Who Pays for Hospice? An Overview of Hospice Care Cost and Payment Options

End-of-life care is a deeply personal and vital journey for older adults, aiming to alleviate physical discomfort, uplift their overall well-being and offer emotional solace to both them and their families. This kind of care also provides families the precious opportunity to be present emotionally, rather than being overwhelmed by the day-to-day practicalities of caregiving. Yet, it’s important to acknowledge that this stage, despite its many benefits, often evokes deep emotions and reflections for seniors and their loved ones. 

This guide aims to alleviate concerns about financing hospice care by providing a comprehensive overview of payment options. It explores solutions such as Medicaid, Medicare and insurance, considering eligibility for each.

Hospice is a unique type of care for those with life-limiting conditions who are nearing the end of their lives. Person-centered hospice care revolves around making an individual more comfortable, managing symptoms and maintaining as high a quality of life as possible. 

Care plans are tailored to each individual’s condition and wishes, and services are designed to support family members as well as the primary care receiver. Typical hospice services include pain management and medication administration, personal care, assistance with daily activities and emotional support. 

Hospice is a suitable care option for those who have a terminal diagnosis and are expected to live fewer than six months. Physicians must certify that hospice care is appropriate before an individual begins specialized care. 

The exact cost of hospice care depends on factors such as the number of care hours needed, the precise services required, the care setting and the location. However, end-of-life care is typically more affordable than other types of senior care.

As an estimate, hospice care averages from $150 per day for care at home to $650 for care in a specialized inpatient facility.  

Seniors can choose to receive hospice care in one of several settings. While many individuals prefer to live the final stage of their lives at home, some also choose to stay in a residential hospice facility. Care environments include:

• Home
• Hospital   
• Hospice Facility  
• Nursing Home
• Assisted Living Facility 

Although they provide similar services, there are distinct differences between hospice care and palliative care. Both provide comfort, symptom relief and pain management for people with serious conditions. Differences include:

• Stage of Illness: Hospice care is for terminally ill individuals who have received a prognosis of six months or less. Palliative care can be used to provide relief at any stage of disease progression.
• Intent of Care and Treatment: Hospice care is designed to provide comfort and care toward the end of life; it doesn’t include any curative or experimental treatments. Palliative care can be used alongside techniques and medications with the hope of curing an illness or delaying disease progression. 

While hospice coverage is an optional benefit within Medicaid, most states choose to provide this essential care for qualifying seniors. Medicaid, a federal health insurance program, offers health care coverage to individuals across all age groups who meet specific criteria.

In addition to standard Medicaid designed for low-income individuals, there are programs specifically tailored to support those in need of nursing home care as well as the elderly, blind, or disabled. Additionally, many states have instituted various waiver programs to further support their residents. 

Medicaid will generally pay for wide-ranging services, including home and nursing care, counseling, facility room and board and doctor services. This comprehensive coverage ensures that beneficiaries can access essential care without facing overwhelming financial burdens. 

For Medicaid to cover hospice care, most states require:

• An individual to sign, saying they choose hospice care rather than regular Medicaid benefits.
• A doctor to certify that the individual has a life-limiting condition and may not live over six months.

Seniors can learn more at Medicaid.gov, via their state’s Medicaid program or from their local Area Agency on Aging or Aging and Disability Resource Center.

Yes, Medicare Part A may cover hospice care for qualifying individuals. Medicare is the federal health insurance program designed primarily for people aged 65 and older, as well as individuals with disabilities. It comprises several main components: A, B, and D. Generally, those enrolled in Medicare have accumulated sufficient credits from their own (or their spouse’s) payroll taxes during their working years.

Under Part A, Medicare covers an extensive range of hospice care services, whether provided at home—including in assisted living and skilled nursing facilities—or in a Medicare-approved hospice facility.

Some services include prescriptions drugs, spiritual support, nursing care and medical supplies and equipment. However, it seldom covers bed and board costs of inpatient settings. It’s important to note that there are duration limits on how long individuals can receive hospice care.

To qualify for hospice care through Medicare, seniors must already be enrolled in Medicare Part A. Other eligibility criteria include:

• Physician certification that an individual has a terminal diagnosis and is not expected to live more than six months.
• The individual’s signature to accept hospice care rather than other Medicare-covered treatments.
• The individual’s agreement to receive hospice care rather than curative solutions.

Further information can be obtained from Medicare.gov or from an individual’s Medigap provider.

Both Veterans Affairs (VA) and TRICARE benefits cover hospice care for qualifying individuals. This ensures that veterans and military service members, as well as their families, receive the compassionate end-of-life care they deserve. 

Because hospice care is included in the VHA Standard Medical Benefits Package, all enrolled veterans qualify for hospice care if they fulfill the medical need criteria of having a terminal diagnosis and a life expectation of no more than six months.

To qualify for TRICARE coverage for hospice care, a doctor must order such care and the recipient must sign a statement indicating that they choose hospice care over other treatments.

Most private health insurance policies cover end-of-life care. Plans often cover all costs associated with hospice care for those who meet certain requirements. Seniors should contact their brokers to find out what their private policies cover.

Individuals may also sign up for various forms of long-term care insurance. Hospice care isn’t considered a type of long-term care. However, some policies may include limited hospice provisions. Individuals should contact their providers to find out what exactly is covered.

Although many seniors qualify for funding for hospice care, the above options may not apply to some individuals. In such cases, seniors must source their care costs from other places. Options include private pay, whereby they use savings or income to pay for care, financial help from family members and charitable assistance.