What is the cost of in-home care?

Many aging adults would prefer to age in place and stay home longer rather than move to an assisted living facility or nursing home. Most people recognize, though, that living at home alone can be difficult as we age — our physical needs change along with our abilities. Completing chores, meeting health needs and preparing meals can all become challenges. This is where in-home care can help.

The cost of in-home care depends on several factors, including location. It also depends on the amount of time a caretaker spends with the individual and the types of services they provide. In-home care is a highly personalized industry, and it’s not always simple to know what to expect. It’s important to know these costs can vary greatly.

The average cost of in-home care nationally

In 2020, the median cost of in-home care services was about $24 per hour.

Most often, the cost of in-home care is charged by the hour and has a wide range of potential figures. In 2020, the median cost of in-home care services was about $24 per hour. Monthly, estimating about 44 hours of care per week per senior, people spent about $4,500 on in-home care, according to the Genworth Cost of Care Survey.

It’s important to consider the overall expectations here. For those who need medical care, such as wound changes or support for IVs, the costs rise substantially. You may be charged per day or per week rather than hourly, especially if the provider isn’t in the home for several hours at a time.

Many don’t need this level of care, but for those who do, a skilled nursing facility might be the best option. Still, for most in-home care situations, the needs (bathing assistance, companionship, etc.) greatly affect cost.

How in-home care costs have changed over time

As the cost of medical care increases, so do the costs of in-home care. A key factor is a lack of skilled workers. This has pushed the cost of in-home care higher, especially as a result of limited licensed nurses. In 2004, the median annual cost of home health aide services was $42,168; in 2020, the median was $54,912 for the same type of care.

Also key to the growing cost is demand. As baby boomers get older, the need for more skilled workers grows significantly. This need for more workers pushes the prices for available services much higher.

And the demand continues to rise. As people continue to live longer and want to stay in their homes as long as possible, it’s likely these costs will continue to grow unless a labor surge occurs. But this isn’t expected — demand will probably keep growing at a rate faster than available professionals.

By geography

Where you live plays a big role in the overall cost of in-home care. The cost depends on factors like the availability of professionals to provide the necessary care and of companies to manage the care. And, of course, cost of living greatly impacts both caretakers’ wages and the overall costs a person can expect to pay for care.

In areas like Louisiana, where the cost of living is much lower and there are more available professionals, the median cost is about $17 per hour for care. That’s just over $3,200 monthly, or about $38,900 per year.

In areas where the cost of living is much higher, costs for in-home care rise sharply. In Alaska, there’s a shortage of accessible care, which pushes the median hourly cost to $28 per hour (about $5,300 per week, or $64,000 per year). In New York, the median cost is $26 per hour, or about $59,000 a year.

Median cost per hour for a home health aide

Alternatives to in-home care

What if these costs are too high? What if providers can’t meet your needs or there aren’t enough caretakers available?

In these situations, it may be necessary to seek out alternative options. In all cases, it’s critical to consider the level of care needed and find a solution that fits your budget. Most often, Medicare and Medicaid programs don’t cover the cost of in-home care.

A couple of alternatives:

• Nursing homes: Nursing homes provide 24/7 care. They offer some of the highest levels of care available and typically cost a bit more than most other options. The median cost of a nursing home with a private room is $290 per day across the U.S. ($105,850 annually). Some parts of the U.S. have much more affordable care — others, like Alaska, are significantly more expensive. Semiprivate rooms (which often means sharing with another person) may cost less.
• Assisted living: In an assisted living community, a resident has a private or semiprivate room and can live pretty much as they’d like. Care is available when needed, but it often doesn’t include medical support. Usually, assisted living communities are ideal for those who can live on their own but may need some support with housekeeping and other daily tasks. The median cost of assisted living in the U.S. is $4,300 per month, or $51,600 per year.

Long-term care insurance costs

One way to pay for the cost of in-home care is with long-term care insurance. This type of life insurance is paid out over your lifetime. Then, if you need to use it to pay for nursing, assisted living or in-home care, you can do so when the time comes.

Many people benefit from this type of insurance because it can minimize the overall costs associated with long-term care needs. A growing number of the general population in the U.S. need this type of support, so it’s a good idea to look into it — most people who live beyond the age of 65 in the U.S. will need some level of long-term care support during their lifetime.

The cost of a long-term care insurance policy depends on many factors. Purchasing at a young age may help to minimize overall costs, for example, because there’s more time for the insurer to collect premiums on the policy.

According to AARP, long-term care insurance premiums average about $2,700 per year for an individual. If you’re insured with a spouse, though, you’re likely to get a discount. For a 55-year-old couple, the average cost of this type of insurance is about $2,100 annually. For a 65-year-old couple, the average for a combined premium is $3,700 per year.

Long-term care insurance lets you choose the amount of coverage you need early on. If you buy it at a younger age, it can be pretty affordable and provide peace of mind regarding the high and growing cost of in-home care later in life.