medicare, the federal insurance program for older adults if you are age 65 or older. People who are unable to be active outside the home, under a healthcare provider's care, and in need of skilled nursing or therapy may also be eligible for Medicare. But there are rules and restrictions. Here are some things to know:

• Long-term care. Medicare doesn’t cover most long-term care services. But it can cover some short-term care costs in a skilled nursing facility after a hospital stay if certain things are needed. These include IV (intravenous) lines, tube feedings, or skilled nursing care.

• Home healthcare. A healthcare provider must authorize and at different times review the home healthcare plan of the person. Home healthcare services covered by Medicare must be part-time. Services must also be provided by a Medicare-certified home health agency. Or an agency that meets the minimum federal requirements of care and cost.

• Hospice. Hospice care coverage by Medicare needs certification from a healthcare provider that the person has a life-limiting condition.

Medicaid

Medicaid is a joint federal-state medical assistance program for people and families with low incomes. It covers some long-term care services for people who qualify. Medicaid coverage and eligibility varies from state to state. But all states must provide home healthcare coverage to people who:

• Get federally assisted income maintenance payments, such as Social Security or Temporary Assistance for Needy Families.

• Are found to be "categorically needy." They may also be "medically needy." This refers to people who are older, blind, or disabled, but have incomes too high to qualify under "categorically needy." Under the federal Medicaid rules, home health program coverage must include certain services. These include part-time nursing, healthcare services, and medical supplies and equipment. Some states may cover other services as well. Medicaid hospice care coverage is very similar to Medicare.

Other public third-party payers

• Older Americans Act (OAA). The OAA funds state and local social service programs for frail and disabled older people. This is so they can continue independent living in their communities. Coverage for long-term care services is limited to people who meet certain requirements. Coverage may include home healthcare, personal care, and help with chores, meals, and shopping. People must be ages 60 and older. 

• Department of Veterans Affairs (VA). The VA covers long-term care for disabilities that are service-related. And for nonservice-related disabilities if veterans can’t afford care. Home healthcare is also given to ill or disabled eligible veterans. Authorization from a healthcare provider is needed. Services must be given through the VA’s hospital-based home care units. Nonmedical home healthcare services are often not covered.

• Social services block grant programs. Federal social services block grants are awarded to the states for service needs each year. Some of these funds are given to home healthcare agencies and homemaker or chore worker services. Contact your state health department and Office on Aging for more information.

• Community organizations. Some community organizations may pay for all or part of home health or hospice care services. This depends on a person’s eligibility and finances.

Private third-party payers

• Private health insurance. Most health insurance policies cover some home healthcare services for immediate or acute health needs. But coverage for long-term services varies from plan to plan. Sometimes insurance companies will pay for skilled professional home healthcare under a cost-sharing plan. Check your plan’s coverage with your insurance provider.

• Long-term care insurance. Long-term care insurance policies can cover a wide range of benefits. These include home care, nursing home care, and hospice care. Check your coverage carefully as policies vary. It’s less expensive to buy these policies when you are younger. Costs go up for people who are older or who have pre-existing conditions.

• TRICARE. This was formerly known as CHAMPUS (Civilian Health and Medical Program of the Uniformed Services). TRICARE generally doesn’t cover long-term care. But it covers some home healthcare in a cost-sharing plan to dependents of active military personnel and military retirees. It also provides a hospice benefit to its beneficiaries with life-limiting conditions. This benefit may provide nursing, social work services, therapies, personal care, medicines, and medical supplies and equipment.

• Workers' compensation. If a person needs medical home healthcare services because of an injury on the job, they may be eligible for coverage through a workers' compensation plan.

• Managed care organizations. These are group health plans that may cover long-term care, home health, and hospice care services. Managed care organizations contracting with Medicare must provide the full range of Medicare-covered home health and hospice services that are available. These organizations must be approved ahead of time.