End-of-life decisions are among the most difficult to make. They can affect the patient’s family for years to come, both financially and emotionally. Still, decisions involving end-of-life care are made by Americans every day. In 2015 alone, 2.7 million Americans died.
It’s important to make end-of-life decisions based not only on a patient’s needs but also on financial capabilities. Here are some common choices.
What Is End-of-Life Care
End-of-life care is the treatment someone nearing death receives in the final days, weeks, months or sometimes years of his or her life.
During this time, medical care and support continues regardless of whether the patient’s condition is curable or not. Many receive professional medical care in hospitals, nursing homes, or even in their own homes.
Patients are then placed in either palliative care or hospice care, and the costs are paid by Medicare, Medicaid, private insurance, charities, the individual or other payment programs.
Palliative care includes the emotional support and day-to-day help for someone with a life-threatening illness while doctors and nurses pursue a cure. Palliative care starts with the diagnosis and continues until the point at which it becomes clear the patient won’t survive.
Hospice refers to treatment in which nurses, doctors, social workers, volunteers and spiritual leaders come together to provide pain management for patients who are terminally ill.
Unlike palliative care, when a patient enters hospice care, they no longer receive treatment attempting to cure the condition. Doctors have exhausted those options and instead provide relief from the symptoms.
Hospice is not tied to a particular place. It can be offered at home or in an assisted living facility nursing home, hospital or hospice center.
Nearly 42 percent of terminally ill Americans receive some sort of hospice care; 83 percent of them are older than 65, and more than one-third are older than 85.
In 2016, approximately 1.43 million patients received hospice care in 4,382 Medicare-certified hospice agencies: 58% were freestanding or independent facilities; 21.3% were part of a hospital system; 19.2% were home health care-based; and about 1.5% were skilled nursing facility-based. In addition, there are a few hundred agencies that are not certified by Medicare.
Respite care is a short-term break for care-givers of terminally ill patients. The patient can stay for up to five days in a Medicare-approved nursing home, hospital or hospice facility.
Options for End-of-Life Care
There are three major facilities for end-of-life care:
Hospitals offer around-the-clock medical care from doctors and nurses, a full range of treatment choices, modern medical equipment, teams of specialists, and the ability to receive tests and life-saving procedures.
High-intensity hospital care includes Intensive Care Units (ICUs) and Coronary Care Units (CCUs). Approximately 60% of Americans die in acute care hospitals, with 20% spending their last days in an ICU.
Nursing homes, also known as skilled nursing facilities, offer around-the-clock nursing care, although a doctor is not always present. There are more than 15,400 nursing homes in the country, housing more than 1.4 million residents.
According to the U.S. Census Bureau, just over 5 percent of the country’s 49.2 million, 65-plus aged population lives in a nursing home. Residency ratios increase with age: 50 percent of those older than 95 live there. Overall, 20 percent of deaths in the United States take place in nursing homes.
A Patient’s Home
Studies show that while 80% of Americans prefer to die at home, only about 20 percent do. This gap is largely due to the difficulties and costs of caring for a terminally ill patient at home; in most cases, nursing care and special equipment is required.
Who Pays for End-of-Life Care?
About 85% of end-of-life care costs are covered by various government entities, including Medicare, Medicaid, and health care programs sponsored by the Veterans Administration (VA) and the Department of Defense (DoD); and private medical and long-term care insurance.
Hospice costs are paid for in the following manner: Medicare – 85.4%; Medicaid – 5%; managed care or private insurance – 6.9%; other (including charity and self-pay) – 2.7%.
Medicare is required to pay for all medically necessary hospital and doctor care under Parts A and B, regardless of cost or the condition of the patient. Of the 2.7 million Americans who died in 2015, 82% were Medicare beneficiaries at the time of death. Medicare Hospice Benefit has paid for the care of eligible patients since 1982.
Eligibility for Medicare’s Hospice Benefit
- Patient must be 65 years or older
- Diagnosed with a serious illness
- Certification from a doctor that he or she has six months or less to live
- Agrees to forgo life-saving or potentially curative treatment
- Hospice provider must be Medicare-approved
Medicare provides care for two 90-day periods in hospice, followed by an unlimited number of 60-day periods. At the start of each period of care, a doctor must re-certify that the patient has six months or less to live.
Medicare’s hospice coverage includes a broad range of services:
- Nursing care
- Medical social worker services
- Physician services
- Counseling (including dietary, pastoral and other types)
- Inpatient care
- Hospice aide and homemaker services
- Medical appliances and supplies (including drugs and biologicals)
- Physical and occupational therapies
- Speech-language pathology services
- Bereavement services for families
Hospice costs not covered by Medicare
- Room and board
- Emergency care such as ambulance fees or emergency room costs
- Treatment or prescription drugs attempting to cure illness
Children with disabilities or adults who meet Medicaid’s financial eligibility criteria are fully covered for end-of-life care. Medicare beneficiaries who are dual-eligible for both programs (approximately 20% of all Medicare beneficiaries) can have Medicaid cover costs that Medicare doesn’t cover, such as outpatient prescription drugs and long-term care.
Medicaid and Medicare’s hospice eligibility requirements are almost identical: A patient must be certified to have six months or less to live and must receive services from a Medicare-certified hospice facility or agency. However, Medicaid policies can vary from state to state.
In addition to covering hospice services, Medicaid also pays at least 95% of room and board costs for hospice patients in a nursing home. Funds are allocated to the hospice agency, which then pays the nursing facility.
Private health insurance plans vary widely in terms of coverage. If the policy includes hospice, end-of-life care or palliative care, it will cover most of those costs.
Not all plans pay for hospice care, although most do since it is typically much less expensive than hospital treatment. Some policies that cover hospice care may have limits on hospice expenses.
TRICARE is a health care program sponsored by the U.S. Department of Defense that provides health benefits for active military personnel and retirees, and their dependents. Hospice care is covered through this program.
CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs) is a health care program sponsored by the Veterans Administration that insures eligible beneficiaries of certain deceased or disabled veterans. It covers most medically necessary care, including hospice.
Individuals without private health insurance, and who are not covered by a government policy, must pay for end-of-life care themselves. Some hospice care can be paid on a sliding scale, or through charitable or other donations.
Costs for End-of-Life Care
In 2009, Medicare paid $55 million for doctor and hospital bills incurred during the last two months of patients’ lives. Hospital inpatient charges exceed $6,200 per day, and costs to maintain someone in an ICU can reach up to $10,000 per day. Skilled nursing facilities were reimbursed at a rate of approximately $622 per day.
In comparison, total hospice spending for Medicare in 2016 was $16.8 billion, with an average cost of approximately $12,000 per patient. Medicare does not limit payments for hospice care for individuals, but enforces an aggregate cap for agencies of about $24,500 per beneficiary.
Medicare paid an average of $153 per day, per person, in 2016 to cover hospice care, in the following categories:
- Routine home care – $193 per day for services that patients need on a day-to-day basis.
- Continuous home care – $41 per hour for services during crises or at least eight hours a day to manage acute symptoms.
- Inpatient respite care – $173 per day to relieve unpaid caregivers on an occasional basis for no more than five days at a time.
- General inpatient care – $744 per day for care that cannot be provided in other settings.
Hospice services represent a relatively small part of total Medicaid payments.
In 2006, state Medicaid programs spent $1.639 billion on hospice, paying different rates depending on the level of care provided:
- Routine home care – $102 per day.
- Continuous home care – $595 per day.
- Inpatient respite care – $110 per day.
- General inpatient care – $453 per day.
Patients may be responsible for co-payments for outpatient prescription drugs, care in an emergency room or inpatient facility, room and board in a nursing home, etc.