How family caregivers can find out if they are eligible for financial assistance

Are you a family caregiver? There’s a 20% chance your answer is yes, you are eligible for financial assistance. However, it’s not an easy process.

“Family caregivers are the backbone of the long-term care system in the U.S.,” according to AARP’s 2023 Valuing the Invaluable report. If you are among the one in five Americans who is a caregiver to a family member, this likely resonates with you, whether you’re caregiving by choice or because your loved one can’t afford the cost of long-term professional services. The AARP report estimates that, in 2021, about 38 million family caregivers—spouses, adult children, other relatives and chosen family—provided 36 billion hours of care to an adult loved one with limitations in daily activities, including dementia. 

As the U.S. population continues to age and folks are living longer, more and more family members will be entering the ranks of those unpaid caregivers. In 2020, those aged 65 and over accounted for 16.8% of the population, a number that is projected to keep rising until at least 2030. Indeed, by 2030, it’s projected that there will be almost as many folks over the age of 65 as there will be under 18. By 2046, there will be over 603,000 people over the age of 100 in the country.

Meanwhile, there’s a significant shortage of professional caregivers in all 50 states with no end in sight. Despite efforts to retain and attract workers, the industry has an average turnover rate of 40% - 60% each year. That means more caregiving falls on the shoulders of family members.

If you’re a family caregiver for a loved one, you may be eligible for caregiver reimbursement. At a minimum, your loved one, the care recipient, will need to be enrolled in your state’s Medicaid program, and the state will need to grant a Home and Community Based Services (HCBS) waiver. We’ll walk you through the details below.

What does family caregiving look like?

Family caregivers provide, on average, over 22 hours of care a week. Nearly 20% provide 41 or more hours of care a week. More than half of family caregivers have no paid help in taking care of their loved one. Nearly all (83%) care recipients remain in their own home or reside with the family caregiver.

For 43% of care recipients, “old age,” mobility issues, or dementia is the main condition requiring care. The number of loved ones requiring care for memory problems is rising, up from 29% in 2015 to 35% in 2020. Also rising is the number of care recipients who have more than one condition for which they need care: 45% have two or more conditions, up from 38% in 2015.

Whether or not they have to reduce their working hours or quit their jobs as a result of their caregiving, more than 75% of family caregivers regularly incur out-of-pocket caregiving costs. The average annual cost for those expenses is over $7,200. 

The financial burden of family caregivers (and those needing care)

Most family caregivers continue to work full- or part-time, and most of those work full-time, with over half of all employed family caregivers in hourly wage positions. In addition to their paying job, these family members also work the equivalent of a part-time job as caregivers, usually because they cannot find affordable and/or quality paid help. 

Unsurprisingly, family caregivers are at risk for substantial financial struggles as a result of their caretaking. Caregivers are often forced to disrupt their careers or quit their jobs entirely in order to care for their loved one(s): losing income, reducing their career opportunities and savings, and lowering their Social Security and retirement benefits. (Ironically, this makes it more likely they will need the help of their own family caregivers as they age.) A 2019 survey found that nearly 20% of working family caregivers had to leave a job at some point in order to care for a family member. In 2013, the lost income of family caregivers of older adults was estimated at $67 billion. Over 30% of family caregivers have reported two or more negative financial consequences of caregiving, including leaving their own bills unpaid, having to take on more debt, taking an additional job, and putting off (or giving up) retiring.

Even among older adults who qualify for or can afford some direct hired help, many continue to need some measure of caregiving from a family member, to manage the paid caregiving and other healthcare, as well as provide care not covered by insurance or that they are unable to afford. 

Getting reimbursed as a caregiver is not easy

Medicaid is usually the best (and only) way to get reimbursed as a family caregiver. Medicare, the federal health insurance program for Americans 65 and up, covers many medical care costs but generally only pays for home care or nursing home care when it’s for a recovery, after surgery or short-term rehabilitation after an injury. Medicaid covers long-term care, but, as a patient, you have to be close to broke to qualify for it. Individual applicants in most states must spend down their qualifying assets to no more than $2,000. 

The health care system is, unfortunately, not particularly good at serving older Americans. According to the New York Times, “more than four of five middle-class people over 65 who need long-term care for five years or more will eventually enroll [in Medicaid]” and “almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.” In other words, even folks who have saved significantly for their retirement can find themselves unable to afford the care they need. “Middle-class people must exhaust their assets to qualify, forcing them to sell much of their property and empty their bank accounts,” as the New York Times noted. Even spouses can retain only a “modest amount of income and assets, often leaving their children and grandchildren to shoulder some of the financial burden.” 

Nonetheless, once a loved one qualifies for Medicaid, if they need round-the-clock care, it can be extremely hard to find. Although federal law requires each state’s Medicaid program to offer nursing home care, qualifying for a space in a nursing home covered by the program can be daunting. According to the Times, “Homes may be sold or couples may contemplate divorce to become eligible.”

It’s not hard to see why most people requiring long-term care turn to family members, and why family members feel a duty of care that can result in financial hardship. However, once a loved one is enrolled in Medicaid, family caregivers can be reimbursed through Medicaid’s “self-directed services” for long-term care. (Here’s information on how to apply for Medicaid. Requirements vary by state.)

How much caregiver reimbursement are you eligible for?

How much compensation a caregiver can earn depends on the state and on the particular program the care recipient and caregiver choose. Hourly rates are likely in line with the low end of the industry standard for institutional care. For example, some states report $11 hourly wages while others report $15. Programs may also have monthly caps on the number of hours or total amount. Given the variance across states and programs, calling your state’s Medicaid office is a good place to start in determining the range of possible reimbursement. Be sure to explain that you’re interested in the information relating to reimbursement through self-directed services for long-term care after obtaining an HCBS waiver, which we discuss next.

HCBS Waivers

These programs—every state has a different name for it—allow states to grant waivers allowing qualified individuals to manage their own long-term home-care services, rather than having them managed by a home care agency, with the caveat that the self-directed home or community plan will not be more expensive than an institutional one. These waivers are called Home and Community Based Services (HCBS). And while every state has self-directed Medicaid services, some states do not allow the hiring of a family member to provide care. Some programs exclude spouses, while others will only pay caregivers who do not reside in the same home as the loved one needing care. 

If your state allows for hiring the family caregivers who are providing care, enrolling in self-directed Medicaid services involves the following:

Assessment: The person needing care must be assessed to determine how much and what kind of care is necessary, based on their capacities, needs, preferences, risks, and strength.

Planning: The care recipient and any chosen representative (e.g. a family caregiver) write up a service plan detailing the daily living assistance required. These can include personal care (bathing, dressing, etc.), help with household tasks and mobility, managing medications, transportation and more. The plan should include coverage options for times when the primary care provider is off or unavailable, and instructions for substitute caregivers.

Budgeting: A budget for supplies and services is created, according to the needs determined by the assessment.

Selection: Once the care plan is set, the care recipient (or qualified surrogate, if necessary) chooses a caregiver.

If you plan to apply for reimbursement as a family caregiver, experts recommend making the arrangement formal by drawing up an agreement, recording all the work you do as a caregiver, and reporting the exchange of money to the IRS. If possible, contact an elder care lawyer to make sure the agreement follows the applicable laws, and a mediator or therapist to assist with any issues that may crop up during the caregiving.

The need for caregiving and for financial help for caregivers is such that there are now wait lists for most state’s waivers. Nationally, the average wait time for a waiver is 45 months. So, don’t delay applying for one.

Other financial assistance

In addition to Medicaid’s self-directed services for long-term care, several states have implemented caregiver tax credits, deductions, or other reimbursement programs. 

If you’ve provided over 50% of financial support to your loved one during the tax year, you can claim them as a dependent. That will open up the possibility of federal tax credits and deductions. If you pay for your loved one’s medical costs, including care, prescriptions, and medical transportation, you can deduct those that exceed 7.5% of your adjusted gross income. 

The National Council on Aging has a Benefits Checkup tool that can help you find programs that assist with costs of health care, medicine, food, utilities, and more.

Caregivers for veterans

There are many federal and state programs available to support caregivers of veterans, including some that fall under Medicaid’s self-directed services for long-term care programs. For more information, start at the Veteran Directed Care page on the Veterans Affairs site.

Caregiver Reimbursement in California and Florida

To get a sense of the specifics of Medicaid’s self-directed services long-term care options, we looked at the information available for four states: California, Arizona, Florida, and New York. The programs vary among the states, as does the ease of navigating the relevant government and healthcare websites.

Caregiver Reimbursement in California

Family caregivers in California who are interested in reimbursement can start at the California Caregiver Resource Centers site. There are several avenues through which caregivers can get financial help. The California Paid Family Leave Act can help cover some missed salary if you couldn’t work because you were caregiving. In addition to a current job, you’ll also need to be paying into the California Disability Insurance program through your paychecks. (You can check your paystub.) Apply for this reimbursement through the state’s Employment Development Department (EDD).

There are several long-term care reimbursement programs, In-Home Supportive Services (IHSS), California’s Medicaid HCBS waiver for self-directed long-term care services, and California’s PACE program.

Reimbursement rates through IHSS vary by county. To qualify, the care recipient must:

• live at home or an abode of your own choosing (not a long-term care or licensed community care facility)
• submit a completed Health Care Certification form
• and have a county social worker assess your eligibility and need for IHSS. 

Once approved for IHSS, the care recipient then hires someone to perform the services the assessment determined are necessary. Your loved one can hire you or find a contractor through the county. If your county has homemaker employees, you may receive services from a county homemaker. To apply for IHSS, submit the application to your county IHSS Office.

Those in need of long-term care can instead apply for an HCBS waiver through Medicaid’s California program (known as Medi-Cal). You can check the waitlist, which is updated monthly, to see how many spaces there are in your area’s program, and how many folks are already waiting for a spot. The state’s Department of Health Care Services site says it is “currently taking steps necessary to request an increase in waiver capacity as soon as possible.” To request an application, email ProFacWAIVER@dhcs.ca.gov.  

The state’s PACE program does not provide financial support for caregivers, but it does pick up many of the caregiving tasks that family providing 24/7 care are otherwise doing alone. PACE is designed to be an alternative to a nursing home or assisted living, coordinating and providing long-term care services. The program coordinates doctor’s appointments and various care services, provides transportation to and from medical appointments, and offers adult day care (also known as respite care). In a 2018 survey, nearly half family caregivers reported high caregiver burden when their loved one enrolled in PACE. After enrollment more than 58% of those who rated their caregiver burden as moderate to high were experiencing less burden.

​​To qualify for participating in PACE program, an individual must:

• be 55 years of age or older;
• live in a PACE service area;
• be able to live safely in the community at the time of enrollment, and;
• be certified by the state to need a nursing home level of care.

For more information on PACE programs, you can visit the National PACE Association’s site.

Caregiver Reimbursement in Florida

Florida has several programs that can help reimburse family caregivers. Managed Medical Assistance (MMA) and Long-Term Care Services (LTC). Managed Medical Assistance provides covered medical services including doctor visits, hospital care, prescription drugs, and transportation to services. Most people on Medicaid will receive their care from a plan that covers MMA services. 

Long-term Care Services can help pay for a nursing facility, assisted living, or at-home care. To obtain an HCBS waiver that will provide caregiver reimbursement for long-term care services, the care recipient must be approved for services by two separate state agencies. The Department of Elder Affairs (DOEA) determines medical eligibility for Medicaid using the Comprehensive Assessment and Review for Long-Term Care Services (CARES) Program. The Department of Children and Families (DCF) determines financial eligibility for Medicaid, unless the care recipient is receiving Supplemental Security Income (SSI), in which case, the Social Security Administration determines eligibility. 

Florida, like California, does not have enough spaces in the HCBS waiver program for all the applicants. The DOEA works with the Aging and Disability Resource Centers (ADRCs) to manage the Statewide Medicaid Managed Care (SMMC) Long-Term Care (LTC) wait list. You can fill out an application for a Florida HCBS waiver.

Another program available to Floridians 60 and over is the Home Care for the Elderly (HCE) Program, run by the state’s Elder Affairs department. This program provides a basic $160 subsidy per month to help the care recipient stay at home. An additional subsidy may be available for services and/or supplies for the care recipient. To qualify for the subsidies, the care recipient must 

• have income less than the Institutional Care Program (ICP) standard
• meet the ICP asset limitation
• be at risk of nursing home placement
• receive Supplemental Security Income (SSI)
• receive benefits as a Qualified Medicare Beneficiary or as a Special Low-Income Medicare Beneficiary
• and have an approved adult caregiver living with them who is willing and able to provide care or help arrange for care.
  

Like California, Florida also has a Program of All-Inclusive Care for the Elderly (PACE), administered by the state’s Elder Affairs department. Benefits are designed to help keep folks in their community, when possible and offer support, including respite care, though not financial reimbursement, to family caregivers. Those enrolled in PACE have their medical and long-term care needs managed through a single provider. To be eligible for PACE services, individual must

• Be 55 years of age or older
• Live within the defined service area of the PACE Center
• Meet medical eligibility requirements as determined by CARES
• Be able to live safely in the community
• Be dually eligible for Medicaid and Medicare, or Medicaid only. There is also a private pay option with PACE, however this is not regulated by the State.

Trouble at work because of caregiving duties? Legal help may be available

Although federal law does not yet offer protection for workplace discrimination against caregivers, some states and local jurisdictions recognize Family Responsibilities Discrimination (FRD). If you work a paying job in addition to caregiving, and your employer has discriminated against you as a result of your caregiving, you may have some recourse. The result of caregiver bias, FRD happens when employers make personnel decisions that are the result of their awareness of the employee’s caregiving responsibilities and that harm the employee. At least 84 areas (cities, counties, states) have passed laws prohibiting workplace discrimination against caregivers. Read more about FRD and available protections.

Other ways to get more cash, more quickly

Unfortunately, as you can see it is neither simple, nor fast, to get Medicaid reimbursement for caregiving for a family member. Even being reimbursed may not be enough to cover the cost of health care, medical supplies, and housing your loved one needs. That’s where services like Wellahead can assist—by helping you determine if there are other ways you can use either existing assets like your home or other benefits like Veterans benefits to pay for care. Our services are always free to you. We vet and review providers to make sure you’re getting options from non-predatory lenders. Reach out today if you have concerns about how to afford ongoing care needs.