End of Life
Paying For Care
Types of Care Determine Cost
People nearing the end of life often need a great deal of care -- and this kind of health care is typically expensive. How people pay for end-of-life care depends on their financial situation and the kinds of services they want to use. Care services at the end of life can include
- palliative care
- at-home care
- hospice care
- facility-based care, such as a nursing home.
Although some people are cared for at home, most people are in hospitals or long-term care facilities such as nursing homes at the end of their lives. Palliative care is being offered more widely and, increasingly, people are choosing hospice care at the end of life. It is important to plan for the cost of these services as far in advance as possible.
Sources of Payment
To pay for end-of-life care, people rely on a variety of payment sources, including
- personal funds
- government health insurance programs, such as Medicare and Medicaid
- private financing options, such as long-term care insurance.
Review Your Personal Funds
Think about your financial resources and how you feel about using them to pay for end-of-life care. These resources may include
- Social Security
- a pension or other retirement fund
- personal savings
- income from stocks and bonds.
Your home is another type of asset that could be used if needed. For instance, if the home is fully paid for, a reverse mortgage might raise enough money to pay for a considerable amount of in-home care. Unlike a conventional mortgage, none of the reverse mortgage loan amount has to be repaid until the homeowner dies or permanently leaves the home.
It's a good idea to review your insurance coverage. Many health insurance plans provide little, if any, coverage for long-term or end-of-life care.
Government Health Insurance Programs
Another source of funds for end-of-life care is government insurance programs like Medicare and Medicaid.
- Medicare is Federal health insurance for people age 65 and older, younger people with certain disabilities, and all people with late-stage kidney failure.
- Medicaid is Federal health insurance for people of any age with limited income. To be eligible, you must meet certain financial and health requirements. People with financial resources above a certain limit are unlikely to qualify unless they first use their own resources to pay for care, which is called "spending down."
Eligibility for Medicaid and what services are covered varies from state to state. As the Affordable Care Act of 2010 is implemented, Medicaid coverage in many states will change. This includes reforms to hold insurance companies accountable for services provided, to enhance the quality and availability of services, and to expand coverage. (For more information about Medicaid coverage in your state, see www.medicaid.gov.)
Medicare End-of-Life Benefits
Medicare covers medically necessary care and focuses on medical acute care, such as doctor visits, drugs, and hospital stays. Medicare also provides coverage for short-term services for conditions that are expected to improve, such as physical therapy to help you regain your function after a fall or a stroke.
Medicare and Palliative Care.
- Medicare does not use the term “palliative,” but standard Medicare Part B benefits cover certain palliative treatments and medications, as well as visits from palliative care specialists and social workers. The palliative care provider (the organization offering you the services) will bill Medicare for services provided, but be sure you understand what copays or fees, if any, you will be asked to pay. Ask about your responsibility for fees and request a fee schedule before agreeing to receive services.
Medicare and Hospice Care.
You are eligible for Medicare’s Hospice benefit when you meet all of the following conditions.
- You are eligible for Medicare Part A (Hospital Insurance).
- Your doctor and the hospice medical director certify that you have a life-limiting illness and, if the disease runs its normal course, death may be expected in six months or less.
- You sign a statement choosing hospice care instead of routine Medicare-covered benefits for your illness.
- You receive care from a Medicare-approved hospice program.
Medicare defines a set of hospice core services. This means that hospices are required to provide these services to every person they serve, regardless of the person's insurance policy.
Medicare-covered Hospice Services.
Medicare covers the following hospice services and pays nearly all of their costs.
- doctor services
- nursing care
- medical equipment (such as wheelchairs or walkers)
- medical supplies (such as bandages and catheters)
- drugs for symptom control and pain relief
- short-term care in the hospital, including respite and inpatient care for pain and symptom management
- home health aide and homemaker services
- physical and occupational therapy
- speech therapy
- social work services
- dietary counseling
- grief support to help you and your family
You will have to pay part of the cost of outpatient drugs and inpatient respite care.
Length of Medicare Hospice Coverage.
- Medicare can continue to pay for hospice services for longer than six months if the health care provider continues to certify that the person is still close to dying. It is also possible to leave hospice for a while and later return if the health care provider still believes the patient has less than six months to live.
- If your health provider thinks it is too soon for Medicare to cover hospice services, you can explore other ways to pay for the care that is needed. Some private health insurance plans also cover hospice care, but you will need to check with your insurance provider.
- "Medigap" policies, which supplement Medicare, are not designed to meet end-of-life care needs. But some policies cover copayments for nursing home stays that qualify for Medicare coverage.
Medicaid End-of-Life Benefits
Medicaid provides coverage for several services that can help someone near the end of life. These include personal care, home health care, and nursing home care.
Medicaid and Palliative Care.
- Like Medicare, Medicaid does not use the term “palliative.” Depending on the state, Medicaid may cover certain palliative treatments and medications as well as visits from palliative care specialists.
- The palliative care provider (the organization offering you the services) will bill Medicaid for services provided, but be sure you understand what copays or fees, if any, you will be asked to pay. Ask about your responsibility for fees and request a fee schedule before agreeing to receive services.
Medicaid and Hospice Care.
- The Medicaid Hospice Benefit is identical to the Medicare Hospice Benefit in states where it is offered. Some states impose limitations on the length of time coverage is offered or who is considered eligible, however, so it is important to check with your state’s Department of Health or Agency on Aging.
Long-Term Care Insurance Can Fill in Gaps
Long-term care insurance helps fill in the gaps where Medicare and Medicaid coverage stops. Long-term care insurance policies provide a great deal of choice and flexibility. You can select from a range of care options and benefits, including palliative and hospice care, that allow you to get the services you need, when and where you need them.
The cost of your long-term care policy is based on the type and amount of services you choose to cover, how old you are when you buy the policy, and any optional benefits you choose, such as benefits that increase with inflation.
If you are in poor health or already receiving end-of-life care services, you may not qualify for long-term care insurance. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate.
You can also purchase nursing home-only coverage or a comprehensive policy that includes both home care and facility care. Many companies sell long-term care insurance. It is a good idea to shop around and compare policies.
Paying for Nursing Home Care
Many people spend their final days in a nursing home. Because nursing homes cost so much -- thousands of dollars a month -- most people who live in them for more than six months cannot pay the entire bill on their own. Instead, they "spend down" their resources until they qualify for Medicaid. There are rules for spending down resources. Nursing home care generally costs more than home-based care unless you need extensive services at home.
For More Information
The National Clearinghouse for Long-Term Care Information (www.longtermcare.gov) has information about long-term care planning and services. This website, run by the U.S. Administration on Aging, lists other sources of information and defines important terms.
To find out what long-term care services are in your community, call Eldercare Locator at 800-677-1116 or visit www.eldercare.gov