The Costs & Benefits of Providing Veterans Homecare

U.S. Department of Veterans Affairs (VA) expenditures for the homemaker and home health aide program are expected to increase by a staggering 69.5% in three years, from $3.4 billion in 2024 to $5.7 billion in 2027, according to the advance appropriation. What is driving this $2.33 billion leap?

Several factors are driving the rapid increase. The veteran population is aging, the VA has a responsibility to meet the long-term care needs of veterans who qualify and there is a greater awareness and utilization of existing services. In fact, the VA projects that homecare service visits will increase from 19.9 million to 30.6 million between 2024 and 2027.

Senior care agencies consider it an honor and a privilege to serve those who put their lives on the line for our country and its freedoms. Organizations that succeed in providing VA care take great pride in caring for veterans and take that responsibility very seriously. Caregivers are often drawn to agencies that serve veterans because many of their family members are veterans, and it is their way of giving back.

In the coming years, far more veterans will need assistance with activities of daily living such as bathing, dressing, grooming, ambulation and transfers, as well as light housekeeping and meal preparation.

The number of veterans over the age of 85 enrolled in VA healthcare will increase by 66% between 2020 and 2035. Additionally, the VA projects that the number of veterans age 85 and older with a 70% or greater service-connected disability rating to increase from roughly 50,000 in 2019 to more than 330,000 by 2039, an increase of 555%. The 85-plus age group often has the greatest long-term care needs.

Cost Breakdown

The costs of caring for our aging veteran population continue to rise. The Veteran Millennium Health Care and Benefits Act of 1999 was transformative legislation that addressed the costs of both institutional and noninstitutional extended care needs for veterans. When signed into law, this legislation required the VA to pay for nursing home coverage for qualifying veterans and to develop noninstitutional long-term care alternatives through a collection of home- and community-based services, including the homemaker and home health aide program.

In the 2023 fiscal year, the VA spent $8.4 billion to provide skilled nursing and personal care for 36,000 veterans in institutional settings. VA community living centers, community nursing homes and state veterans’ homes are among the most expensive settings for these veterans to receive care. The VA system can save substantially by using homecare services to prevent or delay the need for institutional care.

The Power of Homecare

Non-medical homecare agencies can have an enormous impact on the lives of the veterans they serve and also reduce the cost of caring for our aging veteran population. Most seniors want to age in place in the comfort of their own homes, and veterans are no different. Many have lived in their homes for decades and do not want to be uprooted from their friends, families, relatives and familiar surroundings.

Receiving non-medical care at home allows veterans to maintain independence longer and can delay or even prevent the need to move to a nursing home or similar long-term care environment. Caregiver support can prevent falls, one area where homecare services can have an immediate impact on the veteran population. One fall can radically change a veteran’s level of independence. Additionally, veterans often build long-term relationships with their caregivers, which can help reduce social isolation.

Caregiving takes a heavy toll on family members, whether it is a spouse or an adult child of the veteran. Homecare agencies are a valuable resource for family caregivers who commonly face fatigue or exhaustion from their caregiving responsibilities. VA services can give family caregivers a much-needed break so they can take care of themselves.

Many adult children have to choose between caring for their parent and keeping their job. The VA homemaker and home health aide program helps family members overcome these challenges. As highlighted earlier, postponing or avoiding the need for institutional care can save the VA and taxpayers significant amounts of money, which is why they invest heavily in home- and community-based services. Care provided to veterans may help prevent a hospitalization or unnecessary rehospitalization by providing the crucial support that veterans need to maintain their independence and live safely in their homes.

The VA can also more effectively match a veteran’s needs with available resources by adjusting the authorized number of care hours.

What to Know Before Serving Veterans

The opportunity for a non-medical homecare agency to grow its business by serving veterans is enormous. But identifying the opportunity and successfully delivering the care are two very different things.

Before deciding to serve veterans, agencies must fully understand and be ready to manage the impact on daily operations. VA authorizations dictate how many hours per week your company can provide care for an approved veteran. The number of authorized hours is often far less than what companies typically see with private-pay homecare clients, which leads to shorter shifts that are much harder to staff.

Private-pay clients are largely from wealthier communities and can purchase services with their own funds, whereas veterans served through VA programs come from a wider socioeconomic spectrum. Additionally, the care you provide is subject to audits by the VA, third-party administrators like Optum and TriWest, and state surveyors if your business requires a state license. Providing care based on sound care delivery protocols and documenting it is critical to demonstrating compliance.

Homecare agencies that work with the VA need to be ready to absorb some unreimbursed operational expenses. Caregivers who accept shorter VA shifts often must work with two to three clients per day, which increases non-reimbursable time and mileage costs.

VA reimbursement practices do not provide additional funds to cover holiday and overtime rates for caregivers, which also increases agency costs. The cash flow cycle with VA reimbursement, while much quicker than in the past, is still typically longer compared to nearly instant payment for private-pay clients, which can create cash flow issues for your business.

Strong documentation, billing and accounts receivable processes can minimize the impact on cash flow.

The opportunity to serve veterans through VA home- and community-based care programs is significant, but it is not appropriate for every homecare agency. The growing need is clear. So are the operational challenges.

Agencies that understand both sides of that equation and can consistently deliver high-quality care can build an important part of their business while helping the VA address one of the most significant long-term care challenges it will face over the coming decades.