How to Pay for Home Care: 7 Options for Indiana Families - Evelyn Wells

Key Takeaways

1. Families can pay for home care through several options, including private pay, long-term care insurance, Medicaid programs, Veterans benefits, and other financial resources.

2. Indiana families may qualify for programs such as Medicaid Home- and Community-Based Services or other local assistance programs depending on eligibility.

3. Long-term care insurance policies vary, so families should review coverage details before assuming home care is included.

4. Many families combine multiple resources, including insurance, benefits, savings, and family support, to create a sustainable care plan.

5. Understanding your loved one's care needs is the first step toward choosing the right payment option.

Introduction

When you’re considering non-medical home care for yourself or a loved one, one of the first questions that often arises is: How will we pay for this? Whether you’re a first-time care seeker or navigating the complex world of caregiving for the first time, understanding how to pay for home care can feel overwhelming. You want the best care, but you also want to ensure it’s affordable. Thankfully, there are various payment options available, each with its own set of benefits. The key is knowing which options to explore first and understanding what each one actually covers.

This guide walks through eight ways Indiana families can pay for or offset the cost of non-medical home care, along with questions to ask before choosing a payment option.

1. Private Pay and Personal Savings

For many families, the first answer to how to pay for home care is private pay. Private pay simply means using your own financial resources to pay for care rather than relying on an insurance policy or government program.

That may sound straightforward, but private pay can look different from one family to another. Some families use personal savings or retirement income, while others combine several sources of income and financial support to cover the cost of in-home care.

What can private pay include?

Depending on your family’s circumstances, paying for home care privately may involve:

Personal savings or checking accounts
Retirement income
Social Security benefits
Investment or other personal income
Proceeds from the sale of an asset
Financial contributions from family members

Private pay can also give families more flexibility when choosing the type and schedule of care they need. For example, a loved one may not need a full-time caregiver. A family might begin with a few hours of non-medical home care each week for companionship, help with daily routines, meal preparation, light housekeeping, or mobility support, then adjust the schedule as their loved one’s needs change.

Does private pay mean paying for everything yourself?

Not necessarily.

Families sometimes combine private funds with other resources. For example, one family member may contribute financially while another helps with transportation or appointments. Someone may also have long-term care insurance or qualify for a government or Veterans benefit that can help offset some of the cost of care.

That’s why, when you’re figuring out how to afford home care, it can help to look at the full picture rather than assuming your family has only one way to pay.

Still trying to understand what home care may cost before deciding how to fund it?

Click the link to learn more about our guide to home care cost estimates to help you get a better sense of the factors that can affect the price of care.

When might private pay make sense?

Private pay may be worth considering when:

Your loved one needs care that isn’t covered by an insurance or government program.
You want to choose a specific home care provider.
You need to start care while you’re waiting to determine whether you qualify for another program.
Your loved one needs a smaller number of care hours each week.
Your family wants flexibility to adjust the amount of care as needs change.

Before committing to a payment plan, ask the home care provider for a clear explanation of the services, hours, and expected costs. Having that information makes it easier to compare your available payment options and decide what is sustainable for your family.

An older adult carefully reviews his insurance policy to better understand his available care benefits.

2. Long-Term Care Insurance

If your loved one already has long-term care insurance, checking that policy should be one of the first steps when you’re figuring out how to pay for home care.

Long-term care insurance is designed to help cover the cost of extended care when someone needs assistance because of illness, disability, or other qualifying conditions. Depending on the policy, benefits may cover care provided at home, including personal care and other long-term care services. The National Association of Insurance Commissioners (NAIC) notes that long-term care policies may cover services such as home care, respite care, adult day care, assisted living, and nursing home care.

However, having long-term care insurance does not necessarily mean every home care service will be covered. Your loved one’s specific policy determines what qualifies for benefits, how much the policy will pay, and what requirements must be met before benefits begin.

What should you check in a long-term care insurance policy?

Before assuming your policy will cover the cost of a home caregiver, look for information about:

Covered services: Does the policy include home care, personal care, homemaker services, or other services your loved one needs?
Benefit amount: How much will the policy pay per day, week, or month?
Benefit period: How long will the benefits last?
Eligibility requirements: What conditions must be met before the policy begins paying?
Elimination or waiting period: Does your loved one have to pay for care for a certain period before benefits begin?
Provider requirements: Does the caregiver or home care agency need to meet specific licensing or certification requirements
Reimbursement rules: Will the insurance company pay the provider directly, or will your family need to pay first and submit claims for reimbursement?

The NAIC recommends reviewing the policy carefully and comparing the covered services, benefit limits, exclusions, and premiums.

What if you don't understand the policy?

You don’t have to figure it out alone.

Start by calling the insurance company or the agent who manages the policy and ask specifically:

“Does this policy cover non-medical home care, and what requirements must be met before benefits can be used?”

Have the policy number and a copy of the policy available if possible. You can also ask the insurer what documentation is required to begin a claim.

If you’re looking for general guidance on understanding long-term care insurance, the National Association of Insurance Commissioners’ Long-Term Care Insurance guide provides consumer information about coverage, benefits, and questions to consider.

Indiana families may also want to check for Partnership policies

Indiana has a Long-Term Care Insurance Partnership program that connects qualifying private long-term care insurance policies with Medicaid asset-protection provisions. The Indiana Long Term Care Insurance Program provides information about the state’s Partnership program and its requirements.

This doesn’t mean that every long-term care policy is a Partnership policy, so check the specific policy before assuming these protections apply.

A helpful step before arranging care

If you’re preparing to use long-term care insurance to pay for home care, it’s worth asking the insurer about coverage before services begin whenever possible.

Knowing the policy’s benefit amount, waiting period, covered services, and claim requirements can help you understand how much your family may need to pay out of pocket.

And if you’re comparing home care providers, ask each provider what information they can provide to help with your insurance claim. Having a clear understanding of the policy and the expected cost of care can make the process much easier for everyone involved.

A mother and daughter review their options for arranging and paying for home care together.

3. Medicaid and Indiana Home and Community-Based Services

If your loved one has limited income and significant care needs, Medicaid may be one of the most important options to explore when figuring out how to pay for home care in Indiana.

Indiana Medicaid offers home- and community-based services (HCBS) for eligible individuals who need a level of care that might otherwise require a nursing facility but want to remain at home or in another community setting. Depending on eligibility and the individual’s care plan, covered services may include personal assistance, adult day services, respite care, transportation, home modifications, meals, and other supports.

Indiana PathWays for Aging

For Indiana residents age 60 and older, Indiana PathWays for Aging is the state’s Medicaid program that coordinates health care and long-term services and supports for eligible members.

PathWays is designed to help qualifying older adults receive the services and support they need to live as independently as possible. People enrolled in the program may receive home- and community-based services based on their individual needs and eligibility.

You can learn more about the program through the official Indiana PathWays for Aging website, including information for members and caregivers.

Important: Indiana’s Medicaid programs have specific financial and care-related eligibility requirements. Simply needing help at home does not automatically mean someone qualifies for Medicaid-funded home care.

What does Indiana Medicaid home care cover?

The exact services available depend on the individual’s eligibility and authorized service plan. Indiana’s current HCBS information includes services such as:

Attendant care
Personal care and home-based assistance
Respite care
Adult day services
Home-delivered meals
Care management
Transportation
Home modifications
Participant-directed home care services
Structured family caregiving

The specific services a person receives are determined based on their needs and authorized through their care or service plan.

This distinction is important when you’re researching how to pay for non-medical home care. A Medicaid program may cover certain authorized services, but that does not mean every home care service, every number of hours, or every provider will automatically be covered.

Who may qualify?

Eligibility depends on several factors, including age, Medicaid eligibility, income and assets, and the person’s level of care needs.

For the PathWays waiver, Indiana requires individuals to meet both Medicaid eligibility requirements and the applicable home- and community-based services requirements, including a determination that they meet a nursing-facility level of care.

Because eligibility rules and program requirements can change, it’s better to check the current Indiana requirements rather than relying on an older article or assuming that a loved one’s income alone determines eligibility.

Where do you start?

If you think your loved one may qualify, don’t wait until the need for care becomes urgent.

Indiana directs individuals seeking HCBS waiver services to their local Area Agency on Aging (AAA), and applicants must also apply for Medicaid.

You can also review Indiana’s current Medicaid eligibility information to understand the requirements and application process.

If you’re already enrolled in Indiana PathWays for Aging and have questions about your benefits or services, the state’s PathWays resources provide current contact information and guidance for members and caregivers.

One thing families should know about Medicaid-funded home care

Medicaid-funded care and private-pay home care are not necessarily the same thing.

If your loved one qualifies for Medicaid HCBS, the program will determine which services are authorized based on their assessed needs and eligibility. Providers participating in Indiana’s HCBS programs also have specific certification and enrollment requirements.

That’s why it’s important to ask both the Medicaid program and the home care provider what services are covered, what requirements apply, and whether the provider participates in the applicable program.

For families trying to understand how to pay for home care in Indiana, Medicaid can be an important resource, but it should be viewed as one part of the bigger picture rather than an automatic way to cover all home care costs.

4. Indiana Assistance Programs & Area Agencies on Aging

Older woman doing a crossword with her son while a home caregiver handles dishes in the kitchen.

If you’re looking into how to pay for home care in Indiana, don’t overlook the local programs designed to help older adults remain safely at home.

Indiana’s Area Agencies on Aging (AAAs) can be an especially useful starting point. These agencies connect older adults, people with disabilities, and family caregivers with home- and community-based services, benefits, and other local resources. Indiana’s INconnect Alliance uses Area Agencies on Aging as a local entry point for many long-term services and supports.

What can an Area Agency on Aging help with?

An Area Agency on Aging can help your family understand what resources may be available based on your loved one’s circumstances. Depending on the program and eligibility, services may include:

In-home support
Personal care assistance
Respite for family caregivers
Home-delivered meals
Transportation
Home modifications
Care management and options counseling
Connections to Medicaid and other benefits

The goal isn’t simply to help families find a caregiver. AAAs can help families understand the different types of support available in their community and determine where to start.

Indiana's CHOICE Program

One program worth asking about is Indiana’s Community and Home Options to Institutional Care for the Elderly and Disabled (CHOICE) Program.

CHOICE provides home- and community-based services intended to help eligible older adults and people with disabilities remain independent in their homes rather than moving into institutional care. Eligibility is based on factors including age or disability and whether the individual is at risk of losing independence.

Services can vary based on an individual’s needs and available resources. In Central Indiana, for example, CICOA describes its CHOICE program as one of the options available to people who need assistance with activities of daily living and other supports at home.

This can make CHOICE an important program to ask about when you’re researching how to afford home care; particularly if your loved one needs ongoing assistance but wants to remain at home.

What about Indianapolis and Central Indiana?

If your loved one lives in Marion County or another county in the Central Indiana service area, the local Area Agency on Aging is CICOA Aging & In-Home Solutions.

CICOA serves Marion, Boone, Hamilton, Hancock, Shelby, Johnson, Morgan, and Hendricks counties. Its Aging & Disability Resource Center helps older adults, people with disabilities, and caregivers connect with local services and long-term care options.

CICOA Aging & In-Home Solutions

If you’re in the Indianapolis area and aren’t sure where to begin, CICOA’s Aging & Disability Resource Center can be reached at 317-803-6131 or 800-432-2422.

How do you find your local Area Agency on Aging?

If you’re outside Indianapolis, you can use Indiana’s official Area Agency on Aging directory to find the agency serving your county.

Find an Area Agency on Aging in Indiana

You can also use Indiana’s agency locator to identify the appropriate Area Agency on Aging and other community resources.

5. Veterans Benefits

If your loved one is a Veteran or surviving spouse of a Veteran, Veterans benefits may be another option to explore when determining how to pay for home care.

The U.S. Department of Veterans Affairs (VA) offers several programs and benefits that may help eligible Veterans and their families access support services. One of the most commonly discussed benefits for older Veterans who need assistance with daily activities is the Aid and Attendance benefit.

Aid and Attendance may provide additional monthly payments to qualifying Veterans and survivors who need help with everyday activities such as bathing, dressing, eating, or managing personal care needs. Eligibility depends on factors including military service history, financial requirements, and care needs. Learn more about eligibility through the official VA Aid and Attendance benefits page.

What should families check before relying on Veterans benefits?

Before assuming VA benefits will cover the cost of home care, families should confirm:

Whether the Veteran or surviving spouse meets eligibility requirements
What type of care the benefit can help support
Whether the benefit is paid directly to the Veteran/family or through another program
What documentation is needed to apply

The VA also provides information about additional geriatrics and extended care services that may be available to eligible Veterans.

A helpful next step

If your loved one is a Veteran, it is worth checking available benefits before deciding that your family must cover the entire cost of care privately.

Many families combine different resources when creating a care plan, such as Veterans benefits, insurance, personal savings, and professional home care support.

Understanding your options early can make it easier to create a plan that supports your loved one’s safety, independence, and quality of life at home.

6. Sharing the Cost of Care as a Family

When families are figuring out how to pay for home care, they often look beyond insurance and government programs and consider how they can work together to support their loved one.

Family contributions can take many forms. One person may help cover part of the cost of care, while another helps with transportation, appointments, meals, or household tasks.

For some families, combining financial support with professional in-home care services creates a more sustainable plan than asking one person to handle everything alone.

Caregiving does not have to fall on one person

Many family caregivers want to do everything they can for a parent or loved one. However, caregiving responsibilities can become physically, emotionally, and financially demanding over time.

Professional home care can help families fill the gaps by providing support with everyday needs such as:

Types of Home Care Services

Learn more from our article about the different types of home care services available and how they can support your loved one’s independence.

How families can plan care costs together

If multiple family members are involved, it can help to have an honest conversation about:

What type of care is needed right now
How many hours of help are realistic
What each family member can contribute
How responsibilities will be shared
How the plan may need to change as needs increase

For many families, the goal is not to replace family involvement, it is to create a support system where everyone can contribute in a way that is manageable.

Unsure how much care your loved one may need?

Our guide on how to choose home care for a loved one can help you think through the services, schedule, and level of support that may be the right fit.

A balanced approach to paying for care

When exploring how to afford home care, families often combine several resources instead of relying on just one.

For example, a family may use personal savings, insurance benefits, Veterans benefits, or assistance programs while also sharing responsibilities among relatives.

The most important step is creating a care plan that supports your loved one’s needs while also being realistic and sustainable for the people providing support.

7. Life Insurance Benefits

When families are exploring how to pay for home care, they may not realize that some life insurance policies include options that can provide financial support while the policyholder is still living.

Depending on the policy, certain life insurance benefits may allow someone to access a portion of their policy’s value to help pay for care-related expenses. These options may include accelerated death benefits, living benefits, or other policy features designed to provide financial support during certain health circumstances.

How can life insurance help pay for care?

Some life insurance policies may include:

Accelerated death benefits: Allows eligible policyholders to access part of their death benefit early if certain conditions are met, such as a qualifying illness or long-term care need.
Long-term care riders: Some policies include additional features that may provide benefits for qualifying long-term care expenses.
Life settlements: In some situations, a policyholder may sell an existing life insurance policy for its current value. This option has financial and tax considerations that should be carefully reviewed.

What should families check before using life insurance for home care?

Life insurance policies vary widely, so it is important to review the specific policy before making decisions.

Ask the insurance company:

Does this policy have living benefits or an accelerated death benefit?
What conditions must be met to access the benefit?
How much of the benefit can be used?
Will using the benefit reduce the amount paid to beneficiaries?
Are there tax or financial considerations to discuss?

Using life insurance benefits may help some families manage the cost of non-medical home care, but it is not the right choice for everyone.

Before making changes to a policy, consider speaking with the insurance provider or a qualified financial professional who can explain how accessing these benefits may affect the policy and your family’s long-term financial goals.

When creating a plan for how to pay for home care, life insurance is usually one piece of a larger picture that may also include personal savings, insurance benefits, family support, and available assistance programs.

8. Tax Considerations for Home Care Expenses

Also, you may also want to understand whether any care-related expenses could receive favorable tax treatment.

Depending on your loved one’s situation, certain qualified medical or long-term care expenses may be eligible for tax deductions. However, tax rules can be complex, and not every home care expense automatically qualifies. The IRS provides guidelines on which medical expenses and qualified long-term care expenses may be included when calculating medical expense deductions. (IRS Publication 502)

What should families consider?

Tax treatment can depend on factors such as:

The type of care being provided
Whether the services qualify as medical or qualified long-term care expenses
Whether the person receiving care meets IRS requirements
Whether expenses were reimbursed by insurance or another source
Whether the taxpayer itemizes deductions

For example, the IRS notes that certain qualified long-term care services and some long-term care insurance premiums may qualify as medical expenses when specific requirements are met. (IRS Publication 502)

Keep records of care expenses

If your family is paying for non-medical home care, it is important to keep organized records, including:

Care invoices and receipts
Insurance reimbursements
Payment records
Documentation related to the services provided

Because every family’s financial situation is different, consider speaking with a qualified tax professional before making decisions based on potential tax benefits.

Tax considerations can be one piece of your overall plan for affording home care, but they should be viewed alongside other options such as insurance benefits, assistance programs, and private funding.

How to Figure Out Which Payment Option Is Right for Your Family

When you’re trying to figure out payment, it can feel like there are too many options and not enough clear answers.

The right approach is usually to start with what your loved one already has available, including insurance coverage, benefits, and financial resources, before deciding how much care your family may need to pay for privately.

Use these questions as a starting point:

Does your loved one have long-term care insurance?

Start by reviewing the policy.

Find out whether it covers non-medical home care, what services qualify, how much it pays, and what requirements must be met before benefits begin.

Is your loved one a Veteran or surviving spouse?

Explore available Veterans benefits before assuming your family must cover all care costs out of pocket.

Programs such as Aid and Attendance may provide financial assistance for eligible Veterans and survivors who need help with daily activities.

Could your loved one qualify for Indiana Medicaid programs?

If your loved one has significant care needs and limited financial resources, explore Indiana Medicaid and home- and community-based service options.

Eligibility can be complex, so working with Indiana resources or an Area Agency on Aging can help you understand where to begin.

Are there local programs that may help?

State and community programs may provide support, referrals, or services that help older adults remain safely at home.

If you’re unsure what your loved one may qualify for, an Area Agency on Aging can help you understand available resources and next steps.

Does your family need care before other funding is available?

Sometimes families need support while they are waiting for applications, approvals, or benefit decisions.

In those situations, families may explore private pay options temporarily and adjust their care plan as other resources become available.

Does your loved one need help understanding what type of care is needed?

Before deciding how to pay for care, it helps to understand exactly what support your loved one needs.

For example, some seniors may only need companionship, help with meals, or transportation, while others may need more frequent assistance with personal care and daily routines.

Understanding the difference between types of home care services can help your family create a realistic care plan and estimate the amount of support needed.

The goal is not always finding one source of funding that covers everything. Many families create a care plan by combining available benefits, personal resources, family support, and professional home care services.

Questions to Ask Before Choosing a Home Care Payment Option

Once you understand the different ways to pay for home care, the next step is making sure the payment option actually fits your loved one’s needs.

Before choosing a funding source or starting services, ask these questions:

What type of care does this payment option cover?

Not every payment source covers the same services.

Ask whether the funding option applies to the specific support your loved one needs, such as:

Personal care assistance
Companionship
Meal preparation
Transportation
Respite care
Help with daily activities

Understanding the type of care being covered can help prevent unexpected costs later.

Does the provider need to meet specific requirements?

Some insurance plans and assistance programs have rules about which providers can participate.

Before starting care, ask:

Does the provider need to be approved or enrolled?
Is the caregiver or agency required to meet certain qualifications?
Does the payment source have a preferred process for billing or reimbursement?

Will my family need to pay upfront?

Payment arrangements can vary. Some programs pay providers directly, while others may require families to pay first and submit documentation for reimbursement. Knowing how payments work ahead of time can help your family plan for expenses.

Are there limits on hours, services, or benefits?

Many payment options have limits.

Ask about:

The number of approved care hours
Monthly or daily benefit limits
Waiting periods
Coverage expiration dates
Out-of-pocket costs

This can help you understand whether the payment option will meet your loved one’s current needs and whether adjustments may be needed later.

What happens if my loved one's care needs increase?

Care needs often change over time.

A payment option that works today may need to be adjusted as your loved one requires additional support.
When creating a care plan, consider:

How needs may change in the future
Whether additional hours can be added
What resources are available if more support is needed

Choosing how to pay for home care is an important decision, but it does not have to be made all at once. Understanding your options, asking the right questions, and creating a realistic care plan can help your family move forward with confidence.

Finding a Home Care Payment Plan That Works for Your Family

Figuring out how to pay for home care can feel overwhelming, especially when you are making decisions for someone you love.

The reality is that most families do not rely on just one solution. A sustainable care plan may combine personal savings, long-term care insurance, Veterans benefits, Indiana assistance programs, family support, or other available resources.

The best place to start is by understanding your loved one’s needs, reviewing the resources already available, and asking the right questions before choosing a payment option.

Whether your family is exploring care for the first time or adjusting to changing needs, taking the time to understand your options can make the process feel more manageable.

At Evelyn Wells, we understand that choosing home care is about more than finding help with daily tasks. It is about finding compassionate support that helps your loved one remain safe, comfortable, and independent at home.

Schedule a free consultation

Click the link to explore what care may look like for your loved one, come with questions to a free consultation with our team.

Our team provides personalized non-medical home care services designed around each client’s unique needs, including companionship, personal care assistance, respite support, and help with everyday routines.

Non Medical Disclaimer

The information provided in this article is for educational purposes only and is not intended as a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Never disregard professional medical advice or delay in seeking it because of something you have read in this article.