How Much Does It Cost to Start a Home Health Care Business?
- Nate Jones, CPCU, ARM, CLCS, AU
- Dec 4, 2025
- 3 min read
Starting a home health care business can be a rewarding opportunity—both financially and personally—as demand for in-home care continues growing nationwide. Before launching, it’s important to understand the startup costs, what expenses to expect, and how to plan your budget.
This guide breaks down the typical cost to start a home health care agency, including licensing fees, staffing, marketing, technology, and essential insurance coverage.
Average Cost to Start a Home Health Care Business
While costs vary based on your state and business model, most new home health care businesses spend between $30,000 and $90,000 to launch.
The two biggest factors affecting your cost are:
Whether you provide medical care (skilled nursing) or non-medical care (personal care assistance)
State licensing and regulatory requirements
Below is a breakdown of the key costs.
1. Licensing and Registration Costs
Every home health care business must meet legal and compliance standards.
Estimated Costs
Business registration: $100 – $500
State home health care license: $500 – $5,000
Background checks: $50 – $100 per employee
Compliance training: $300 – $1,000
💡 Licensing costs are higher for medical home health agencies, especially if you plan to bill Medicare or Medicaid.
2. Office Setup and Equipment
Even if most services happen in the client’s home, you’ll need a small office for operations.
Estimated Costs
Office lease or coworking: $500 – $2,500/month
Office furniture and equipment: $1,000 – $5,000
Phones, printers, supplies: $500 – $2,000
Some agencies choose a remote or virtual model initially to save on costs.
3. Technology and Software
Technology helps you stay compliant, manage caregivers, and track client records.
Estimated Costs
Home health care management software: $200 – $600/month
Scheduling and payroll tools: $50 – $300/month
Electronic Health Records (EHR): $100 – $500/month
Popular tools include:
CareSmartz360
MatrixCare
Tip: Choose a platform that includes HIPAA compliance, billing, and scheduling in one.
4. Staffing Costs
Labor is your largest ongoing expense.
Estimated Costs
Caregiver recruiting and onboarding: $1,000 – $5,000
Salary/benefits: Varies by region
Training and certifications: $200 – $800
For medical agencies, you’ll hire:
Registered Nurses (RN)
Licensed Practical Nurses (LPN)
Therapists (PT/OT)
For non-medical home care:
Home Health Aides (HHA)
Personal Care Assistants (PCA)
CNAs
5. Marketing and Brand Development
To get clients, you’ll need a strong presence in your local market.
Estimated Costs
Website setup: $1,000 – $5,000
Local SEO and Google Business Profile: Free – $500
Online ads: $300 – $3,000/month
Brochures, business cards, branding: $200 – $1,000
Struggling to market your business? Visit Contractor Back Office for website SEO and marketing support.
Insurance Costs (Required for Most States)
Insurance is not only essential for protection, it is often required to operate legally and contract with hospitals, referral partners, and Medicaid programs.
Estimated Annual Premiums
General Liability Insurance: $600 – $3,000/year
Professional Liability Insurance: $800 – $5,000/year
Workers’ Compensation Insurance: Varies by payroll size
Property Insurance: $400 – $2,500/year
Commercial Auto Insurance: $800 – $3,000/year
7. Optional Medicare/Medicaid Certification
If you plan to serve Medicare/Medicaid patients, additional requirements apply.
Estimated Costs
Accreditation fees: $2,500 – $10,000
Additional compliance training: $500 – $2,000
Accreditation organizations include:
ACHC
CHAP
Joint Commission
Explore More in the guide here
Estimated Total Budget
Cost Category | Estimated Cost |
Licensing & Legal | $1,000 – $10,000 |
Office Setup | $1,500 – $7,500 |
Technology | $500 – $7,200/year |
Staffing | $1,000 – $5,000 (startup only) |
Marketing | $1,000 – $10,000 |
Insurance | $2,000 – $10,000/year |
Accreditation (Optional) | $2,500 – $10,000 |
Total Estimated Startup Cost: $30,000 – $90,000
Ways to Reduce Startup Costs
Start with non-medical home care services
Use a virtual office instead of retail office space
Outsource billing instead of hiring in-house staff
Use digital marketing instead of expensive print materials
Partner with a specialized insurance agency for better rates
Final Thoughts
The cost to start a home health care business varies widely, but with a clear business plan and smart budgeting, you can launch successfully. Understanding your licensing fees, technology needs, staffing requirements, and insurance coverage helps you build a realistic cost estimate and avoid unexpected expenses.
One of the most important investments is insurance, which protects your employees, clients, and business against financial risk. Proper coverage is also a key requirement for working with referral partners, hospitals, and government programs.
Contact us today.
