If your loved one is facing a terminal diagnosis, it might be time to place them into hospice care. Not surprisingly, there is mental and emotional pressure that comes with realizing a loved one has limited time. 

Another consideration further complicating matters is the payment for nursing home services. We’ll discuss who bears the cost of hospice care, the sources of funds for hospice care in nursing homes, and how to know if it’s right for you.

Key Takeaways

• Most people in the United States have health benefits covering most of the cost of hospice care.
  
  

• Hospice care costs typically range between $150 to $500 per day, but Medicare covers most aspects.
  
  

• Hospice care is right if a certified doctor has confirmed the patient has less than six months to live and wants to be fully ready when the time comes.

Who Pays for Hospice Care in a Nursing Home?

The cost and available funds for hospice care won’t be a problem if you or your loved one has prior health investments in insurance, Medicare or Medicaid.

When you enroll someone for hospice care in a nursing home, several factors determine who will bear the treatment cost. However, in most cases, you won’t need to worry about the payments. 

That’s because several funding programs support hospice care expenses.

Government-Backed Programs

The U.S. government initiated several health benefits catering to elderly and low-income people. The following are some of the health benefits:

Medicare

Nancy Heyerman, a certified hospice nurse at Odonata Care, explains:

“If you are a Medicare client, hospice is absolutely free to you. Medicare provides for three major areas of service. Number one: the team of professionals who are going to provide that in-home care and education. It pays for a hospital bed, wheelchair, an overbed table, and anything that’s going to help safe and comfortable care in the home. Medications are number three, and they are related to the admitting illness and medications that would be used for pain and nausea.”

While this is mostly true, Medicare omits certain things. These include room and boarding fees in a nursing home and treatment for things other than terminal illness, such as a broken bone. You may have to consider other funding sources to cover those expenses.

Medicare will not cover the cost of any curative treatment your loved ones sign up for after enrolling in hospice care.

This federal program generally covers all hospice care costs for those 65 years and older or younger people with qualifying disabilities. A patient is eligible for Medicare hospice cost coverage under the following conditions: 

• The individual has enrolled in Medicare Part A or Hospital Insurance.
  
  

• A doctor has certified the individual to be terminally ill with a prognosis of six months or less.
  
  

• The individual has resigned to comfort care and isn’t pursuing curative or life-prolonging treatment. A signed, official statement affirming their intention to not seek other treatments for their condition should back up their decision.

Medicaid

Medicaid is a joint federal and state program that provides health coverage to low-income individuals and families. However, unlike Medicare, this hospice benefit is an option state plan service. This means Medicaid coverage varies by state, and it isn’t automatically available in all states across the U.S.

However, where available, Medicaid typically provides the funds for most, if not all, hospice-related expenses in nursing homes. Check if your state offers Medicaid hospice benefits and its specific eligibility requirements.

VA Programs

Your loved one may also enjoy hospice benefits courtesy of the federal Department of Veterans Affairs if they meet the eligibility requirements. This option is primarily available to veterans in the final phase of their lives. A doctor must diagnose them with having less than six months to live and having no interest in any type of treatment beyond comfort care.

Note that this option is for veterans who served in the military. All enrolled veterans who meet the clinical requirements for this benefit will get full funding support for their hospice care in nursing homes, but that’s not all. The hospice service also extends to care administration in the patient’s home or an outpatient clinic. 

Private Insurance

Aside from government-backed benefits, you may also secure funds for hospice care in nursing homes through private insurance.

Several private insurance plans cover hospice costs and are a viable payment source. These private insurance companies model their hospice coverage after the Medicare benefit program.

However, the coverage may vary depending on each insurer. Understanding your coverage, including covered services and possible out-of-pocket costs is crucial. For instance, some plans may require copayments or have limitations on the duration or scope of hospice services covered. 

Regardless of the coverage scope, private insurance can still help offset a significant portion of the cost.

With Trustworthy, you can manage your family’s insurance policies and find out what coverage it offers. By storing your important documents in a secure location, you can rest assured that everyone can access them when needed.

Personal Resources

If government support or private insurance cannot completely fund hospice care for your loved ones, there is another option. You can source the funds out of pocket, from friends, or through other personal channels such as:

You/Your Family

This might not sound desirable, but it may be the only option you have if the terminally ill patient isn’t eligible for any other benefits. Of course, you may also source the fund for hospice care payments from the loved one’s personal savings.

It’ll be easier if they already have measures like Trustworthy’s Family Operating System® in place. This service helps terminally ill people or those near death secure and organize important family information, such as wills, insurance, taxes, and passwords, with family members and advisors.

Viatical Settlement

Similar to sourcing funding by accessing the loved one’s savings, this option enables you to raise funds for hospice care in a nursing home by selling part of their life insurance policy to a third party.

This option works when the policyholder is terminally ill and provides immediate funding support for those who will pay the cost of hospice care in nursing homes and other attached expenses.

Note that while this option provides immediate cash, it reduces the payout the policyholder’s beneficiaries will receive later. So, you should carefully consider the options before your decision. 

Home Equity

Depending on your circumstances, you may also leverage your home equity through a loan or reverse mortgage to access funds for hospice care in a nursing home. 

However, this option is less desirable, as it creates debt and affects your estate value, so proceed with caution. Learn more through our comprehensive estate planning guide to forward-thinking estate management practices.

Charity Funding

You can also ask for support from non-profit organizations or charitable initiatives. Several foundations provide financial assistance to individuals who need funds to cover the costs of hospice care in the United States. 

How Much Does Hospice Care in Nursing Homes Cost?

According to the U.S. Census Bureau, approximately 39% of people have health coverage from Medicare, 19% from Medicaid, and 1% from the VA. In addition, 92.1% of Americans had health insurance in 2022. 

Since most insurance covers hospice care, close to 92.1% of people in the U.S. have external funding support for hospice care. But you may find yourself among the few who aren’t eligible for any of the above benefits and need to cover the cost of hospice treatment out of pocket. 

In that case, the cost of hospice care in nursing homes varies according to the facility and the quality of service they render.

According to general estimates, the average cost of hospice care in the United States ranges between $150 to $500 per day depending on the type of hospice care.

Most people will have some level of coverage for hospice care, and you may never need to pay any money out of pocket. Or if you have to, it may be a mere 5% of the total cost. 

What Is Covered by Medicare?

Medicare covers most of the costs associated with hospice care through the Medicare Hospice Benefit. You only need to already have Medicare and sign up with a Medicare-approved hospice provider.

• Medicare covers hospice care for those who are terminally ill with a life expectancy of six months or less. 

  
  

• Medicare typically covers the cost of nursing care, medical equipment, medications, and counseling related to the terminal illness.

  
  

• The treatment administered under hospice care may include pain management, emotional support, and other services such as spiritual services. 

  
  

• Medicare will not cover any curative treatment option for the patient. 

In addition, Medicare Part A covers the cost of a short-term stay in certified skilled nursing facilities. Ultimately, the coverage extent will depend on the care period and your available supplemental insurance products. 

Determining If Hospice Care Is Right for You

It may be time to discuss end-of-life care with your loved ones when clinical evidence has determined they have a short time left to live. The following signs indicate it’s time to sign up for hospice care:

The Individual Experiences a Rapid Health Decline

One of the first reasons to consider preparing for the worst is when your health rapidly deteriorates within a short time. This is especially true when this decline persists despite aggressive curative and management treatment.

As soon as it begins to seem like the illness is defying all treatments and there’s no hope of it ever stopping, you may want to begin preparations for the worst. Signing up for hospice care is a great way to make your last days less painful.

In addition, you should start getting your affairs in order. It’s never too early to start preparing for your funeral when you know you don’t have a long time left.

Inability to Perform Daily Tasks

Similarly, when you notice you’re beginning to lose your ability to function properly, it’s time to employ medical assistance in the form of hospice care. It isn’t ideal to wait until you completely stop being able to do things by yourself before seeking the help that you need.

You should sign up for hospice care and let others take care of you while you try to make the most of the time you have left.

That said, you should also consider a few things before opting for hospice care. 

Consider Your Personal Needs

You must consider what you want before signing up for hospice care. According to a Kaiser Family Foundation poll, 70% of Americans would prefer to die at home. You might share this sentiment, in which case an at-home hospice may be the option for you.

Carefully consider your personal needs and wants before signing up for hospice care. Doing so will help you choose the option that will guarantee your maximum satisfaction.

Consider the Financial Implications

If you have coverage that caters to 100% of the hospice care cost, you shouldn’t worry about the financial implications. 

If your coverage only caters to part of the cost or you have no coverage, you may want to consider how you would afford the care if you signed up for it.

You can easily structure your finances and get a great perspective on your financial capabilities using insights from Trustworthy. 

Consult a Doctor

Ultimately, a professional medical practitioner is in the best position to tell you whether you should opt for hospice care. Get a doctor’s opinion and ask for their recommendation before signing up for hospice care.

Frequently Asked Questions

What is the main source of payment for hospice care?

Most people pay for hospice treatment through Medicare, Medicaid, or health insurance plans. However, some people may have to pay out-of-pocket.

Does Medicare pay if the patient is in hospice?

Yes, Medicare covers the cost of hospice care for a terminally ill patient.

How long can you stay in hospice on Medicare?

Medicare covers hospice care for two 90-day benefit periods, followed by an unlimited number of 60-day benefit periods. 

What happens if you outlive hospice?

Patients can continue to receive hospice care if they live longer than six months, as long as a hospice doctor recertifies that they are terminally ill.