Home Health Care Costs

Home health care costs are the cost of delivering care in a person's own home, and the phrase covers two very different things that are priced and paid for in opposite ways. The first is Medicare's home health benefit: a skilled, physician-ordered, intermittent service that a certified home health agency delivers, and that Medicare pays for in full when its conditions are met. The second is custodial care, meaning ongoing help with bathing, dressing, meals, toileting and supervision, which is what most families are describing when they ask what home care costs, and which Medicare does not cover at all.

The two are easy to confuse because the same agency can send the same aide to the same house to do the same task, and whether Medicare pays turns on something the family cannot see: whether a qualifying skilled need is running at that moment.

The three conditions are the whole test, and they are conjunctive. 42 CFR 409.42 says a beneficiary must meet each of them. Under (a) the beneficiary must be confined to the home, or in an institution that is not a hospital or a skilled nursing or nursing facility. Under (b) the beneficiary must be under the care of a physician or allowed practitioner "who establishes the plan of care". Under (c) the beneficiary must need at least one of: intermittent skilled nursing services, physical therapy, speech-language pathology services, or, in the circumstances the paragraph sets out, occupational therapy. Paragraphs (d) and (e) add that the care must be under a plan of care meeting §409.43 and must be furnished by, or under arrangements made by, a participating home health agency.

Medicare.gov puts the homebound condition in a form a family can apply. Both of two things must be true: leaving home "isn't recommended because of your condition" or you have trouble leaving without help such as a cane, wheelchair, walker, crutches, special transportation or another person; and you are "normally unable to leave your home and leaving takes a lot of effort". Medicare adds two clarifications that matter in practice: short, infrequent absences for non-medical reasons such as religious services are allowed, and, in Medicare's own words, "You can still get home health care if you attend adult day care."

Now the part that costs families the most money to misunderstand. Medicare.gov's list of covered services includes "Part-time or intermittent home health aide care", and then states the condition in a parenthesis: "(only if you're also getting skilled nursing care, physical therapy, speech-language pathology services, or occupational therapy at the same time)". So personal care is not excluded because it is personal care. It is covered as a dependent service that rides on a qualifying skilled need, and it stops the moment that need does.

The exclusion that then bites is 42 CFR 411.15(g), which reads in full: "Custodial care, except as necessary for the palliation or management of terminal illness, as provided in part 418 of this chapter. (Custodial care is any care that does not meet the requirements for coverage as SNF care as set forth in §§ 409.31 through 409.35 of this chapter.)" Two things are worth noticing. The definition is negative: custodial care is defined as whatever fails the skilled test, rather than by describing the tasks. And the exception written into the exclusion is the hospice benefit. It is not the only route around the exclusion, since 42 CFR 460.94(b)(5) also waives §411.15(g) for services furnished to a participant in a PACE program, but for a household outside hospice and outside PACE the exclusion is the operative rule.

The four things Medicare names as not covered are worth memorizing because each one is a real household expense: 24-hour-a-day care at home; home meal delivery; homemaker services such as shopping and cleaning that are unrelated to your care plan; and, in Medicare's words, "custodial or personal care that helps you with daily living activities (like bathing, dressing, or using the bathroom), when this is the only care you need."

How much care the benefit actually delivers. Medicare.gov states that if you qualify you can get unlimited home health visits, and that "in most cases, 'part-time or intermittent' means you may be able to get skilled nursing care and home health aide services up to 8 hours a day (combined), for a maximum of 28 hours a week", with the possibility of more for a short time, under 8 hours a day and up to 35 hours a week, where the provider decides it is necessary. That is a real amount of help. It is also capped, intermittent, and tied to a skilled need, which is why it does not solve a continuous-supervision problem.

What is left, and who pays for it. Ongoing custodial care at home has four ordinary funding routes, and a household usually ends up using more than one. Private payment out of income and savings is the default. A long-term care insurance policy pays when its own benefit triggers are met, which are written around activities of daily living and cognitive impairment rather than around Medicare's skilled test, so a policy can be paying at exactly the point Medicare stops. A Medicaid home and community-based services waiver can fund care at home for someone who meets both the state's level-of-care test and its financial tests. And for a qualifying wartime veteran, 38 U.S.C. 1521(d) provides an increased pension rate where the veteran "is in need of regular aid and attendance", reduced by the veteran's annual income; 38 U.S.C. 1541(d) does the same for a surviving spouse who is entitled to pension and is in need of regular aid and attendance. Both rates are adjusted annually.

A structural note on cost sharing that surprises people. For covered home health services the beneficiary pays nothing, which is unusual in Medicare. But equipment is separate: after the Part B deductible, the beneficiary pays 20 percent of the Medicare-approved amount for Medicare-covered durable medical equipment. So a benefit that is free can still generate a bill, and the bill is for the walker rather than for the nurse.

1. A provider assesses and certifies. A health care provider must assess the patient face to face before certifying the need for home health services, must order the care, and a Medicare-certified home health agency must deliver it.

2. A plan of care is established by the physician or allowed practitioner, meeting the requirements of 42 CFR 409.43.

3. The skilled service runs, and the aide rides on it. Nursing, physical therapy, speech-language pathology or qualifying occupational therapy is the qualifying need; aide help with bathing and dressing is covered alongside it.

4. Cost sharing is nothing on the services and 20 percent of the Medicare-approved amount on durable medical equipment after the Part B deductible. The agency must tell you in advance, verbally and in writing, if Medicare will not pay for something, using an Advance Beneficiary Notice.

5. The skilled need ends, and the coverage ends with it. Whatever help remains is custodial care under 42 CFR 411.15(g), and the household is paying for it.

A hypothetical. After a hip replacement Ruth is homebound, her physician establishes a plan of care, and she needs physical therapy twice a week. Because that skilled need exists, Medicare also covers a home health aide who comes three mornings a week for three hours to help her bathe and dress. Ruth pays nothing for any of it, apart from 20 percent of the Medicare-approved amount for her walker.

Ten weeks later the therapy goals are met and the skilled need ends. Ruth still needs exactly the same three mornings of help. That identical service is now custodial care, so Medicare pays nothing toward it. At a round hypothetical rate of $30 an hour, three hours a morning, three mornings a week, the cost is 3 x 3 x $30 = $270 a week, or $270 x 52 = $14,040 a year, and it lands entirely on Ruth. Nothing about her need changed on the day the coverage stopped; only the payer did. The $30 here is a deliberately round illustration rather than a survey figure; national median hourly rates are on our elder care costs page.

Pros

• When the conditions are met, covered home health services carry no cost sharing at all, which is rare in Medicare.
• The benefit has no visit limit and no requirement of a prior hospital stay, unlike skilled nursing facility coverage.
• Personal care is genuinely covered alongside a qualifying skilled service, so the early weeks after a hospitalization can be well supported.
• Care at home is usually cheaper per hour than a facility, so a household needing a few hours a day may pay far less than a residential setting would cost.
• Attending an adult day program does not disqualify someone from the home health benefit, so the two can run together.

Cons

• The benefit is tied to a skilled need, so the coverage ends while the need for help continues, and families rarely see that cliff coming.
• Medicare pays nothing toward 24-hour care, meal delivery, unrelated homemaker services, or personal care that is the only care needed.
• The homebound condition excludes exactly the person who is frail but still getting out, which many families read as a reward for decline.
• Custodial care priced by the hour becomes more expensive than a facility once the hours needed pass a certain point, and the crossover arrives quietly.
• Equipment carries 20 percent coinsurance even when the services are free.