Private-Pay Personal Care: The Missing Link in Care-at-Home Growth
For home health, hospice, and behavioral health organizations, private-pay personal care may be one of the most overlooked growth, retention, and workforce development strategies in the market. For patients, it helps preserve independence at home. For referral sources, it closes practical gaps in care. For agencies, it creates a platform for growth, workforce development, and long-term value creation.
For many home health, hospice, and behavioral health organizations, private-pay personal care is still viewed as an ancillary service line. That may be the wrong frame.
Private-pay personal care is not simply a way to “sell hours.” When built correctly, it can become the front door to the household, the bridge between reimbursed episodes of care, and a practical workforce development engine for the broader care-at-home platform. It can do this will diversifying revenue streams, stabailizing margins, adding value to all stakholders (the patient, the family, the referral source, the caregiver, the investor, and the agency.
The market need is clear. AARP’s 2024 Home and Community Preferences Survey found that 75% of adults age 50 and older want to remain in their current homes as they age, and 73% want to remain in their communities (AARP, 2024). At the same time, Medicare does not generally pay for 24-hour care at home, meal delivery, homemaker services unrelated to the plan of care, or custodial/personal care when that is the only care needed (Centers for Medicare & Medicaid Services, n.d.).
That creates a very real gap between what families need every day and what traditional reimbursed clinical benefits cover.
The gap is not only clinical. It is functional.
Families need help with bathing, meals, mobility, transportation, medication reminders, dementia supervision, companionship, caregiver respite, and safety at home. A home health patient may no longer need skilled care but still need daily support. A hospice family may receive excellent interdisciplinary care but still need more hands-on help than the hospice benefit can practically provide. A behavioral health client may need support with routines, transportation, social isolation, medication prompts, caregiver relief, or basic stability at home.
This is where private-pay personal care fits.
CareScout’s 2025 Cost of Care Survey reported a national median rate of $35 per hour for non-medical caregiver services, with annualized costs calculated using 44 hours per week (CareScout, 2025). For families, that is expensive. But when compared with facility-based long-term care, it also helps explain why families continue searching for home-based alternatives.
For provider organizations, the strategic question becomes:
How do we become the trusted household partner before, between, and after reimbursed episodes of care?
The strongest personal care models do more than “add caregivers”
The best private-pay personal care models are not casual add-ons. They are disciplined operating models built around staffing, scheduling, family communication, caregiver retention, specialty programming, and clear clinical escalation pathways.
One successful model is the integrated care-at-home platform model. Addus HomeCare, a public company with personal care, hospice, and home health services, reported that personal care accounted for 76.6% of fourth-quarter 2025 revenue and described personal care as the key driver of growth. The company also reported 6.3% organic revenue growth in personal care during the quarter (Addus HomeCare, 2026).
The lesson is not that every organization should copy Addus. The lesson is that personal care can be more than a small service line. It can become the high-frequency relationship engine of a broader care-at-home platform.
A second model is the specialty personal care model. This includes dementia care, post-discharge support, live-in care, 24-hour care, serious-illness support, behavioral-health-informed caregiving, caregiver respite, and concierge care management.
Dementia is especially relevant. As the Alzheimer’s Association has reported, family and unpaid caregivers provide enormous amounts of care for people living with dementia, creating significant emotional, physical, and economic strain (Alzheimer’s Association, 2025). Personal care cannot replace clinical care, but it can provide structured support around supervision, safety, routine, respite, and family relief.
A third model is the bridge model. In this model, personal care supports patients and families before, between, and after reimbursed episodes. For home health, it can help stabilize patients after discharge from skilled care. For hospice, it can provide caregiver relief, overnight support, and safety monitoring. For behavioral health, it can extend support into the daily routines where risk, isolation, caregiver stress, and functional decline often show up first.
This model must be designed carefully. Private-pay personal care should never blur benefit boundaries, replace covered hospice services, or create confusion around what is included in a reimbursed plan of care. But when structured correctly, it can improve continuity, strengthen family trust, and help the organization remain connected to the household.
A fourth model is the facilitated access model. In this model, the caregiver helps make virtual care practical for patients and families. For many older adults, people with serious illness, individuals with dementia, behavioral health clients, or patients with mobility limitations, traveling to appointments can be exhausting, confusing, expensive, or misaligned with their goals of care. A trained caregiver can help set up the technology, support the patient during the visit, communicate practical observations to the family or care team when appropriate, and help ensure follow-through after the appointment.
This does not mean the caregiver replaces the clinician or provides clinical advice. It means the caregiver becomes a practical access partner, helping the patient connect with primary care, specialists, behavioral health clinicians, palliative care teams, hospice staff, care managers, or other virtual supports when an in-person visit may not be necessary or realistic.
For referral sources, this creates a valuable solution. Hospitals, physician practices, specialists, and care managers often know that a patient needs follow-up but also know that transportation, frailty, caregiver availability, confusion, or anxiety may prevent the visit from happening. A personal care agency that can reliably support telehealth access gives referral sources another option: not just “refer for help at home,” but “refer for help staying connected to care.”
The workforce case may be even stronger than the revenue case
The care-at-home sector is facing a structural labor challenge. The U.S. Bureau of Labor Statistics projects employment of home health and personal care aides to grow 17% from 2024 to 2034, with approximately 765,800 openings each year. Many of those openings are expected to result from workers transferring to other occupations or leaving the labor force (U.S. Bureau of Labor Statistics, 2025).
This is where private-pay personal care can become strategically valuable.
A well-designed personal care division can serve as an entry point for people who may not yet be licensed, experienced, or confident enough to enter home health or hospice as CNAs, HHAs, LPNs, or RNs. It allows an organization to recruit for compassion, reliability, judgment, communication, and coachability — then build skills over time.
For home health and hospice companies, the clinical ladder can look like this:
PSS / PCA / caregiver → senior caregiver → specialty caregiver → CNA / HHA → LPN → RN
But the ladder should not be purely clinical. Some excellent caregivers may not want to become nurses. They may be better suited for scheduling, intake, family communication, recruiting, training, quality review, care coordination, or branch leadership.
That creates an operational pathway:
PSS / PCA / caregiver → lead caregiver → scheduler → intake coordinator → care coordinator → field supervisor → branch or business manager
This matters because turnover is one of the largest hidden costs in home care. Activated Insights reported that caregiver turnover dropped to 75% in its 2025 Benchmarking Report, the lowest level reported in five years, but still a very high rate for any labor-intensive service business (Activated Insights, 2025).
The financial impact can be meaningful. If a 100-caregiver personal care division reduces turnover by 10 percentage points, that could avoid roughly 10 replacement events per year. If the fully loaded cost of replacement, onboarding, training, lost productivity, supervisory time, missed shifts, and family disruption is estimated at $2,500 to $5,000 per worker, the annual savings could reasonably range from $25,000 to $50,000 before accounting for improved referral confidence, caregiver continuity, and client retention.
The savings become even more strategic when the ladder feeds licensed clinical roles. Every internally developed CNA, HHA, LPN, or RN can reduce dependence on external recruiting, premium labor, sign-on bonuses, overtime, and agency staffing. In a constrained labor market, that is not a soft benefit. It is a margin, capacity, and continuity strategy.
The strategic value for home health, hospice, and behavioral health
For organizations with home health and hospice, private-pay personal care can create value in several ways.
It can create earlier household entry, because families often need non-skilled support before a skilled episode begins.
It can improve continuity after discharge, because patients often remain functionally vulnerable after home health ends.
It can support hospice families, especially when caregiver exhaustion, overnight needs, or safety concerns exceed the practical capacity of the hospice benefit.
It can strengthen referral relationships, because hospitals, physicians, facilities, and community partners need trusted solutions for families who do not neatly fit into reimbursed clinical categories.
It can diversify revenue and protect margin, especially as home health and hospice organizations continue to operate in a reimbursement environment shaped by policy pressure, wage inflation, staffing shortages, and payer scrutiny. MedPAC’s recent home health payment recommendations continue to show the level of federal attention on Medicare payment adequacy and rate-setting for home health agencies (Medicare Payment Advisory Commission, 2025).
For behavioral health organizations, the case is different but equally important. Personal care and in-home support can help address daily routines, caregiver strain, transportation, isolation, medication prompts, autism and IDD support needs, dementia-related behavioral challenges, and serious mental illness support. KFF reported that in 2025, people on Medicaid home- and community-based services waiting or interest lists accessed services after an average of 32 months, with even longer waits for certain populations, including people served by autism waivers (KFF, 2025).
Private pay is not an equity solution by itself. But the scale of unmet home- and community-based need reinforces the broader strategic point: families need practical support in the home, and the current system often does not provide enough of it.
The risk: launching it casually
Private-pay personal care can look simple from the outside. It is not.
The operating model is different from home health and hospice. It requires consumer-grade responsiveness, tight scheduling, caregiver recruitment, family communication, rapid issue resolution, clear pricing, and strong supervisory infrastructure.
A weak launch can create reputational damage quickly. Missed shifts, poor caregiver matching, unclear service expectations, inconsistent supervision, or benefit confusion can erode trust with families and referral partners.
The organizations that succeed will build personal care with the same seriousness they bring to clinical service lines. That means:
Clear market positioning.
Disciplined pricing.
Strong scheduling infrastructure.
Caregiver recruitment and retention strategy.
Specialty training programs.
Family communication standards.
Clinical escalation pathways.
Compliance boundaries.
Defined career ladders.
A clear integration strategy with home health, hospice, and behavioral health.
The bottom line
Private-pay personal care should not be viewed as a small ancillary program.
For the right organization, it can become a strategic platform.
It can help families remain safely at home. It can support caregivers. It can strengthen referral relationships. It can create revenue diversification. It can bridge gaps between clinical episodes. It can extend the organization’s relationship with the household. And perhaps most importantly, it can become an entry-level workforce pipeline for the future of home-based care.
The best organizations will not ask only:
Should we launch private-pay personal care?
They will ask:
Can we use private-pay personal care to become the trusted household partner before, between, and after reimbursed episodes of care — while building our own future workforce?
That is the real opportunity.
References
AARP. (2024). 2024 Home and Community Preferences Survey. AARP.
Activated Insights. (2025). 2025 Benchmarking Report for Home-Based Care. Activated Insights.
Addus HomeCare. (2026). Addus HomeCare announces fourth quarter and year-end 2025 results. Addus HomeCare Corporation.
Alzheimer’s Association. (2025). 2025 Alzheimer’s disease facts and figures. Alzheimer’s Association.
CareScout. (2025). Cost of Care Survey 2025. CareScout.
Centers for Medicare & Medicaid Services. (n.d.). Home health services coverage. Medicare.gov.
KFF. (2025). A look at waiting lists for Medicaid home- and community-based services from 2016 to 2025. KFF.
Medicare Payment Advisory Commission. (2025). Chapter 7: Home health care services. In March 2025 report to the Congress: Medicare payment policy. MedPAC.
U.S. Bureau of Labor Statistics. (2025). Home health and personal care aides. Occupational Outlook Handbook.