Once you’ve concluded that your aging parent needs in-home care, one of the first questions you may have is, “How much does in-home care cost?” The need for a professional caregiver can often arise unexpectedly, and many seniors don’t have a plan in place for what happens when they are unable to care for themselves independently. That leaves the family caregiver/decision-maker with the task of figuring out the logistics – including the financial component.
Not surprisingly, budget is often a major factor in narrowing down the options for in-home care. Hiring a private caregiver can often seem more affordable up-front, but the time, effort, and long-term costs often make hiring an in-home care agency a more attractive choice in the end. And while the costs can vary widely when choosing an in-home care agency, there are typically eight factors that will affect what you will pay. This article will explain each in detail so you can get a better idea of what in-home care will cost you and your family.
1. Your geographic location
Much like the cost of living, in-home care pricing is dictated by where you live. Each state and even county or city can have laws that determine the minimum wage, licensing and insurance requirements, and other factors that influence rates. For example, in Sonoma County one city has a higher minimum wage than the others, so residents of Petaluma are charged a higher rate to cover those costs. Additionally, the price of commercial real estate and running a business in general in your area also impact how much the agency charges. In-home care costs in bigger cities or more regulated states like New York City or California is going to be higher than in smaller towns. However, if the area you live in is too far removed from a town or city, the costs may be higher depending on travel times and caregiver availability.
2. The services performed
In most cases, the services provided by the caregiver like housekeeping, bed care, meal prep, and medication reminders will be included in the hourly or daily rate. But if your parent needs transportation to and from doctors’ appointments, or the caregiver will be running errands, it’s likely that an extra fee will be associated with that time on the road.
3. The time of day and/or week
Your in-home care agency will likely charge more if you’ll need the caregiver to stay overnight. And further, the overnight rate will depend on whether the caregiver can sleep during that time or if they need to be awake. If your parent needs round-the-clock supervision and the caregiver needs to be awake, that will increase the rate you’re charged.
It’s not very common, but some agencies may charge differently for weekday care than for care provided on the weekends, as they may need to incentivize caregivers with higher pay to work on the weekends.
4. Amount of time
It’s probably obvious to state that the more hours of care you need, the more it will cost. But one thing to consider is the daily rate vs. an hourly rate. If you need several hours per day, it might make more sense to go with an agency that offers a daily or “live in” rate as opposed to paying by the hour. If you choose the live-in option, be sure to ask the rate difference for nights (including the awake vs. sleeping rate as referenced above).
Many agencies will require a minimum number of hours per week or per visit/day. So if you have specific time frames in mind for when you need care, those minimums may affect the total cost, or you may need to make adjustments to the schedule.
5. How many people receiving care
For the most part, in-home care agencies don’t offer “two-for-one” pricing, so if both of your parents need assistance the rate is going to be higher per hour or per day. However, since the caregiver will already be in the home assisting one person, the rates for two people are usually not much than for one.
6. Long-term care benefits
Perhaps the biggest cost-saver when it comes to in-home care is the availability of funds through long-term care insurance. Depending on your policy, it’s possible the costs will be completely covered. That said, there are limits to what the policy will pay, and if your parent is young and may need additional support (like home health or assisted living) down the road, you may want to carefully consider when to start utilizing the benefits.
Long-term care insurance can be a lifesaver. But one often overlooked and potentially time-consuming task associated with using it is the paperwork required. Some agencies offer assistance or even complete the majority of this administrative work on your behalf, which can save a lot of time and headaches.
One more thing to note: If your parent is still able to care for themselves at this point and you’re still in the planning or research phase for in-home care, you may still be able to purchase long-term care insurance that can help cover the costs when the time comes. According to AARP, the ideal age range to purchase long-term care insurance is 60-65, but it is still possible to do later in life. You might be paying higher premiums at an older age, but that might still make financial sense depending on your situation.
7. The extra fees
Smaller costs like cancellation or late fees are often overlooked when it comes to the price of in-home care, yet they can really add up. Be sure to ask each agency you’re considering about the potential fees that may be added on once care begins. Common ones include for penalties for canceling care last minute, changing days or times of care, and paying late. Ideally, the agency you choose will have some flexibility should your needs change – just be aware of the advanced notice they require to make changes.
8. Grants & bonuses
There may be ways to reduce the costs that you might not realize, like grants or referral bonuses. Some agencies work with local hospitals to provide funds to those patients who are at a greater risk for re-admission but have fewer financial resources. If your loved one was hospitalized and in-home care is a requirement for release, talk to the staff to see if any agencies in your area offer financial help.
Additionally, your in-home care agency might offer small discounts or reductions on your monthly invoice for things like referring a new client. If you’re happy with the care you receive once service begins, talk with your care manager to see if they have a referral program that rewards you for sharing your positive experience with others.
As it has probably become apparent, the costs of in-home care using an agency will be largely dependent on your individual situation. As you research and speak with each agency you are considering, explain specifically what you need so that they can give you an accurate estimate during the assessment process. And be sure to ask them about other costs that may not be included to start care, such as a deposit or any other up-front fees. Knowing what to expect and avoiding any surprises when it comes to the financial side of in-home care can help reduce your stress level and make the caregiving experience much more enjoyable.
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