IN 2016, MORE THAN 1 million Medicare beneficiaries died while receiving hospice care, according to data compiled by the National Hospice and Palliative Care Organization. “Few people know that hospice is not just for the patient, but for the family,” says Edo Banach, president and CEO of NHPCO, a nonprofit representing hospice and palliative care programs and professionals. In addition to medical care for pain relief and symptom management, therapy and other services associated with end-of-life care, hospice programs provide counseling, spiritual care and bereavement support for patients and family members alike.
“It’s a tremendous value,” says Chris Orestis, executive vice president of Minneapolis-based GWG Life, a firm that helps people sell their life insurance policies.
Given the level of care and support offered, you may think hospice is expensive and out of reach financially. But depending on your health insurance, you may have virtually no out-of-pocket costs.
Still, not all services are covered, and patients and their families will be responsible for the cost of a nursing home or assisted living facility if a person needs ongoing custodial care. Read on to learn more about the costs and benefits of hospice care and decide whether it’s the right option for you or a loved one.
There are myriad Medicare benefits for hospice patients. Most hospice patients are older and receive their health insurance through the government’s Medicare program. For those who are certified as terminally ill with a life expectancy of less than six months, the program covers hospice services entirely.
“It’s designed to not have any out-of-pocket costs,” says Patrick Simasko, attorney and wealth preservation strategist at legal firm Simasko Law in Mount Clemens, Michigan. However, to get this coverage, patients have to agree to forgo curative treatment. In other words, the only care provided by hospice is for comfort; it’s not intended to cure an illness or prolong life.
The Medicare hospice benefit covers virtually all services needed to manage a terminal illness and related conditions. A team of workers including doctors, nurses, social workers, counselors and physical therapists may be assigned to a patient. Plus, on-call care is available 24 hours a day, and short-term respite care is also a covered benefit.
For all this, the only additional costs are the Part A and Part B premiums, totaling $134 a month for most people in 2018 (or higher, depending on your income), along with a $5 copayment for prescriptions used for pain or symptom management. There is also a 5 percent coinsurance requirement for short-term respite services, which Banach says equals less than $10 per day in most situations.
However, these benefits are only available for services related to the terminal illness. Medications and services related to other conditions would be subject to the normal deductible, copayment and coinsurance requirements of a person’s plan.
Consider other coverage options. Those who don’t have Medicare may receive hospice coverage through Medicaid or private health insurance. Like Medicare, these options typically provide coverage at little to no out-of-pocket cost to patients.
Medicaid, a government health insurance program for low-income households, covers hospice care in most states. While states paying for hospice are required to provide at least 210 days of care through the program, eligibility can vary across the country. Some states, such as Texas and Kentucky, mirror Medicare requirements and stipulate that only those with a life expectancy of six months or less are eligible for hospice care. Others, like New York, will admit those with a life expectancy as long as a year. Like Medicare, Medicaid requires patients to decline further curative treatments. The exception is for those age 21 or younger. They may continue to seek a cure while receiving hospice.
Private health insurance companies vary in their hospice policies although many provide some level of coverage. “It’s a lot less expensive for insurance companies to go through hospice,” Simasko says.
For instance, Medicare saves nearly $6,430 for each patient enrolled in hospice for 15 to 30 days, according to a study published in 2013 by the journal Health Affairs. Another study, published in 2015 by the Journal of Palliative Medicine, found expanded use of hospice could save Medicare up to $940 million annually. Since patients are no longer seeking a cure, it eliminates the costly emergency room visits and treatments that are often associated with a serious illness.
Patients who don’t have insurance coverage for hospice may find financial assistance through a local organization. “A lot of hospice programs are mission-driven and nonprofit,” Banach says. Since many regions are served by multiple hospice organizations, it’s wise to contact several to see what service options and assistance they provide.
Remember, custodial care is not covered. While hospice benefits are comprehensive, they will not cover room and board or ongoing custodial care. Terminally ill patients can receive hospice care in an assisted living facility or nursing home, but they’ll have to pay for their stay out-of-pocket.
“That can easily run $5,000 a month,” Orestis says. Families may be able to pay the cost through long-term care insurance, a reverse mortgage or personal savings. Medicaid may pay for nursing home care for low-income patients with limited assets. A life insurance viatical settlement, which allows a person to sell an existing life insurance plan, is another way to pay for custodial care. Private companies negotiate these sales, and people should get quotes from several firms to ensure they are receiving the best price possible.
Those patients who remain in their homes may get frequent visits from nurses and other aides, but don’t expect round-the-clock staffing. “Hospice will not be paying for a caregiver to sit by dad’s side,” Simasko says.
Hospice is a valuable benefit that can provide comfort to both a patient and his or her family during a difficult time. And with minimal out-of-pocket costs, this type of care offers the chance to say goodbye to a loved one without financial stress.
