Hospice and Medicare — how the benefit works financially
This article is for informational purposes only and does not constitute medical, legal, or financial advice. Always consult with qualified professionals regarding your specific situation.
One of the great mercies of hospice is that when your parent is eligible for Medicare hospice benefits, the financial burden changes. The worry about costs that might have been crushing you during the illness suddenly lifts. Medicare covers hospice care comprehensively. You don't get bills for doctor visits. You don't get bills for the nurse's time. You don't get bills for medications or equipment. For families managing both grief and financial strain, this is a deep relief.
Understanding how the Medicare hospice benefit works helps you plan. It helps you make decisions without being blindsided by unexpected costs. It helps you know what's covered, what you might pay out of pocket, and what other resources are available to help.
What Medicare hospice covers
Medicare covers the full cost of hospice care for eligible patients. This is extraordinary. In most medical situations, Medicare covers eighty percent and you pay twenty. With hospice, Medicare covers it all. There are no copayments. There are no coinsurance amounts. There are no deductibles to meet first.
What's included in full coverage: all visits by hospice nurses, social workers, chaplains, and doctors. All medications related to the terminal diagnosis. All medical equipment needed for hospice care—hospital beds, oxygen, catheters, wound supplies, commodes. All home care aide visits. Inpatient respite care if you need a break and your parent needs overnight care in a facility. Inpatient hospice care if your parent needs to be admitted to a facility for crisis symptom management.
Dietary counseling and spiritual care are covered. Bereavement counseling for your family for thirteen months after your parent's death is covered. Lab work, X-rays, and tests related to managing symptoms are covered. Some therapies might be covered if they serve comfort care—physical therapy for positioning, for example.
The only thing you might pay for is medications if they're unrelated to the terminal diagnosis. If your parent is on a blood pressure medication because they've always had hypertension, and their hospice diagnosis is terminal cancer, Medicare might not cover that blood pressure medication. But the medication related to managing cancer pain, or managing the side effects of cancer, would be covered. It's worth asking your hospice team to clarify.
How you're billed
Medicare pays hospices a flat daily rate for care. The hospice is paid a lump sum per day, regardless of how many visits happen that day. Your parent might have one nurse visit or five. The hospice is paid the same. This is why hospice teams encourage you to call when you have concerns. Extra visits don't cost them additionally, so they have no incentive to limit your access.
You receive no bills. Your parent's out-of-pocket cost is zero. The hospice submits claims to Medicare, gets paid, and that's the transaction. You simply receive care.
If your parent has supplemental insurance (a Medigap plan), some of the costs might be covered there as well, though there's very little cost to cover since Medicare is paying almost everything.
Medicaid coverage
If your parent is on Medicaid instead of Medicare, coverage is different but similarly comprehensive. Medicaid covers hospice in all fifty states. The benefit varies slightly by state,some states are more generous than others,but all states cover the essential elements of hospice care.
In some states, Medicaid covers hospice at home. In some states, it covers hospice primarily in facilities. In some states, it covers both. You'll need to contact your state's Medicaid office or your parent's hospice to understand what's covered specifically in your state.
Medicaid patients in hospice typically pay nothing out of pocket, just like Medicare patients. If your parent has been spending down their assets to qualify for Medicaid, hospice care costs don't further drain those assets.
Some people are eligible for both Medicare and Medicaid, called "dual eligible." In these cases, Medicare is typically the primary payer and Medicaid is secondary. This is good for the patient because coverage is even more comprehensive.
Private insurance
If your parent has private insurance through a former employer or through the individual market, coverage for hospice varies. Some private plans cover hospice comprehensively. Some cover it minimally. Some require that you meet a deductible first or that you pay a percentage of costs.
You'll need to contact your parent's private insurance plan to understand what's covered. Ask specifically: Does your plan cover hospice services? What's the deductible? Is there a copayment per visit? What medications are covered? What equipment is covered? Does your plan require that you use a specific hospice, or can you choose any hospice?
Some people have both Medicare and private supplemental insurance. In these cases, Medicare is primary and private insurance is secondary. The private insurance might cover some of the small amounts that Medicare doesn't cover, if any.
If your parent doesn't have Medicare or Medicaid and their private insurance covers hospice minimally, costs can be significant. Many hospice organizations have financial assistance programs for patients who can't afford care. Ask about sliding scale fees or free care if you're uninsured or underinsured.
What happens if your parent isn't Medicare-eligible
If your parent is younger and hasn't yet reached Medicare age (sixty-five), and doesn't have insurance through an employer or the individual market, hospice might not be accessible. This is a real gap in the system. Some states have programs to help. Some hospices will care for uninsured patients at reduced cost or free.
If your parent is younger and has private insurance, that insurance should cover hospice. But make sure you understand what's covered before you commit to hospice care.
If your parent is a veteran, the Veterans Administration offers hospice and palliative care services at no cost. If your parent has VA benefits, you should explore this before other options.
Veterans and other resources
If your parent served in the military, they're eligible for VA hospice care through the Veterans Health Administration. The VA provides comprehensive hospice services at no cost to eligible veterans. If your parent receives VA benefits for healthcare, ask about their hospice program.
Some employers offer group insurance that includes hospice benefits even after retirement. Check any documents from your parent's previous employers.
Some nonprofits and foundations help pay for hospice care. These are usually limited to specific regions or specific diseases, but they're worth researching if your parent doesn't have insurance.
What you should do now
If your parent is approaching the time when hospice might be needed, ask their doctor whether they're Medicare-eligible. Ask when they became eligible. Ask if Medicare has approved them for hospice benefits, or whether you need to apply.
If your parent has insurance other than Medicare, contact the insurance company and ask about hospice coverage. Understand what's covered and what you might pay.
If your parent doesn't have insurance, ask the hospital social worker or the doctor's office about financial assistance. Many hospitals have programs to help. Many hospices do too.
The financial side of hospice is one area where families can get good news. Coverage is often far better than for other medical care. This allows you to focus on presence instead of on bills. That's a gift. That's one way the system works well.
How To Help Your Elders is an informational resource for families working through aging and elder care. We are not medical professionals, attorneys, or financial advisors. The information provided here is for educational purposes and should not replace professional consultation. Every family's situation is unique, and rules, costs, and availability vary by location and circumstance.