Who pays for home care? A study of nationally representative data on disabled older Americans

BACKGROUND We examine who pays for services that support disabled older Americans at home. We consider both personal sources (e.g., out-of-pocket payment, family members) and publicly funded programs (e.g., Medicaid) as sources of payment for services. We examine how the funding mix for home care services is related to older people's economic resources, needs for care, and other socio-demographic characteristics. METHODS Our sample consists of 11,725 person-years from the 1989, 1994, 1999, and 2004 waves of the National Long-Term Care Survey. Two-part regression analyses were performed to model hours of care received from each payer. "Random effects" and "fixed effects" estimation yielded similar results. RESULTS About six in ten caregivers (63%) providing home care services are paid by personal sources alone. By contrast, 28% receive payment from publicly funded programs alone, and 9% from a combination of personal and public program sources. Older people with family incomes over 75,000 dollars per year receive 8.5 more hours of home care overall than those in the lowest income category (less than 15,000 dollars). While the funding mix for home care services is strongly related to older people's economic resources, in all income groups at least 65% of services are provided by caregivers paid in whole or in part from personal sources. In fact, almost all (97%) home care received by those with family incomes over 75,000 dollars per year are financed by personal sources alone. CONCLUSIONS We outline the implications that heavy reliance on personally financed services and economic disparities in overall services use has for disabled older Americans and their families.