As a loved one approaches the end of life, caregivers may find it overwhelming to figure out how to pay for hospice care. The first step is understanding the available coverage for hospice care under Medicare and Medicaid. Knowing the federal and state resources available to you will help lighten your load during this stressful time and help your family prepare financially.
This guide will cover Medicare and Medicaid hospice coverage, the eligibility requirements, and what out-of-pocket costs you may incur. Equipped with this hospice benefit knowledge, you can ensure your loved one receives the high-quality care they deserve, allowing them to comfortably live out their last days.
Does Medicare Cover Hospice?
Medicare-approved hospice programs may cover all costs directly related to pain relief and symptoms associated with a terminal illness. Medicare will cover the following costs for up to six months. However, after six months, patients can continue to receive Medicare-covered hospice care if the hospice doctor recertifies that the individual is still terminally ill.1 Coverage includes the following:
- Treatment from members of the patient’s hospice care team, including hospice doctors, nurse practitioners, and nurses.
- Physical, speech, and occupational therapy services.
- Hospice home health aides and homemaker services.
- All components needed for pain relief and management (including prescriptions).
- Rental or purchase of durable medical equipment.
- Nutritional and dietary guidance.
- Grief and spiritual counseling for the patient and their family.
- Short-term inpatient or respite care services if deemed necessary by the patient’s hospice care team.
- Medical-related hospice care within a skilled nursing facility (excluding room and board costs).
Enrolling in Medicare?: Check out this year’s complete Medicare guide where our experts walk you through how to enroll and answer all your burning Medicare questions.
Hospice Benefits Not Covered Under Medicare
It’s important to know the benefits Medicare will not cover once you initiate hospice care. Coverage does not include the following:
- Life-saving medical treatments to cure the terminal illness.
- Room and board, including long-term residence in the patient’s home, a nursing home, or a hospice facility.
- Any prescription medication to cure or rehabilitate the terminal illness.
- Hospice care outside of the designated hospice provider. The patient’s appointed hospice care team must organize all treatments.
- Outpatient or inpatient hospital care and ambulance transportation. This rule does not apply if the patient’s hospice care team has scheduled care or the care is unrelated to the terminal illness.
Did You Know: Keeping in close contact with your loved one’s hospice care team helps avoid unexpected out-of-pocket costs. When in doubt, speak with a team member to confirm what services are covered.
What Are the Medicare Requirements for Hospice Coverage?
To qualify for Medicare hospice coverage, the individual needs to meet the following requirements:
- The individual must qualify for Medicare coverage.
- The individual must be enrolled in Medicare to use the hospice end-of-life benefit.
- A hospice doctor must diagnose and certify the patient as terminal (meaning they have six months or less to live). This diagnosis must be made during a face-to-face encounter.
- The individual must sign a statement choosing palliative care (comfort care) instead of other life-saving benefits.
- The individual must choose a specific hospice care provider to administer all of their care.
How Much Does Medicare Pay for Hospice?
While Medicare fully covers a large portion of hospice services, including treatment from the hospice care team, occupational, physical, and speech services, and medical equipment, the patient may incur costs for some services:
- Up to a $5 copayment per prescription for outpatient drugs to relieve pain and manage terminal illness-related symptoms.
- Five percent of the Medicare-approved cost for inpatient respite care.
Did You Know: If a prescription is not covered under the patient’s Medicare hospice plan, ask a hospice care team member to inquire if the medication is covered under Medicare Part D. If you or your loved one needs a prescription drug plan, visit our list of our top picks for best Medicare Part D plans.
Does Medicaid Cover Hospice?
Medicaid is a partnership between the federal government and individual states. Medicaid-covered hospice care is optional and varies by state. States that do provide Medicaid-funded hospice benefits must follow federal regulations for basic coverage. This coverage is similar to Medicare and includes providing:
- At least 210 days of hospice care.
- A hospice care team including doctors, nurses, and nurse practitioners.
- Home health aides and homemaker services.
- Rental or purchase of medical appliances and supplies.
- Physical therapy, occupational therapy, and speech-language pathology services.
- Prescriptions for pain relief and management.
- Grievance and counseling services for the hospice patient and their family members.
- Short-term inpatient or respite care services.
Medicaid is state-run, so it’s essential to confirm if your state offers Medicaid-covered hospice care and what benefits are included within the coverage.
Did You Know: Patients can still see their regular physician if the physician is elected to aid in supervising the patient’s hospice care.
What are the Medicaid Requirements for Hospice?
The requirements to qualify for Medicaid hospice care will vary from state to state. If the patient qualifies for Medicaid, they must follow the requirements for Medicaid’s hospice benefits.2 Common requirements include:
- A hospice plan of care must be established before services are provided.
- A hospice physician must certify that the individual is terminally ill.
- The individual must complete a hospice election statement.
- The individual must elect the hospice benefit by completing an election statement.
- A specific hospice provider must be selected and will serve as the individual’s care team.
- The individual must waive all Medicaid services to cure the terminal condition.
The time when someone can begin using Medicaid coverage for hospice services is based on the individual state’s determination of life expectancy. For example, Indiana defines a terminal illness as having a life expectancy of six months or less, while Colorado requires a prognosis of nine months or less.3
What is the Cost of Hospice Care for Patients on Medicaid?
Older adults who qualify for Medicaid-covered hospice care are exempt from copayments, coinsurance, and deductibles. Hospice care, including room and board, is covered under Medicaid whether the individual lives at home or resides in a nursing home, assisted living facility, or rehabilitation center.4 Medicare doesn’t offer hospice coverage for room and board, so this is an excellent benefit.
How Else Can I Pay for Hospice?
If an individual doesn’t qualify for Medicare or Medicaid, or the coverage they have simply isn’t adequate, there may be other ways to pay for hospice care.
|Option||Pros||Cons||Things to consider|
|Private health insurance (HMO, PPO, POS)||Can be employer-sponsored or via individual coverage.||Potential for limited choice of in-network providers and hospitals; out of network providers may not be covered.||Coverage of hospice care and services will vary by plan.|
|Veteran health care||Zero copays; wide range of veteran health care and living options.||Must meet eligibility requirements, including enlistment, duty, and type of discharge.||Must be enrolled in the VA's healthcare system to receive benefits.|
|Out of pocket||Avoids debt if the individual does not qualify for full Medicare or Medicaid coverage.||Personal savings can be drained quickly due to high costs.||Before paying out of pocket, verify your state's Medicare and Medicaid eligibility requirements.|
|Reverse mortgage||No monthly mortgage payment; the individual retains ownership of their home.||Must be 62 years or older to be eligible; costly due to multiple upfront and ongoing fees.||The loan amount depends on the individual's age, interest rates, and the home's value.|
|Grants and donations||Some hospice organizations may offer care at no cost or at a reduced rate based on the individual's ability to pay.5||Not all hospice care facilities have the means to provide low- or no-cost service.||Research local non-profit and community-funded hospice care.6|