Families pay for home care through seven main funding sources, most of which families do not initially know about: 1) private pay from income, savings, or family contributions, 2) long-term care insurance benefits, 3) VA Aid and Attendance for qualifying veterans and surviving spouses, 4) IHSS through Medi-Cal for low-income California families, 5) life insurance conversion using a life settlement or accelerated benefit, 6) reverse mortgage proceeds for homeowners over 62, and 7) family pooled funding where multiple relatives contribute to shared costs. Most San Diego families combine two or three of these sources rather than relying on just one. Medicare does not cover ongoing non-medical home care. United Home Care helps families identify which funding options apply to their situation. Call (619) 373-3533 to discuss costs and funding for your loved one.
Option 1: Private Pay (Income, Savings, and Family Contributions)
Private pay covers the largest share of home care nationally and in San Diego. Most families use a mix of monthly retirement income, accumulated savings, and contributions from adult children.
The math is more manageable than families often assume. A senior receiving Social Security and a small pension may have $2,500 to $4,500 per month in regular income. If they own their home outright and have modest expenses, much of that income can go toward home care.
Common private-pay structures include: drawing on a retirement account at a sustainable rate, using a portion of monthly pension or Social Security income, liquidating non-essential investments, selling a second property, or having adult children contribute monthly toward care costs.
Tax considerations matter. Medical expenses including qualifying home care can be deductible if they exceed 7.5 percent of adjusted gross income, and home care for someone who cannot perform activities of daily living often qualifies. A tax professional can confirm what qualifies for the specific family situation.
Option 2: Long-Term Care Insurance
Long-term care insurance is the funding source most often forgotten. Many seniors purchased policies decades ago and either forgot about them or do not realize the policy covers home care, not just nursing homes.
Check old paperwork. Ask the senior, the spouse, and any insurance broker who served the family. Sometimes the policy is in a drawer no one has opened in 10 years.
Modern long-term care insurance policies typically pay a daily or monthly benefit once the insured cannot perform two or more activities of daily living (bathing, dressing, transferring, toileting, continence, eating) or has a cognitive impairment such as dementia. The benefit is paid directly to the family or to the care agency.
Activation requires medical documentation. The doctor must certify that the insured meets the policy's benefit triggers. There is usually an elimination period (30 to 100 days, sometimes longer) before benefits begin.
United Home Care has worked with many long-term care insurers and can help families navigate the claims process. The documentation requirements often confuse families. Professional help speeds activation.
Option 3: VA Aid and Attendance
Veterans and surviving spouses of veterans may qualify for VA Aid and Attendance, a benefit that pays for assistance with daily living activities. The benefit can fund home care directly.
For 2026, the maximum monthly benefit ranges from approximately $1,800 for a surviving spouse alone to over $3,200 for a veteran couple, with specific amounts adjusted annually by Congress and the VA. Benefits are tax-free.
Eligibility requires three main qualifications: military service (at least 90 days active duty, with at least one day during a wartime period), need for assistance with daily activities, and meeting income and asset thresholds. The thresholds include a look-back period for asset transfers, so planning ahead helps.
The application process is slow. Six to nine months from application to approval is typical. Families who anticipate needing care often start the application before care begins.
Several San Diego organizations help veterans and families file Aid and Attendance applications at no cost. The County of San Diego Office of Veterans Services and accredited Veterans Service Organizations can assist. Avoid for-profit advisers who charge fees for application assistance, which is illegal under federal law.
Option 4: IHSS Through Medi-Cal
In-Home Supportive Services (IHSS) is California's state program that pays for in-home care for low-income seniors and disabled residents. IHSS pays a hired caregiver (often a family member or a hired aide) at a county-set hourly rate.
IHSS requires Medi-Cal eligibility. For 2026, individual income limits and asset limits are set by California Department of Health Care Services, and the figures change annually. Families should check with the San Diego County Health and Human Services Agency for current numbers.
Approved hours are based on a needs assessment. A social worker visits the home, evaluates the recipient's ability to perform daily tasks, and assigns hours per task category. Typical assessments authorize 20 to 200+ hours per month, with the average around 90 to 120 hours.
IHSS hourly rates in San Diego County for 2026 fall in the upper teens per hour. The recipient hires the caregiver directly. The state pays the caregiver, with the recipient acting as employer of record.
IHSS does not cover the higher rates or the specialized training of private home care agencies. Many San Diego families combine IHSS for basic hours with private agency care for specialized needs (dementia care, post-surgery recovery, complex behavioral conditions) that IHSS-recruited caregivers may not handle well.
Option 5: Life Insurance Conversion
Life insurance policies can fund home care through several conversion mechanisms. This option is largely unknown to families and represents a significant untapped resource.
Life settlement: an outside company purchases the life insurance policy from the senior in exchange for a cash payout that exceeds the policy's cash surrender value but is less than the death benefit. The buyer becomes the new beneficiary and continues paying premiums. The senior receives a lump sum that can fund care for years.
Accelerated death benefit: many modern life insurance policies include a rider that allows the policyholder to access a portion of the death benefit early when diagnosed with a terminal illness or chronic illness requiring long-term care. Activation is faster than a life settlement and does not require selling the policy to a third party.
Cash value loan or surrender: whole life or universal life policies accumulate cash value over time. The policyholder can borrow against the cash value or surrender the policy for cash. Borrowing leaves the death benefit partially intact; surrender ends the policy.
These options trade death benefit for current cash. The right choice depends on family priorities. A family more concerned about funding excellent care now than maximizing inheritance later often finds these options attractive.
Consult a licensed life insurance professional and a tax adviser before activating any of these options. The tax treatment varies.
Option 6: Reverse Mortgage
Homeowners aged 62 or older can use a reverse mortgage to convert home equity into cash without selling the home or making monthly mortgage payments. The most common form is the federally insured Home Equity Conversion Mortgage (HECM).
How it works: a lender provides a loan against the home's equity, payable when the homeowner sells, moves out permanently, or passes away. The funds can come as a lump sum, monthly payments, a line of credit, or a combination.
For families using a reverse mortgage to fund home care, the line of credit option often works best. The credit line grows over time and can be drawn as care needs increase.
Costs include origination fees, mortgage insurance premiums, closing costs, and interest that accrues over the life of the loan. The senior must continue paying property taxes, homeowners insurance, and home maintenance to keep the loan in good standing.
Reverse mortgages reduce the inheritance available to heirs, which is the primary tradeoff. For seniors without heirs or with heirs who agree that funding excellent care matters more than maximizing inheritance, this can be a strong option. For seniors whose heirs expect to inherit the home, the conversation needs to happen up front.
HUD-approved counseling is required before a reverse mortgage closes. Use a counselor approved by HUD and verify the lender is reputable. Avoid lenders who pressure quick decisions.
Option 7: Family Pooled Funding
When the senior's resources cannot cover full care costs, family members often contribute jointly. This option requires honest conversations that many families find difficult.
A common structure: adult children divide monthly care costs based on what each can afford. The contributions may be equal or proportional to income. Some siblings contribute money while others contribute time and direct caregiving.
Family caregiver compensation: some families pay an adult child to provide care, particularly when that child has left work or reduced hours to help. This works best when documented in writing, with clear hours and compensation, and when the working caregiver is taking on tasks they would otherwise hire someone else for.
Trust and clarity matter. Money disagreements between siblings about parent care are one of the most common sources of family conflict. A written agreement, ideally drafted with an elder law attorney, prevents misunderstandings.
Pooled funding works best alongside other options. A family might contribute $1,500 collectively per month while the senior uses Social Security plus a small VA benefit to cover the rest of care costs.
How Should Families Combine These Options?
Most San Diego families do not use a single funding source. They combine two or three.
Common combinations include: private pay plus long-term care insurance once the elimination period passes; IHSS plus private pay for hours that exceed IHSS authorization; VA Aid and Attendance plus reverse mortgage for veterans who own their home; family pooled funding plus the senior's monthly income.
The right combination depends on the family's resources, the senior's eligibility for benefits, and how soon care is needed. United Home Care does free initial consultations that include a funding discussion. We do not provide legal or financial advice, but we can help families understand which options are typically applicable to situations like theirs and which professionals to contact.
Call (619) 373-3533 to discuss your situation. The first call is free and there is no obligation to use our services.
How Can United Home Care Help With Funding?
We have helped hundreds of San Diego families navigate the funding side of home care. Our experience includes working with long-term care insurance claims, VA Aid and Attendance documentation, and coordinated care that combines IHSS with private agency services.
We can also recommend trusted local resources for specialized advice: elder law attorneys for asset protection planning, VA-accredited claims agents for veterans' benefits, financial advisers who specialize in senior care funding, and HUD-approved counselors for reverse mortgage decisions.
United Home Care provides care across San Diego County. We are family-owned, locally operated, and committed to keeping the same caregiver with the same client long-term. Call (619) 373-3533 to discuss care for your loved one and the funding options that may apply.
Frequently Asked Questions
Q1. Does Medicare pay for home care?
Medicare does not pay for ongoing non-medical home care, which is what most families need for aging seniors. Medicare covers short-term skilled home health (nurse visits, physical therapy) after a qualifying hospital stay, but only for a limited time and only when skilled medical care is required. For the daily help with bathing, dressing, meals, supervision, and companionship that most seniors need, Medicare provides no coverage.
Q2. How does VA Aid and Attendance work for home care?
VA Aid and Attendance is a monthly cash benefit for veterans and surviving spouses who need help with daily activities. For 2026, benefits range from approximately $1,800 to over $3,200 per month depending on the family situation. The benefit is paid to the veteran or spouse, who then uses it to pay for care. Eligibility requires qualifying military service, demonstrated need for assistance, and meeting income and asset thresholds. The application takes six to nine months on average.
Q3. Can I use my life insurance to pay for home care?
Yes, several options exist. A life settlement sells the policy to an outside company for a cash payout. An accelerated death benefit rider lets you access part of the death benefit early when diagnosed with a chronic or terminal condition. A cash value loan or surrender uses the accumulated cash value in a whole or universal life policy. Each option has tax and inheritance implications, so consult a licensed insurance professional and tax adviser before activating.
Q4. What is IHSS and who qualifies?
In-Home Supportive Services (IHSS) is California's Medi-Cal program that pays for in-home care for low-income seniors and disabled residents. Qualifying requires Medi-Cal eligibility (income and asset limits set annually by California Department of Health Care Services), age 65+ or a qualifying disability, and a county social worker's assessment that documents need for help. Approved hours range from 20 to 200+ per month based on the assessment. Apply through the San Diego County Health and Human Services Agency.
Q5. Should I get a reverse mortgage to pay for home care?
A reverse mortgage can be a useful funding source for homeowners over 62 who want to stay in their home and need cash for care, particularly when other funding options are limited. The tradeoff is reduced inheritance for heirs and ongoing requirements to pay property taxes, insurance, and maintenance. Use a HUD-approved counselor before signing, and have a family conversation about inheritance expectations before proceeding.
Q6. How much does it cost to talk to United Home Care about funding?
Initial consultations are free. We will discuss your loved one's care needs, our services, costs, and the funding options that often apply to families in similar situations. We do not charge for the conversation and there is no obligation to use our services. Call (619) 373-3533 to schedule.