Home Care Cost Factors

These days, most seniors want to age in place—to remain in their own homes as long as possible so that they can remain connected to the people and places they love. Aging, however, presents a number of challenges for people who want to remain independent. That’s where home care comes in: having caregivers come into the home to provide assistance with everyday tasks can help you or your loved one remain independent for the long haul.

Still, if you’re considering getting the help of a home care agency—or even if you’ve already decided — you may be wondering how much that care is likely to cost. In this article we’ll go over some of the factors that go into the cost of home care, and help you prepare to talk about costs with the home care agency of your choice. In the end, you should make sure you get the care that matches your loved one’s needs—or your own, as the case may be—as closely as possible, but if you start the process with a budget in mind, and with some understanding of why agencies charge what they do, getting the right care will go much more smoothly.

What Goes Into the Cost of Home Care

There are four key factors that go into the price of home care.

• the type of care needed
• the client’s health
• the amount of care needed, and
• where you live

We’ll talk about each of these, but let’s talk about geography first, because it’s a significant factor in the cost of care and the one you’re likely to have least control over.

Where you live has a big influence over home care costs for the same reason that where you live affects the cost of everything. If you live in an area with a relatively high cost of living, you can expect to pay above the national average for home care. The reverse is also true: if you live in an area with a relatively low cost of living, you can generally expect to pay less. Local regulations play a role as well: several states impose limits on the cost of home care, which naturally makes it easier for seniors and their loved ones to budget for the care they need.

If you or someone you love is hoping to age in place, you probably don’t want to move to get a better rate, but it’s useful to get a sense of the median rates in various parts of the country so you know where your region falls in the national picture. One of the best resources for this is the Genworth Cost of Care calculator, which provides estimates for the cost of full-time home care (as well as some other types of care) for a wide variety of locations around the country, and is useful for getting a ballpark estimate of what home care could cost where you live.

We should note that as we surveyed home care agencies, we found the Genworth numbers, which are collected on an annual basis, to be a little low in real time. Still, the Genworth median rates were close enough for estimates, and also gave useful insight into how much care might cost in one location compared to others. Here are median hourly rates for home care from a selection of areas around the country (the number is based on Genworth’s “homemaker services” figure):

• National median: $21
• Philadelphia area, PA: $22
• Monterey/Salinas, CA: $30
• Greely/Fort Collins, CO: $25
• Bismarck, ND: $22
• Jonesboro/Northeast AR: $18

As you can see, regional hourly rates for home care tend to cluster around the national median, but in some places care can be significantly more—or less—expensive. So as you prepare to look into home care it’s important to get acquainted with local rates to get a sense of how much it’s likely to cost.

Fortunately, you may have more control over other factors in the cost of home care. Here’s a look at some of them.

Type of Care Needed

Those who work with the elderly and disabled tend to divide the types of services that might be needed into two main groups: activities of daily living and instrumental activities of daily living.

Health

The client’s underlying health will also factor into the hourly rate charged. Many agencies can provide caregivers specially trained to deal with chronic health conditions like congestive heart failure, arthritis, Parkinson’s disease, and other ailments. Many also train caregivers in the specific needs of those suffering from Alzheimer’s or other memory impairments. Because dealing with such issues tends to require more experience and special training, however, a client with such issues may have to pay a higher hourly rate for care.

Amount of care needed

Another factor in the cost of care is the amount of care a client is expected to need. While someone needing longer care visits can naturally expect to pay for every additional hour, your home care agency may consider other issues as well.

To begin with, many home care agencies require each visit by a caregiver to last a minimum number of hours in order to make sure that the time they spend will cover overhead and the caregiver’s transportation costs. Some other home care agencies may not require a minimum visit—but will instead increase their hourly rate if care is needed below a certain threshold of hours a week.

On the other hand, for those needing more hours of care—and especially for those requiring live-in or 24-hour care—many home care agencies will lower their hourly rate to reflect this fact. In addition, agencies may discount the amount they charge depending on where the money is coming from, and charge those paying out of pocket less than those whose care is paid for by insurance.

Other Cost Issues to Keep in Mind

Minimum visit length

As we mentioned above, many home care agencies require caregivers be in the house for a minimum length of time. Be sure to ask about this requirement: if you need less care, or would like more flexibility, it’s possible that the agency will waive it, though they may end up charging a higher hourly rate for fewer hours.

Preliminary assessment

Most home care agencies will provide a free initial assessment before they begin providing care—to assess the client’s needs, and to set expectations for the type of care they’ll provide. Be sure to ask whether you’ll be billed for this initial visit.

Deposit required?

Some home care agencies allow their clients to pay as they go, but many will require a deposit or an initial payment for a specified amount of care. Be sure to ask about these or any other necessary prepayments you have to make before starting care.

Are they an agency or a registry?

Some home care agencies actually operate as registries—that is, they make their money by connecting clients with home care providers, but don’t act as the employers of the caregivers they place. Clients who hire through a registry may have to pay the employer portion of their caregivers’ payroll taxes. If you’re hiring through a registry, be sure you’re clear on these details, and also find out what fee you’ll owe to the office for connecting you with a caregiver.

Getting Ready to Talk About Costs

Even before you begin to look into home care companies, you should spend some time getting ready to talk costs with the agencies you’ll deal with. The home care company will advise you on how much care they think you need, but you’ll be able to receive their advice with more confidence if you first make the effort to assess your own needs and assess how much care you can afford.

Make a Budget

Getting clarity first requires that you come up with an idea of how much you or your loved one can reasonably spend on care. No one wants money to be an object when it comes to preserving a senior’s independence, but it’s still always a good idea to make a budget by following these steps:

• List potential sources of income or benefits. How much money is coming in? Will other family members contribute? Can the person being cared for access benefits that will pay for home care? Are there savings that you or your loved one can draw on to contribute at least some money every month? Make sure you have the full picture: sometimes people are surprised at the resources they can count on, and a little money from several different sources may be all it takes to get the care you need.
• Get a handle on spending in general. The first rule of making a budget is to take a close look at what you’re currently spending money on. There are many ways to approach this, but the simplest is simply to pull out the most recent bank statements and credit card bills and just look at where the money goes.
• Look for ways to economize. As you look at your spending, look for things you might be able to do to spend less. Again, that’s Budget 101, but in this case freeing up money in the household can lead to getting more and better care for a loved one who needs it.

The number you come up with doesn’t have to be anything more than a ballpark, but once you’ve looked at your income, your expenses, and ways to cut costs, you’ll have an amount you’ll be comfortable spending on home care. Knowing this won’t just help you pay for care—it can give you more confidence in negotiations over a home care company’s rates and the amount of care they’ll provide.

Could home care save you money?

As you consider hiring a home care company, it can also be useful to look at the money already being spent on some of the things that home care can help with. Ask yourself:

Food

Are you or your loved one frequently having food delivered because they don’t want to cook, or lack the mobility to cook or shop for themselves? Many home care agencies offer meal preparation among their companion care services, and you might save money on food as a result.

Transportation

Is the senior having to call cabs or use ride-sharing services for transportation? If so, remember that home caregivers often provide transportation as well.

Time commitments

Keep in mind, too, that if family members are caring for the senior right now, bringing in a home care agency could free them up to do more lucrative things with their time. Caring for family is almost always a labor of love, but home care can give loved ones the chance to do more to support their shared household.
Note that it’s highly unlikely that you’ll save money overall by bringing in a caregiver. But understanding the ways home care might help you economize could allow you to feel more free to hire a home care agency.

Get clear on the type of care you’ll need. Because the cost of care often depends on the type of care, you’ll also want to have a clear picture of the type of care you or your loved one needs. This is best done by simply making an inventory of what they’re getting help with now, but if you’re having trouble getting started, here’s a list of services, broken up into the standard categories.

Companion and Homemaker care (instrumental activities of daily living)

• Companionship
• Medication reminders
• Light housekeeping (dusting, cleaning, vacuuming/sweeping, taking out trash, etc.)
• Laundry
• Meal planning and prep
• Errands, shopping, and transportation
• Household organization

Personal care (activities of daily living)

• Mobility assistance
• Grooming/hygiene
• Dressing
• Eating
• Toileting

You should also take stock of underlying conditions. It’s not guaranteed that you’ll pay more for care for someone suffering from Alzheimer’s, for example, but many home care agencies will raise their rates if the client’s condition is likely to require more complicated care or make providing care more of a challenge.

How many hours do you really need?

Again, the home care agency will provide some guidance on the amount of care they think would be best given your situation. At the same time it’s important to note that some estimates of the monthly cost of home care assume that you’ll have a full-time caregiver. You may need full time help, but it’s also possible that you’ll need considerably fewer hours. And this can make a big difference.

For example, by default the Genworth Cost of Care calculator says the median monthly cost of home care in the US is nearly $4000/month, well over their estimates for the cost of a month of assisted living. But this figure is based on hiring a caregiver for 44 hours a week—an amount of care that not every family is going to need. Based on the national median hourly rate for home care, here are other potential scenarios that would require far fewer hours:

• 9 Hours/week—$812/month: A healthy senior living alone who just wants companionship, or help with housework, or even occasional meal preparation, can probably get all the care they need with three three-hour visits a week, or less than $1000 a month.
• 15 hours/week—$1354-$1548/month: Even if the senior needs more care, a three-hour daily check-in that includes help with bathing or dressing can also prove economical in comparison with other forms of care.
• 30 hours/week—$3100/month: If the senior needs a full range of care, but has family a caregiver, six hours of services every weekday, covering most of the time the client is alone, is still more economical than many of the alternatives.

People in different situations need different amounts of care, and again, your home care agency will give you their guidance on how much is needed. But you’ll be less surprised by their estimate—and better able to come up with an economical plan of effective care—if you really take stock of how much time caring for you or your loved one takes now.

If you’re the one providing care, try to keep track for a week or so of the time needed to provide the services you’d like a caregiver to take care of. As you do this, pay special attention to the time spent providing transportation, or doing meal preparation, or just providing companionship—you may be surprised at how much time these activities require.

Care Goes Beyond Price

Finally, as you assess your care needs and compare them with how much you feel comfortable spending, remember that price isn’t everything. As you do your research, someone you trust may highly recommend a particular agency that quotes an hourly rate for care that’s higher than you would like. You may, on the other hand, start receiving care from an agency you can better afford—and then find them unreliable, or find yourself unhappy with the care they provide. In situations like these, the quality of the care is paramount, and it’s always going to be worth hiring for fewer hours or keeping some caregiver roles in the family to ensure the highest quality when the caregiver comes on the scene.