If you are a family member and have made the decision to hire a primary caregiver for your loved one, the next step is figuring out what type of caregiver to look for. Is it better to use an in-home care agency or hire a private caregiver?

While these two options can provide a variety of personal care services to their clients, there are pros and cons to both.

To be able to make an informed choice, it is necessary for you to understand the differences between the two.

You can read below to learn more about the services offered by an in-home care agency vs. a private caregiver and decide which one is best for your loved one.

What Is an In-Home Care Agency?

An in-home care agency is a business that provides a range of personal care services for older adults. They may be Medicare-certified, and employ caregivers who are skilled, licensed, and bonded.

The caregivers who are employed by agencies have been screened and possibly trained by the agency they are working for.

What Is a Private Caregiver?

Private caregivers are hired and employed directly by the family or the care recipient. They do not need to report to an agency and should be treated as an employee by the individual who hires them unless they are a self-employed caregiver or independent contractors and work for multiple families.

They usually specialize in assisting with activities of daily living (ADLs), preparing meals, and companion care. Independent caregivers are rarely licensed to provide medical care but are able to perform tasks like monitoring vital signs.

Finding independent caregivers can be challenging, depending on the demographics and geographical area you are looking in.

What Costs More – Home Care Agency vs. Private Caregiver

Pricing is one of the major differences between hiring an agency caregiver and a private caregiver. The hourly rate of licensed caregivers hired through a home care agency costs is about $21 per hour.

Independent caregivers charge an average of $14 per hour. Of course, this cost will vary based on location and demand.

While private caregivers may charge less by the hour, there are also additional expenses. Since you are responsible for background checks and payroll, expect to have additional costs.

Differences Between Home Care Agencies and Independent Caregivers

Aside from the cost, there are several differences to consider before deciding on where to hire a caregiver from. Background checks, availability, and call-in backup are just a few of the differences between the two.

Home Care Agency Caregiver

Background checks and additional training.

When you hire from an agency, you are more likely to be assigned to a caregiver that is highly skilled, credible, and experienced. Agencies perform thorough background checks on their employees and maintain professional liability insurance. They also often provide ongoing professional training to improve skills, offer caregiver support, and help prevent caregiver burnout.

24/7 availability.

As agencies employ many caregivers, chances are high that a backup caregiver is available if a caregiver calls in sick or is on vacation. Other senior care professionals who work for the agency will also be within reach. In case of unprecedented situations or concerns, you can always communicate with the agency to report issues.

Other senior care services may be available.

Home care agencies may offer additional support, including home health care services. Other licensed senior care professionals from agencies may provide medical assistance such as medication management, wound care, injections, dementia care, and more.

Private Caregivers

Control over the hiring process.

You won’t have to rely on someone else to match a caregiver for your elderly loved one, giving you full control over the hiring process. This can be beneficial if you like a hands-on approach to choosing the ideal caregiver that would fit the personality and values of your loved one.

Affordable cost of care.

Hiring independent caregivers is 30% – 40% less expensive than working through a home care agency. However, because private caregivers are considered household employees, you will be liable for paying other expenses. This can include taxes, payroll expenses, and possibly insurance.

Flexible non-medical care services.

Private caregivers may or may not be licensed to perform medical care. However, private caregivers are not restricted by the rules of an agency. This means they are more likely to be flexible in the personal care services and non-medical care they can provide.

Home Care vs. Private Caregivers – Pros and Cons

Pros and cons of in-home care agencies vs private caregivers.

There are pros and cons to hiring a caregiver on your own or hiring through a home care agency. The following pros and cons are listed to help you think about the different aspects of the two.

Hiring a caregiver privately is more labor intensive, but gives you more flexibility. Working with a home care agency requires less heavy lifting on your part, but the higher hourly cost will add up quickly.

In-Home Care Agency Pros and Cons

In-Home Care Agency PROS

  • Background checks, licensing, and insurance will be handled by the agency.
  • Payroll and other tax liabilities will be filed by the agency.
  • A very simple process to get started including an in-person assessment resulting in a care plan that’s personalized for your loved one.
  • Medical care services may be provided by licensed caregivers or home health services.
  • Caregiver availability 24/7.

In-Home Care Agency CONS

  • Costs more than hiring independent caregivers per hour.
  • Caregivers may have limitations when it comes to tasks and services.
  • You’ll have very little control over who will be assigned to your loved one. You will not be guaranteed to see the same caregiver consistently.
  • Agencies generally have three-four hour shift minimums.

Private Caregiver Pros and Cons

Private Caregiver PROS

  • Generally less expensive per hour than home care agencies.
  • Family/loved ones can be more involved in the hiring process.
  • Communicate directly with the caregiver.
  • Caregivers may have more flexibility with their schedules.

Private Caregiver CONS

  • A more complicated hiring process as you will need to do all the legwork, background checks, etc…
  • Private caregivers are rarely licensed to provide medical care (ie nurse, physical therapy, etc.).
  • Payroll, taxes, and liability insurance will be your responsibility.
  • Finding a replacement for your caregiver might be difficult if they are ill or have their own family emergency.

Does Medicare Pay For In-home Care or Independent Caregivers?

Understanding Medicare coverage can also help you make a better decision when it comes to hiring a caregiver. Medicare can pay for in-home care if it is for physician-directed medical care services from a certified home care/home health agency.

If you need companion care services only, those will not be covered. Private caregiver services can be covered only for medical care services as well.

Tax Benefits: Hiring an In-home Care Agency vs. a Private Caregiver

There are some tax benefits to hiring a caregiver directly.

Since home care agencies are responsible for tax and payroll filings for their employees, you will not be eligible for household employee tax benefits.

The cost of in-home care can also be applied as a medical expense deduction.

If you decide to hire a caregiver yourself, you will be eligible for tax credits. You will also be responsible for worker’s compensation insurance, payroll taxes, managing payroll, and deducting social security and other taxes. You essentially take on an employer role in this scenario.

Liability Issues: Comparing an In-home Care Agency vs a Private Caregiver

Hiring a private caregiver comes with increased liabilities. As you will be responsible for payroll, taxes, and insurance, there is more burden on you as an employer.

You can also be liable for job-related injuries or events that happen in your home or private property. You and your homeowner’s insurance will be responsible for theft or accidental breakage of personal items in the home.

Home care agencies, however, typically take care of these liabilities. They will carry the proper insurance to protect their clients and employees from accidents and theft.

In Summary

Home care agencies and private caregivers are both credible in-home care providers. They both offer alternatives to nursing homes, assisted living facilities, and other senior housing.

The best in-home care option will depend on the specific needs of your elderly loved one. Make sure to spend time weighing out the pros and cons to determine whether in-home care or hiring independent caregivers is right for you.

  • Private caregivers will require a more hands-on approach from you and are considered household employees.
  • In-home care agencies will be able to provide a caregiver to fit your schedule, but it may not be a person(s) that is a good match with your loved one.
  • You will be able to work directly with a private caregiver regarding wages, scheduling, and duties.
  • Home care agencies will require hourly minimums, may cost more, and will be more restrictive about what duties a caregiver may perform.

In-Home Care Agencies vs Private Caregivers Frequently Asked Questions

What’s the difference between home care agencies and private caregivers?

Home care agencies are licensed businesses that can provide caregivers with medical and non-medical training. Private caregivers are independent people hired directly by the family or the care recipient. Private caregivers do not report to any agency or organization.

What is the cost of a private caregiver?

Private caregivers tend to be less expensive than agency caregivers. They usually charge anywhere from $10 – $17. The rate of a private caregiver will depend on the level of care, work hours, and the state/region you live in.

Are private caregivers regulated?

Private caregivers are not regulated. They work independently and do not report to a specific agency or regulatory board.

What is the benefit of working with an in-home care agency?

In-home care agencies offer more convenience to their clients. They take care of everything from the hiring process to providing care services. Because they perform background checks and further training, you are also more likely to be assigned to an experienced caregiver from an agency.

How do I become a private caregiver?

Caregiver requirements vary from state to state and also depend on the level of care you will be providing. Typically, training programs are necessary for companion care providers. More certifications are required for CNAs (certified nursing assistants), home health aides, and medical care service providers.

An expert in senior care, Amie has professional and personal experience in senior housing, caregiving, end-of-life care, and more from her 24 years of working with older adults.