Efforts to move more care into the home got a boost last week when the Biden administration announced $37 billion in funding to support home- and community-based services through the American Rescue Plan Act.
The Centers for Medicare and Medicaid Services is encouraging states to use the money to create registries for consumers of direct care workers who can provide home-based care to Medicaid beneficiaries, as well as those who do not receive Medicaid benefits. By 2040, the number of people in the U.S. age 65 and over is expected to number 72 million. And as they age, many of these seniors will choose to remain in their homes rather than move into a senior living facility.
Related: CMS scraps home health Medicare pay cut, offers minor increase
Home- and community-based services include both home healthcare and home care. Home health and home care are different, but often work hand-in-hand for older adults aging in place and patients recovering at home following an illness.
Here is what you need to know about the services and their growth.
What is the difference between home health and home care?
Home health generally covers skilled nursing services such as wound care, physical therapy, speech therapy, occupational therapy and other skilled nursing services. Patients receive home health services from a nurse, a nurse's aide or a therapist for a limited number of weeks following a hospital stay. Physicians can prescribe home health services to patients without a hospital stay.
Home care—also referred to as personal care—covers activities of daily living such as meal preparation, bathing, dressing and toileting. Those services are typically provided by an unskilled home care aide.
Who pays for home health and home care services?
Medicare, Medicaid and private insurance cover home health services. Medicaid covers home care and Medicare may cover some of those services following a hospital stay or an illness. Older adults who are not covered by Medicaid and need long-term home support must pay out-of-pocket for home care services.
A growing number of Medicare Advantage plans help seniors receive home care services. In 2024, about half of the 5,786 private plans will offer supplemental benefits that include in-home support such as home-delivered meals and home care, according to healthcare consulting firm ATI Advisory. The benefits are typically limited in duration and are often unused because some beneficiaries don’t know their plans cover them, according to Tyler Cromer, practice director at ATI Advisory.
Do home health and home care complement each other?
Some patients entering post-acute care following an illness or injury need a combination of healthcare and personal care services to recover.
WellBe Senior Medical, which partners with health insurers to provide in-home medical care to older adults, often makes referrals to home care companies, according to CEO Dr. Jeff Kang. He said personal care assistants can be the “eyes and ears” of what is happening in the home and can alert providers to changes in a patient’s condition.
Who are the big players in home health and home care?
Health Insurers are becoming dominant players in the highly fragmented market. Last February, UnitedHealth Group closed on its $5.4 billion purchase of LHC Group, which offers both home health and home care services. It is expected to close on its $3.3 billion acquisition of home health provider Amedisys in 2024. Humana purchased Kindred at Home, the nation’s largest provider of in-home home care services, for $8.1 billion in 2021. Last year it rebranded Kindred under the CenterWell brand and spun off the personal care unit, while still maintaining the home health business.
Large players in the home care space include Addus HomeCare, Pennant Group and AccentCare.
