In a recent study, over 50% of Americans will enter hospice during their final chapter in life, including 70% of those who have cancer and about 45% of those who have non-cancer terminal diagnoses.¹

The good news is that nearly all retirees today have Medicare coverage to help with such expenses.  The last thought on your mind as you or a loved one enters hospice should be what hospice will cost and how you will pay for it.

Medicare Part A covers 100% of certain hospice expenses. This primarily includes services directly related to hospice such as certain equipment, home nursing and potentially even some prescriptions.  Certain services may fall under Medicare Part B, such as doctor visits, blood work, testing, x-rays, etc.

If you are on a Medicare supplement plan these expenses might be mostly covered, but check your plan for details to be sure.  If you are on a Medicare Advantage plan, you will most likely have some additional copays since these are pay as you go plans.

If you are on Original Medicare only, you have the largest amount of risk with the least amount of protection with no out-of-pocket maximum.  It sounds like Medicare covers most of the hospice expenses, correct?

Almost, but not quite.  What Medicare does not cover is room & board.  If one is on hospice in a private home, there simply is no room and board expense.  If you are in a hospice facility you will be required to pay room and board costs unless you have a Long-Term Care policy or Medicaid (or Medical Assistance).

This can quickly get quite expensive.

Sadly, today we had one client enter a hospice facility.  Her husband had to make a down payment of $6,000 to help cover her daily hospice facility charges of about $4oo for room and board.  This is the daily charge at this hospice facility for the first 30 days.

After 30 days, the daily charge lowers to about $315 per day.  If his wife passes away before the $6,000 is spent, he will be given a refund of the difference.

Since the average time of hospice is about one week, there may not be any additional charges.  There are times when individuals can be in and out of hospice for 6 months, racking up charges along the way.

As the statistics show that half of us will probably require hospice, this is a critical scenario to consider in your retirement years to plan accordingly and avoid being caught off guard.

A long-term care policy, life insurance policy or simply adequate savings set aside to help cover health insurance and other end of life expenses are that last love letter to your family, letting them know that you cared enough for them to cover these expenses when the time comes.

Medicare is extremely complex and confusing!  Reach out using any of the following to see how we can of help in your specific situation:

¹ Cagle JG, Lee J, Ornstein KA, Guralnik JM. Hospice Utilization in the United States: A Prospective Cohort Study Comparing Cancer and Noncancer Deaths. J Am Geriatr Soc. 2019 Dec 27.