Hi everyone! Welcome back to Melissa Making Cents!
As a CERTIFIED FINANCIAL PLANNER™, it's often necessary to talk with clients about difficult subjects like budgeting, illness and death. Let's face it, there are not many of us that are willing to process our own mortality without being overwhelmed with emotions. And.... only a few of us would pre-plan a star studded memorial like the pop legend Prince or Muhammad Ali. Unfortunately, I can never quite stress enough how important it is to discuss the topics of healthcare and death. Planning in advance will help your loved ones know your wishes, and allow your needs to be taken care of appropriately.
As I’ve mentioned in previous posts, my stepfather struggled with significant health issues over the past few months. Paul had been diagnosed with metastatic jaw cancer a little over four years ago at the young age of 61. Ultimately, he went on hospice care in March of this year. It’s been an emotionally draining experience for my family, but it also served as a crash course in hospice care, medical coverage, and end-of-life financial implications. So to help others who are in the same boat, I’m dedicating today’s post to providing an overview of hospice, what’s covered, and how to put your family on the best financial footing if a family member requires hospice care.
Hospice is medical care designed to help someone with a terminal illness maintain their quality of life until death.
Hospice refers to healthcare that attempts to reduce the pain and suffering of a terminally ill patient and their family, through a combination of medical, mental, and emotional support. This is referred to as “palliative care,” which is designed to provide comfort for a person’s final days, rather than helping to cure a disease. As in Paul's case, hospice care can be provided in the patient’s home or the home of a family member. However, hospice can also be provided in a designated long-term residential center, a hospital, assisted living center, or a nursing home.
Contrary to popular belief, hospice is not only for cancer patients. A number of other conditions, such as congestive heart failure, dementia, renal disease, and other terminal illnesses are viable reasons for someone to seek hospice care. A patient would generally become eligible for hospice when they have 6 months or less to live, have experienced steep declines in health, were subject to frequent hospitalizations in a short time period, and are willing to waive medical treatments designed for prolonging life.
If a patient lives longer than the 6 month period, they can continue receiving hospice care as long as a hospice medical director or hospice doctor re-certifies your terminal illness. You will receive two 90 day benefit periods, followed by unlimited 60 day periods, but they will all require re-certification.
What happens if you stop hospice care?
Patients have the right to terminate hospice care if the illness goes into remission, or you no longer need the care. Stopping hospice care is a choice only you can make, and you shouldn't sign or date any forms until the actual date that you want your hospice care to stop.
If you were in a Medicare Advantage Plan when you started hospice, you can stay in that plan by continuing to pay your plan’s premiums. If you stop your hospice care, you’re still a member of your plan and can get Medicare coverage from your plan after you stop hospice care. If you weren’t in a Medicare Advantage Plan when you started hospice care, and you decide to stop hospice care, you can continue in Original Medicare.
If you’re eligible, you can go back to hospice care at any time
Hospice is generally covered under most major insurance plans and Medicare.
The cost of hospice care is typically covered under Medicare, Medicaid, or private insurance. However, you would need to find a hospice provider that is approved under the specific insurance, otherwise you could be in for a nasty bill!
Since hospice is for end-of-life care, most patients are covered by the Medicare Hospice Benefit. In order to receive this benefit, however, the patient would need to sign a written statement choosing hospice care instead of other Medicare-covered benefits that would treat the underlying terminal illness with the goal of getting better.
The Medicare Hospice Benefit would cover the following healthcare services:
- Doctor services
- Nursing care
- Medication for symptom control or pain relief
- Medical equipment such as wheelchairs or walkers
- Medical supplies such as bandages and catheters
- Physical and occupational therapy
- Speech-language pathology
- Dietary counseling
- Pain management services
- Short-term inpatient care for pain and symptom management
- Respite care (short-term relief for primary caregivers)
- Grief and loss counseling for patient and loved ones
If a patient doesn’t have Medicare, most other forms of insurance would cover the same types of medical services under hospice. It’s always a good idea to double check with the insurance company.
Even though hospice care is covered under Medicare, there are still some out-of-pocket costs to be aware of.
In the journey with my stepfather, we learned the hard way that hospice doesn’t cover all expenses. You see...Paul turned 65 in May, and qualified for Medicare. Since he was already on hospice at that point, I was given the advice that he did not need a supplemental policy that would only cost $150 a month. In hindsight I should have brushed up on the coverage limitations and treatments, because not selecting the $150 month supplemental policy ended up costing us $10,000 in emergency room expenses.
Because hospice is designed for palliative care, hospice benefits will not pay for:
- Treatments intended to cure the terminal illness or health issues unrelated to that illness
- Prescription drugs to cure the illness or other health issues
- Room and board in a nursing home or hospice residential facility
- Care in an emergency room, inpatient facility care or ambulance transportation, that hasn’t been arranged by the hospice team
In my stepfather’s case, our family had to deal with some unexpected hospital visits that weren’t covered under hospice. That’s why it’s so important for patients to ensure adequate healthcare coverage--and the earlier, the better! One option to anticipate additional hospice costs in advance is to enroll in a Medigap or Medicare Advantage policy, which covers costs for prescriptions drugs and healthcare for problems that aren’t related to a terminal illness. Had we had a supplemental health policy in place at the time, we wouldn’t have had to pick up a large number of expenses due to these hospitalizations. Another option to help cover the medical costs is to use a Health Savings Account (HSA).
Even with hospice services that are covered, there are some expenses that a patient might incur. While patients aren’t expected to contribute to a deductible or coinsurance, they are still responsible for Medicare Part A premiums (if they haven’t paid Medicare taxes for 40 quarters), Part B premiums, a copayment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management, and 5% of the Medicare-approved amount for inpatient respite care. These are also costs that could be covered with a supplemental policy.
Needless to say, I’ve learned a lot about hospice (and its associated costs) recently through personal experience! But more than anything else, I am so, so grateful for my stepfather’s dedicated team of medical professionals who provided him (and our family) with comfort during these trying times.
Until next time...this is Melissa Making Cents!
Melissa Anne Cox CERTIFIED FINANCIAL PLANNER™ is also a College Planning and Student Loan Advisor in Dallas, Texas.