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How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets (2021 Edition)
author: Gabriel Heiser, J.D., Attorney.

This book is a financial and legal guide to the ins and outs of the only government program that will pay for the long term nursing home care of your family member: MEDICAID.

$47.00 | 301 pages | More about the Book


by Thomas Day

Medicare Nursing Home Coverage
Medicare Home Care Coverage
Medicare Hospice
Part A
Part B
Part D

Medicare Nursing Home Coverage

Medicare is the vision and campaign promise of President John F. Kennedy to provide universal medical insurance to all aged Americans. His untimely death did not allow him to fulfill his promise, but President Lyndon Johnson was able to win passage of the plan in the form of amendments to the Social Security Act. Passed in 1965, Title VIII of the amendment established Medicare and Title IX established Medicaid.

Medicare Part A & B is now the health insurance plan for all eligible individuals age 65 and older and certain younger disabled persons. Because of its universal availability almost everyone over age 65 in this country is covered by Medicare. There are about 40 million Medicare beneficiaries nationwide.

Medicare will pay for 20 days of a skilled nursing care facility at full cost and the difference between $152 (2014) per day and the actual cost for another 80 days. Private Medicare supplement insurance usually pays the deductible of 80 days at $152 per day if a person carries this insurance and the right policy form. However, Medicare often stops paying before reaching the full 100 days. When Medicare stops, so does the supplement coverage. The average paid Medicare nursing home stay was 23 days in 1997, only 1/5 of the allowable time. Nationwide, Medicare paid 12% of nursing home receipts in 1998.

To qualify for Medicare nursing home coverage, the individual must spend at least 3 full days in a hospital and must have a skilled nursing need and have a doctor order it. The transfer from a hospital must occur within a certain time period.

There is a misconception that Medicare automatically covers up to 100 days of most nursing home stays. Even though a large number of nursing home admissions come from hospitals, not all of these receive Medicare. Many are younger than 65 and not on Medicare. For those over 65, a hospital stay resulting in nursing home care does not automatically qualify for Medicare coverage. The stay may have been less than 3 full days or there may not be a skilled need. And as has already been pointed out, even if a person qualifies for Medicare coverage it is likely to be much less than 100 days. The average coverage is about 20 days.

Medicare will not pay nursing home costs for someone admitted from his or her home. Almost half of those admitted to nursing care come directly from home.


Medicare Home Care Coverage

Medicare is a principal provider of home health care and hospice care in the nation; although, there is now a growing trend for Medicaid to provide home care.

Home health care, instead of nursing care, is often used as an alternative for hospital patients recovering from hip or foot surgery, joint replacement or complications of diabetes. In addition, homebound patients not having spent time in a hospital, but suffering from congestive heart failure or other disabling conditions are sometimes covered with "episodes" at home.

Home care must be under a "plan of care" ordered by a doctor. There must be a skilled need requiring frequent visits by either a therapist, LPN or RN. Although allowed prior to 1997, blood draws are not covered. As part of the plan of care, aides may also be provided to help with bathing, dressing, transferring, toileting, incontinence or feeding. In addition, social services are often provided. The patient must be homebound, meaning it would be very difficult to leave the home during the period of recovery. Although, a recent ruling now allows Medicare home care patients to leave their home for therapy or treatment and still receive coverage. Medicare part B may also cover certain durable medical equipment for home care such as bed rails, walker, etc.

Prior to 1997, Medicare payments were very helpful in allowing long-term care recipients to stay at home and avoid institutions. But, Medicare was never intended to pay for chronic, long-term home care. A 1989 lawsuit asserting rights of homebound recipients as well as a lack of Medicare oversight allowed the system to get out of hand. Home health payments by Medicare increased an astounding 25% a year between 1990 and 1997, about 4 times the health care inflation rate.

In 1996, Congress passed the Balanced Budget Act and along with the Health Insurance Portability and Accountability Act of the same year, access to Medicare home health was restricted and the intent of only covering acute-care recovering patients was reasserted by these Acts.

In November 1997, under BBA, Medicare adopted an interim payment system based on a projected 1999 implementation of a Prospective Payment System for home care. PPS greatly restricted eligibility and reimbursements for homebound patients. Medicare home health benefits went from a high of $18.3 billion in 1997 to $9.5 billion in 1999, a drop almost in half. At the same time demand for covering more home care patients increased. After 1997, the number of home health agencies fell by a large amount almost overnight. Home health was 8.8% of Medicare's budget in 1997. In 1999 it was 4.6% of the budget. Medicare paid 35.6% of home health costs in 1998.

Under Prospective Payment, a health agency is only reimbursed per patient for each 60 day episode. This does not mean care can be less or more than 60 days since the agency can schedule visits until the prospective payment runs out. There are provisions to cut off reimbursement if the patient recovers early, or to extend payment if the condition worsens. Recent complaints from the home health industry indicate that Prospective Payment is not covering actual care given.

Medicare is not now a source of help for chronic, non-improving and homebound long-term care recipients. Recently, because of pressure from home health agencies, Congress passed legislation to restore some funding to home care.

Medicare Hospice

There are many decisions to be made when imminent death is approaching for a loved one.  Questions regarding what type of care, medical assistance and even physical location for their last days confront us.

If care has been in the home, should loved ones be moved to a facility or remain at home? If in a care facility should they be moved home for their last days? Will 24-hour care become necessary and more medical assistance be required?

If you are asking these questions, a hospice service might be a good solution. Hospice can be provided to a person who has a life-limiting illness wherever that person lives. A nursing facility or long-term care facility can receive visits from hospice personnel in addition to the other care and services provided by the facility.
Hospice care is a special way of caring for a patient who is in the last stages of life. Hospice provides a team of professionals who aid the patient and family caregivers. This could include nurses, social workers, physicians, clergy and aides who all work together to plan and coordinate care, 24 hours a day or as needed.

The Hospice Foundation of America outlines the following services of hospice:

  • Hospice is a special concept of care designed to provide comfort and support to patients and their families when a life-limiting illness no longer responds to cure-oriented treatments.
  • Hospice care neither prolongs life nor hastens death. Hospice staff and volunteers offer a specialized knowledge of medical care, including pain management.
  • The goal of hospice care is to improve the quality of a patient’s last days by offering comfort and dignity.
  • Hospice care is provided by a team-oriented group of specially trained professionals, volunteers and family members.
  • Hospice addresses all symptoms of a disease, with a special emphasis on controlling a patient’s pain and discomfort.
  • Hospice deals with the emotional, social and spiritual impact of the disease on the patient and the patient’s family and friends.
  • Hospice offers a variety of bereavement and counseling services to families before and after a patient’s death.

To be eligible for hospice a physician must certify the patient to be terminally ill with a life expectancy of six months or less and treatment for a cure is no longer provided. The physician can also indicate that the patient is deteriorating and no longer thriving and this is an assumption of life expectancy of six months or less.

The focus for the patient has changed to supportive care and quality of remaining life.
Hospice is paid for by private insurance, Medicare or Medicaid Hospice Benefit or personal funds. Here are the conditions that apply for Medicare Hospice Benefits:

  • You are eligible for Medicare Part A (Hospital Insurance)
  • Your doctor and the hospice medical director certify that you’re terminally ill and have 6 months or less to live if your illness runs its normal course.
  • You sign a statement choosing hospice care instead of other Medicare-covered benefits to treat your terminal illness.
  • You get care from a Medicare-approved hospice program
  • You understand that Medicare will still pay for covered benefits for any health problems that aren’t related to your terminal illness.

Special benefit periods apply to Medicare hospice care and some services do not apply.
Be sure to understand the rules and requirements of Medicare payment before you commit.
Hospice is available to anyone, regardless of age or illness. If Medicare or private insurance is not available, hospice services may be available for low income individuals through grants or charitable donations. Many hospices are non-profit and will provide services to anyone in need.
Many families or their loved ones’ doctors often wait too long to order hospice. Hospice is a very valuable service and should be ordered at an earlier stage of illness. Many do not consider hospice for Alzheimer’s, degenerative old age or other debilitating illnesses where a person is going downhill fast. They should.

It is unfortunate that many people who died in a hospital emergency room or who received heroic treatments to prolong life in a hospital may have had the alternative of dying at home in familiar surroundings, with family or other loved ones at their side.

When someone is in crisis or appears to be going downhill fast but there really is no hope for recovery, family often call 911 and start a process which can result in great stress and great emotional discomfort. The loved one who is dying ends up in a hospital and may die there or be transferred to a nursing home where death eventually occurs.

When there is no longer hope for prolonging life, especially when this decision is made months in advance, hospice is usually a better alternative to other medical intervention.

The days leading up to the moment of death of a loved one can be rich with meaning and expressions of love. Family and caregivers should allow others to help with the care and daily responsibilities.  They need to free themselves from the details of caregiving and instead need to use hospice to allow more time to reminisce, give thanks for a life shared and say goodbye.

Part A

Deductibles and Co-Pays -- Inpatient Hospital (2014)
Medicare pays hospital care with deductibles as outlined here. You pay the deductible or if you purchase Medicare supplemental insurance it will pay the deductible.

  • $1,1216 deductible - first 60 days
  • $304/day coinsurance - 61st through 90th day
  • $608/day coinsurance - 91st through 150th day
  • Beyond 150 days you or your supplement insurance pay the total cost
  • There is a one time, "lifetime reserve" of 60 days that medicare will also pay.

Under Part A, you are also allowed 3 pints of blood.

Part B

Medicare Part B covers outpatient services and doctors. This is an optional plan from Medicare to help pay for outpatient and doctors care. This plan must be signed up for during a prescribed enrollment period. There is a monthly premium which is deducted from your Social Security payment. There is also an annual deductible. Part B premiums and deductibles go up every year. Medicare Supplement Insurance usually pays for deductibles and co-pays not covered by Medicare.

  • Monthly payment for Medicare Part B--$104.90 per month in 2014 for individuals filing tax returns with $85,000 or less in income and couples filing joint returns for $170,000 or less in income.
  • Monthly payments for individuals filing taxes with more income go up on a predetermined scale with the highest premium being $335.70 a month
  • Annual deductible - $147 per calendar year in 2014
  • Medicare pays 80% of most covered services, leaving 20% paid by coinsurance or personal funds. These co-pays apply to charges which the health care provider has agreed to from Medicare. Any charges from the provider over the amount agreed to with Medicare must be paid out-of-pocket by the Medicare beneficiary.
  • Certain lab tests and vaccines are paid at 100%

Medicare part B may also cover certain durable medical equipment for home care such as hospital bed, walker, etc.

  • $0 deductible - Home health care under physicians prescription for skilled need is paid 100%
  • $147 deductible and 20% coinsurance for "Durable Medical Equipment".

Part D

Prescription Drug Plans
The plan design for the new Prescription Drug Plan (PDP) is outlined in the Medicare modernization act of 2003. The cost of these new plans is being phased in with the new Affordable Healthcare Act.

PDP insurance plans can only be sold by private companies or regional Blue Cross plans that have presented bids to Medicare and have been accepted and approved to sell these plans in various regions in the country. The plans can be sold as standalone drug coverage or they can be included in Medicare PPO and HMO Advantage Plans. Drug plans sold in conjunction with private Fee for Service Advantage Plans are considered standalone plans.

These plans cannot be sold through Medigap or supplemental insurance policies. Existing HMO Medicare private plans not offering drug plans will be adding these plans and private HMOs already offering drug coverage may modify their coverage to include a new PDP. Employers who offer drug coverage to retired employees are allowed to offer these plans as a replacement for existing coverage. The plan provider for employee plans will likely be one or more of the insurance companies allowed to sell this insurance by Medicare.