Table of Contents
Does Medicaid Pay for In-Home Care?
Yes, Medicaid will pay for in-home care, and does so in one form or another, in all 50 states. Traditionally, Medicaid has, and still continues to, pay for nursing home care for persons who demonstrate a functional and financial need. However, in-home care provides an alternative for seniors who require assistance to remain living at home, but prefer not to relocate to nursing home residences. In-home care via Medicaid not only helps elderly persons to maintain their independence and age at home, but is also a more cost-efficient option for the state than is paying for institutionalization.
Many states allow Medicaid recipients to direct their own in-home care. This model of receiving services is called consumer directed care, participant directed care, cash and counseling, and self-directed care, and often allows care recipients to hire relatives as paid caregivers. Some states even allow spouses to be hired, although this is not commonplace. However, it is common for adult children to be hired and paid to provide care for their aging parents. Learn more about getting paid to take care of a loved one.
“Home care” may include a variety of settings other than one’s own personal home. For instance, seniors may receive in-home care in the home of a friend or relative, an adult foster care home, or an assisted living residence. (To learn more about receiving personal care services and supports in assisted living, click here). Please note that the settings in which one can receive services depends on the state and the Medicaid program.
Which Medicaid Programs Pay for Home Care?
In-home care services may be available via one’s regular state Medicaid plan, but may also be offered through Home and Community Based Services (HCBS) Medicaid waivers or Section 1115 demonstration waivers.
Regular State Medicaid
With regular state Medicaid, also referred to as original Medicaid and classic Medicaid, the federal government requires that states make home health benefits available to those in need. Personal care assistance (help with bathing, dressing, eating and other non-medical care) in the home, which is not federally mandated, is also offered by many states’ regular Medicaid plans.
In addition to the original state plan, there are other state plan options in which states can implement. One such alternative, made possible by the Affordable Care Act, is the Community First Choice (CFC) option. CFC allows states to offer in-home personal attendant services to assist with one’s activities of daily living (ADLs) and instrumental activities of daily living (IADLs). Examples include help with grooming, mobility, toiletry, preparing meals, light housecleaning, etc. for persons who would otherwise require placement in nursing homes. At the time of this writing, nine states have implemented the CFC option. These states are Alaska, California, Connecticut, Maryland, Montana, New York, Oregon, Texas, and Washington.
The section 1915(i) HCBS state plan option allows persons to receive in-home care assistance, including skilled nursing services, respite care, and home modifications. With this option, persons are not required to demonstrate a need for a nursing home level of care. States can also choose to limit the services to certain populations who are at risk of institutionalization, such as persons with Alzheimer’s disease or frail, elderly adults.
For the abovementioned programs that are part of the states’ regular Medicaid program, there is no waitlist. This is because original Medicaid is an entitlement and all persons who meet the eligibility requirements will receive benefits.
HCBS Medicaid Waivers
Home and Community Based Services Medicaid waivers, also known as Section 1915(c) waivers, are another way in which Medicaid offers in-home services and supports to promote independent living of elderly persons. With this option, a nursing home level of care is generally required, and without assistance, there is a risk of institutionalization. HCBS Waivers generally provide more in-home benefits than do states’ regular Medicaid plans. Services available through HCBS Medicaid waivers may include adult day care, companionship care, assistance with daily living activities, durable medical equipment, and more.
Home and Community Based Services through Medicaid waivers are not entitlement programs. Therefore, meeting the eligibility requirements does not equate to automatic receipt of benefits. Rather, waitlists for services may exist.
Section 1115 Demonstration Waivers
States may also offer home and community based services via Section 1115 demonstration waivers. These pilot programs allow states greater flexibility in implementing and improving their Medicaid programs. Some states offer long-term services and supports (LTSS) via this type of waiver. While this option may eliminate waitlists for services, this is not always the case.
Eligibility Requirements for Medicaid Home Care
In order to be eligible for Medicaid, and hence, in-home care, there are eligibility requirements that must be met. In addition to being a resident in the state in which one applies, there are also financial and functional needs that must be met.
While both income and assets are considered for Medicaid eligibility purposes, the limits vary based on the state in which one resides and the program for which one is applying. In order to be eligible for the regular state Medicaid program, one must meet the criteria set forth for their specific eligibility group. For the purposes of this article, the eligibility group is “aged, blind and disabled”. Generally speaking, most states limit one’s monthly income to either 100% of the Federal Poverty Level (FPL) or 100% of Supplemental Security Income (SSI) / Federal Benefit Rate (FBR). As of 2021, a state that utilizes 100% of the FPL as the income limit allows a single applicant up to $1,073 / month. States that utilize 100% of SSI, limits an individual’s income to $794 / month (as of 2021). Assets are also considered and are generally limited to $2,000 for an individual.
HCBS Medicaid waivers and LTSS demonstration waivers generally allow higher income limits than do state Medicaid plans. Often, these waivers utilize the same eligibility requirements as does institutional (nursing home) Medicaid. As a general rule of thumb, in 2021, 300% of SSI is used as the income limit. This means that an individual cannot have more than $2,382 / month in income. There is also an asset limit, which in most cases, is $2,000.
Being over the income and / or asset limit(s) does not mean that one cannot qualify for Medicaid. Certain higher end assets are generally exempt, or stated differently, not counted towards Medicaid’s asset limit. Examples include one’s home, household furnishings, vehicle, and engagement and wedding rings. There are also planning strategies, such as Miller Trusts, Medicaid asset protection trusts, irrevocable funeral trusts and annuities, that can be implemented in order for one to meet the financial eligibility criteria. Professional Medicaid planners can be of great assistance in this situation. Find one here.
One word of caution: Do not give away assets, or sell them under market value, in an attempt to meet Medicaid’s asset limit. Medicaid has a look-back period in which past asset transfers are reviewed, and if one has violated this rule, there will be a Medicaid ineligibility period.
Functional / Level of Care Need
A functional need threshold, also referred to as medical need, must also be met in order for one to be eligible for in-home care. For the state Medicaid plan (regular Medicaid), persons often must demonstrate the need for assistance with activities of daily living and / or instrumental activities of daily living. This includes requiring help with mobility, transferring from a bed to a chair, toiletry, eating, bathing, doing laundry, and meal preparation. Exact functional need varies by the state and the program. However, as an example, eligibility requirements may require that an applicant need assistance with one ADL or IADL, assistance with a minimum of two ADLs, or assistance with three IADLs. To verify functional need, an assessment is completed. For in-home benefits via regular state Medicaid, persons do not necessarily need a level of care to that which is provided in nursing home residences.
On the other hand, for HCBS Medicaid waivers, a level of care consistent to that which is provided in a nursing home is generally required. An inability to complete activities of daily living / instrumental activities of daily living are often used as an indicator. Commonly, physician verification for the need of assistance is required. Learn more about nursing home level of care.
Which Home Care Providers Accept Medicaid?
It’s important to note that not all home care providers accept Medicaid. However, a list of participating providers is maintained by each state’s Medicaid agency. State contact information can be found here.
Remember, many Medicaid programs allow for consumer direction of personal care / attendant care services. This means that Medicaid recipients can hire the person of their choosing, including friends and relatives. To find out if your state has a program that allows for self-directed care, contact the Medicaid agency in your state.
What Services Will Medicaid Cover in the Home?
Medicaid will cover a variety of in-home care services and supports, in addition to case management, to promote aging in place. As mentioned previously, benefits may be available in one’s home, the home of a friend or relative, a foster care home, or even an assisted living residence, depending on the state and the program. The compiled list below includes a wide selection of services that may be available. Again, these benefits vary by state and program.
- Assistance with Activities of Daily Living (bathing, mobility, dressing/undressing, eating, and toiletry)
- Assistance with Instrumental Activities of Daily Living (shopping for essentials, laundry, light housecleaning, and meal preparation)
- Home Health Care
- Home Modifications (to improve accessibility and safety, such as grab bars, widening of doorways, non-slip flooring, and wheelchair ramps)
- Vehicle Modifications
- Durable Medicaid Equipment (wheelchairs and walkers)
- Adult Day Care / Adult Day Health Care
- Skilled Nursing Care
- Respite Care
- Transportation (medical & non-medical)
- Therapy Services (physical, speech, & occupational)
- Meal Delivery / Congregate Meals
- Personal Emergency Response Services (PERS) / Medical Alerts
In some instances, there may be a cost of share or co-payment for services, based on a sliding scale that considers one’s income.
How Much Does Medicaid Pay for Home Care?
The amount Medicaid will pay towards in-home care varies based on the state and the Medicaid program in which one is enrolled. Some programs may cover the cost of a personal care assistant several hours a day / several days a week, adult day care a few days per week, or respite care a couple of times per month.
Consumer directed caregivers are paid an hourly rate, which is approved by Medicaid for in-home care. This rate varies by state and program, and is generally a few dollars per hour lower than is the market rate.