Ways To Finance Long-Term Health Care Expenses

Although long-term care facilities come with a high price tag, they frequently prove to be a more cost-effective option than hiring round-the-clock care at home. Furthermore, such facilities can provide temporary rehabilitation services aimed at helping patients to return home. If you anticipate requiring care for yourself or a loved one, it is advisable to inquire about payment options ahead of time.

Medicare

Medicare is a federal program that provides coverage for a certain number of days of inpatient rehabilitation at a skilled facility. This type of care is often referred to as “sub-acute rehab” or “post-acute care.” However, it’s worth noting that the number of days covered by Medicare may be limited, and patients may be responsible for some out-of-pocket costs.

Conditions like hip fractures, stroke, or cardiac conditions are common reasons for inpatient rehabilitation, there are many other medical conditions or situations that may require physical, occupational, or speech therapy. For instance, someone who has undergone surgery may need inpatient rehabilitation to recover their strength and mobility. Other examples include neurological disorders, amputations, and severe burns, among others. As long as the treatment is deemed medically necessary, individuals may be able to access coverage for inpatient rehabilitation through Medicare.

To be eligible for Medicare, you must:

• Be over age 65,
• Have a documented disability
• Have end-stage renal disease

Provided that you meet the eligibility criteria, Medicare can offer outstanding coverage for medical expenses. However, it’s crucial to understand that this coverage is typically only available for a limited period and in specific situations. It’s worth noting that Medicare doesn’t provide ongoing coverage for care.

Accessing Coverage

Enrolling in Medicare does not require filing a claim or demonstrating financial need. If you have Medicare Part A and Part B coverage, you are automatically eligible for the program’s financial benefits.

Typically, individuals who receive Social Security benefits will have both Part A and Part B coverage.

Covered Costs

During the period of inpatient rehabilitation, Medicare covers the daily cost of physical therapy, occupational therapy, and/or speech therapy. Additionally, Medicare provides coverage for necessary medications, treatments, and medical supplies.

The extent of Medicare’s coverage depends on the duration of your care. To put it simply, the answer is: It varies. Medicare will cover the entire cost of the initial 20 days of rehabilitation at a long-term care facility, provided that you continue to meet the eligibility criteria for those 20 days.

After day 20, you will be required to make a co-payment for each subsequent day. Medicare will then cover the remaining cost per day for up to 100 days.

To cover the co-payment for inpatient rehabilitation beyond the initial 20 days, you have the option of purchasing a supplemental policy, commonly referred to as Medigap insurance. Many of these policies cover the entire co-payment, eliminating any out-of-pocket expenses for your rehabilitation stay.

Note Medicare will pay for care coverage more than once. If you’ve previously used it, you must have 60 days where you didn’t use it to become eligible again. Facilities must also be certified by Medicare to provide inpatient rehabilitation.

Maximizing Medicare Benefits for Inpatient Rehabilitation up to 100 Days

There is a common misconception that Medicare automatically provides coverage for up to 100 days of rehabilitation. However, while Medicare does offer this benefit, the eligibility criteria (outlined below) often result in individuals receiving only a few days or weeks of coverage.

There is no guarantee as to the number of days that Medicare will pay; rather, it depends on each individual’s needs and assessment.

Criteria

There are certain conditions under which Medicare will pay. The following criteria must be met:

Three-Day Hospital Stay

In order to be eligible for Medicare coverage of rehabilitation services, you must have been admitted to the hospital as an inpatient for a minimum of three days.

If you were classified as an “observation” patient, Medicare will not cover your services. Additionally, even if your hospitalization was classified as inpatient, if you were only present for less than two midnights, Medicare will not cover the stay.

It’s important to inquire with the hospital about the status of your stay (inpatient or observation), and to ensure that you have fulfilled the three-day stay requirement in order to access Medicare benefits.

Timing Requirements

Assuming you have met the three-day hospitalization requirement, you are able to utilize Medicare’s rehabilitation benefit immediately following your hospital stay by directly transferring to a rehabilitation facility.

For instance, if you undergo hip surgery and opt to return home after being discharged from the hospital, you may still elect to be admitted to a rehabilitation facility three weeks later and access the Medicare benefit to cover your rehabilitation stay and therapy costs. It’s essential to keep in mind that the reason for your admission to the facility must be the same as the cause of your hospitalization.

Medical Criteria

In addition to meeting the hospitalization requirement, it’s important to continue meeting the eligibility criteria for Medicare coverage while receiving rehabilitation services at the facility. These criteria are determined through the Medicare Data Set (MDS) assessment, which is periodically conducted by the facility’s staff to evaluate your functioning.

The MDS is a comprehensive evaluation carried out by staff members from various departments, including nursing, dietary services, activities, and social work. It assesses your current abilities and tracks your progress toward your rehabilitation goals.

Medicare will continue to cover your inpatient rehabilitation stay if you require skilled care, such as physical, occupational, or speech therapy, or care provided or supervised by licensed nursing staff. However, if you no longer require these services (as determined by the MDS), you will be issued a written notice informing you that Medicare will no longer provide coverage for your services.

Medicare Advantage Plans

Some individuals opt to forego the traditional Medicare plan and instead enroll in a Medicare Advantage plan, which is Medicare coverage administered by a group other than the federal government. Medicare Advantage plans (also known as Medicare Part C) offer coverage similar to that of the traditional Medicare plan, with a few exceptions:

• Some Advantage plans do not require a three-day inpatient hospital stay. They may provide financial coverage at a facility even if the person is admitted directly from their home or has spent less than three days in the hospital.
• Some Advantage plans have specific facilities that they designate as in-network (or preferred) and others that are deemed out-of-network. If the rehabilitation care facility is not within your Advantage plan’s network, your services may not be covered, or they may be covered at a reduced rate.
• Many Advantage plans necessitate prior authorization by the insurance plan for services to be covered, whereas traditional Medicare does not. This prior authorization process involves submitting your medical information to the insurance plan for review.

The Advantage plan then decides whether or not to cover your rehabilitation services. If the prior authorization is not conducted, or if your stay is not authorized, the Advantage plan will not provide payment for your services.

Long-Term Care Insurance

Long-term care insurance is a type of insurance that covers the cost of a certain duration of stay in a care facility. The amount of coverage and cost vary significantly based on the length of coverage you purchase and whether you opt for full or partial coverage.

Furthermore, most long-term care insurance companies have a list of conditions or medications that can make an individual ineligible for coverage or significantly increase the cost.

These may include neurological conditions such as Alzheimer’s disease or other dementias, Parkinson’s disease, certain heart conditions, and the use of particular psychotropic medications.

If you apply for long-term care insurance at a younger and generally healthier age, you will pay premiums over a more extended period (often at a much lower rate). However, if you apply later in life when the likelihood of needing a care facility increases, your monthly rate will be significantly higher, with rates often increasing annually.

Whether long-term care insurance is a suitable option for you will depend on numerous factors, so it’s advisable to discuss cost and coverage options with your insurance agent.

Medicaid

Many individuals plan and save money for their care in later life, but sometimes the cost of that care can quickly deplete their resources. When this happens, they may be eligible to apply for Medicaid.

Medicaid is a federal government assistance program administered by each state, which provides aid to those who have exhausted their financial resources.

To qualify for Medicaid, an individual must demonstrate financial eligibility by having less than $2,000 in countable assets and medical eligibility by showing a level of assessment that indicates a need for care.

Additionally, Medicaid has provisions in place to prevent impoverishment for the spouse of a care facility resident who will continue to reside in their own home or in another facility.

Veterans Administration Aid and Attendance

If you or your spouse is a veteran, you may qualify for financial assistance from the Veterans Administration . To apply, you must submit an application which may take around three months to be processed.

Once your application is approved, you will be eligible for a monthly benefit per person who served, which can be utilized to help cover care expenses.

Private Pay (Out-of-Pocket)

Another method of paying for care in a facility is through out-of-pocket payment, commonly known as private pay. Opting for private pay typically provides you with more facility options to choose from, as most facilities prefer private pay or Medicare clients over Medicaid. However, private pay for facility care can be costly, with expenses ranging from $250 to $350 per day or more, resulting in annual expenses of $80,000 to $125,000.

These costs may only cover a semi-private or shared room, with private rooms often requiring an additional fee per day.

A Word From TGH Urgent Care powered by Fast Track

Being prepared and aware of your options can be extremely beneficial in the event that you need to pay for long-term care. Furthermore, certain community organizations and care facility staff members can assist you in accessing your potential benefits.

Although the expenses associated with long-term care can be significant, it is reassuring to know that various options are available to help offset these costs if you are unable to pay in full, as is the case for many people.

Sources:

TGH Urgent Care powered by Fast Track uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles.

1. Kumar A, Rahman M, Trivedi AN, Resnik L, Gozalo P, Mor V. Comparing post-acute rehabilitation use, length of stay, and outcomes experienced by Medicare fee-for-service and Medicare Advantage beneficiaries with hip fracture in the United States: A secondary analysis of administrative data. PLoS Med. 2018;15(6):e1002592. doi:10.1371/journal.pmed.1002592
2. Medicare.gov. How do I sign up for Medicare?
3. Medicare.gov. Skilled nursing facility (SNF) care.
4. Medicare Advantage. SNF care past 100 days.
5. Medicare.gov. Are you a hospital inpatient or outpatient.
6. U.S. Office of Personnel Management. Federal Long Term Care Insurance Program (FLTCIP).
7. Medicaid.gov. Learn how to apply for coverage.
8. Megicare.gov. Inpatient rehabilitation care.

Additional Reading

• gov. Nursing Home Compare. 
• S. Department of Health and Human Services. LongTermCare.gov. Medicare. 
• S. Department of Health and Human Services. LongTermCare.gov. Who Pays for Long-Term Care?