Care for an Elderly Parent at Home: How Silicon Valley Families Pay for It

For most older Silicon Valley homeowners, the biggest threat to aging in place isn’t the house. It’s the cost of care once help is needed every day. Families are often surprised to learn that Medicare pays for very little of it, and that the bills can reach five figures a month. The good news is that many of my clients have substantial home equity and other resources, and there are ways to use them. This article walks through the real costs and the main ways families pay, and it’s part of my guide to aging in place vs. moving in Silicon Valley. I’m not a financial advisor or elder law attorney, and both should be part of these decisions. If you’re trying to work out how to pay for care for an elderly parent at home, here’s how the money usually comes together in our area.

What Care Actually Costs

CareScout’s 2025 Cost of Care Survey put the national median for a non-medical caregiver at $35 an hour, and Bay Area agencies generally run above that, which is why I use $40 an hour for the math below. You can look up figures for your own area with CareScout’s cost of care tool, and your actual numbers will depend on the agency, how many hours you need, and whether your parent needs help overnight.

Live-in care can cost less than 12-hour shifts because agencies bill it as a flat daily rate and the caregiver gets a sleep break at night. Once a parent needs someone awake overnight, for wandering or frequent trips to the bathroom, that model stops working and the cost jumps to full shift care.

For comparison, CareScout puts the national median for assisted living at $6,200 a month, and Bay Area communities commonly run about $6,500 to $9,000 a month, with memory care more. That’s why the cost of staying home rises sharply as care needs grow. I compare the two paths in my guide to aging in place vs. moving in Silicon Valley.

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The Parent's Home Transition Plan

Moving Mom or Dad into assisted living or memory care usually happens faster than anyone planned, and the house ends up being the biggest decision on the table. This checklist walks Silicon Valley families through every step in order, from the first conversation and the legal paperwork to paying for care, the cleanout, the sale of the house and the taxes, so nothing important gets missed while you're focused on your parent.

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What Medicare Does and Doesn’t Cover

Medicare covers skilled home health care, such as nursing or therapy after a hospital stay, on a part-time or intermittent basis when certain conditions are met. It generally doesn’t cover custodial care, which is help with daily activities like bathing, dressing, eating, and supervision, and that’s most of what older adults need to stay home. Families who assume Medicare will pay are often caught off guard.

Ways Families Pay

For the home equity options, see the quick guide to reverse mortgages and ways to unlock home equity without a reverse mortgage.

How Long Will the Money Last? A Worked Example

Here’s a hypothetical that looks a lot like the families I work with. Mom is 84 and owns her Willow Glen home free and clear, and it’s worth about $2.4 million. She has $400,000 in savings and about $3,500 a month coming in from Social Security and a small pension. Her care needs grow the way they often do, starting with a few hours a day and ending with someone in the house around the clock.

Her savings cover the first two years with about $221,000 left, and that runs out eight or nine months into year three. That’s also before her regular living expenses, property taxes, and the income tax owed on IRA withdrawals, so in real life the savings go faster. At that point the house is the only big asset left, and the family has to decide whether to borrow against it, rent out part of it, or sell. Each of those has real tax consequences, which I cover below, and it’s why I’d much rather have this conversation in year one than in month thirty.

Medi-Cal and IHSS After the 2026 Asset Limit

Starting January 1, 2026, California brought back an asset limit for Medi-Cal: $130,000 for one person, plus $65,000 for each additional household member, according to Justice in Aging’s FAQ on the change. The home your parent lives in is generally exempt, but a second home or rental property counts. For long-term care Medi-Cal, the state can also look back up to 30 months at gifts and transfers, so moving money to the kids right before applying can backfire.

If your parent qualifies, In-Home Supportive Services (IHSS) pays for help with things like bathing, dressing, meals, and housework, and the provider can often be a family member. In Santa Clara County, the Board of Supervisors approved a contract that raises IHSS provider pay by $2 an hour to $22.44 by July 2027, as Local News Matters reported. The number of hours IHSS authorizes comes from a county assessment, and it rarely covers everything a parent with heavy needs requires, so most families still fill the gaps privately.

Families also ask whether Medi-Cal will take the house. California limits estate recovery to assets that pass through probate, which is one more reason a properly funded living trust matters. These rules are technical and they just changed, so this is a conversation to have with an elder law attorney before anyone applies or moves assets.

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Veterans Benefits: Aid and Attendance

Wartime veterans and surviving spouses who need help with daily activities may qualify for the VA pension with Aid and Attendance. As of December 1, 2025, the maximum annual rate for a veteran with no dependents who qualifies for Aid and Attendance is $29,093, about $2,424 a month, and $34,488 a year for a veteran with a dependent spouse, per the VA’s published rates. The actual payment is reduced by countable income, but unreimbursed care costs can be subtracted from that income, so a parent already paying for in-home care may qualify for more than the family expects. There’s also a net worth limit and the application takes time, so start early and work with a VA-accredited representative rather than anyone charging a fee to help your parent qualify.

Paying a Family Member to Provide Care

In a lot of families, one adult child, usually the one who lives closest, ends up doing most of the caregiving, and resentment builds when the siblings who live farther away don’t see what it costs. Paying that child fairly can keep the peace and protect the parent’s Medi-Cal options, but it has to be done right. The cleanest route is a written personal care agreement, signed before the care is provided, that sets a reasonable hourly rate and spells out the duties. Payments made under a written agreement at a fair rate are treated very differently from informal gifts when Medi-Cal looks back at transfers, and the child does have to report the pay as income.

If the parent qualifies for IHSS, the program can pay the family caregiver directly. And an adult child who is still working can take up to eight weeks of California Paid Family Leave to care for a seriously ill parent, with the state replacing roughly 70 to 90 percent of wages up to a weekly cap, according to the EDD.

Agency or Private Hire?

Home care agencies handle screening, payroll, insurance, and backup caregivers, and they charge more per hour for it. Hiring a caregiver directly can cost less, but it usually makes the family a household employer, responsible for payroll taxes, wage and hour rules, and workers’ compensation insurance. For many families the agency premium is worth the peace of mind, especially when adult children live far away. If you go the private route, the EDD’s household employer guide walks through the registration and payroll tax side.

The Tax Side of Using the House

This is where Silicon Valley families get tripped up, because so many of our parents bought decades ago and are sitting on enormous gains. If Dad bought in Los Gatos in 1978 for $95,000 and the house is now worth $2.5 million, selling during his lifetime could trigger capital gains far beyond the $250,000 exclusion for a single owner, or $500,000 for a married couple. If the house is held until he passes, his heirs generally get a stepped-up basis to the value at death, and most of that gain disappears for tax purposes. In California, when a married couple holds the home as community property, the surviving spouse can get a step-up on the whole house at the first death, not just half. That’s why borrowing against the house with a HELOC or reverse mortgage to pay for care can sometimes make more sense than selling, even after the interest cost.

Selling isn’t always the wrong move, though. Normally an owner has to have lived in the home for two of the last five years to claim the exclusion, but IRS Publication 523 has a special rule for owners who become physically or mentally unable to care for themselves. If your parent lived in the home for at least one of the five years before the sale, time spent in a licensed care facility counts as living in the home, which gives families more time to sell after a move than most people realize.

The care itself can be deductible too. Under IRS Publication 502, qualified long-term care services for a chronically ill person, provided under a plan of care from a licensed health care practitioner, count as medical expenses, and medical expenses above 7.5 percent of adjusted gross income can be itemized. In some cases an adult child who pays for a parent’s care can deduct it as well. And if one of the kids hopes to keep the house, Prop 19 only lets them keep Mom’s low property tax base if they move in as their primary residence within a year, with the benefit capped at the assessed value plus $1,044,586 for transfers through February 15, 2027, per the Board of Equalization. Run all of this past a CPA before anyone decides.

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When the Math Turns

At some point, many families find that care at home costs more than a good assisted living or memory care community, and that the parent would also benefit from the social life there. That’s often when selling the house makes sense, and the proceeds fund the next stage. If that’s where you are, see paying for assisted living while the house sells and my guide to aging in place vs. moving in Silicon Valley.

Local Help in Santa Clara and Santa Cruz Counties

Before you hire anyone, call your local Area Agency on Aging. In Santa Clara County that’s Sourcewise, and in Santa Cruz County it’s the Seniors Council of Santa Cruz and San Benito Counties. Both can point you to caregiver resources, benefits counseling, and Medicare help at no cost. If your parent is 55 or older and needs a nursing-home level of care but wants to stay home, look at On Lok PACE, which serves parts of Santa Clara County and coordinates medical care, day center services, and in-home help in one program. PACE is often free for people on Medi-Cal, and others can pay privately.

Your First 30 Days

When care needs show up suddenly, usually after a fall or a hospital stay, families tend to scramble. Here’s the order I’d suggest working through things.

1. Find the trust, will, durable power of attorney, and health care directive, and confirm who has authority to act.
2. Pull any long-term care insurance policy and call the carrier to open a claim, since most policies have an elimination period before benefits start.
3. Get a care assessment from your parent’s doctor or a geriatric care manager so you know how many hours of help are actually needed.
4. Add up monthly income, savings, and home equity so you know how long the money lasts at that level of care.
5. Check eligibility for VA benefits, IHSS, and PACE before spending down savings.
6. Talk with an elder law attorney and a CPA before selling the house, gifting money, or applying for Medi-Cal.
7. Hold an honest family meeting about who does what, including whether a sibling will be paid for caregiving.

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