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

For many seniors and their families, the transition to palliative care comes with a mix of emotions. A paramount concern often is understanding how to finance it. It’s worth noting that in 2021, end-of-life care cost Americans $430 billion in 2021, or around 10% of the total amount spent on all health care costs put together. Paying out of pocket for yourself or a loved one can be a tremendous source of stress. But rest assured, planning ahead can significantly alleviate these financial pressures, allowing families to focus more on the emotional and physical well-being of their loved ones. 

This guide is designed to help you understand what your options are for paying for palliative care, whether it’s in-home or at a facility. Covering insights from public to private insurance and highlighting additional resources, we’re dedicated to helping you navigate the financial aspects of comfort care with ease.

Palliative care is used to manage some of the physical and emotional stress that comes with serious chronic illnesses, such as cancer or heart failure. It typically involves using a combination of pain medication and nonmedical therapeutic techniques to manage conditions and improve quality of life. Palliative care can be helpful for almost anybody with a chronic illness, regardless of the stage and prognosis. Conditions people commonly have that lead them to palliative care include:

• Cancer
• Heart disease
• Dementia
• Kidney failure
• Liver disease
• Chronic pain

Understanding the costs of palliative care can be overwhelming, especially when we want the best for our loved ones or ourselves. The financial aspects often differ based on individual needs. Someone requiring minimal support or fewer interventions might find the costs more manageable than another who needs extensive medications and professional assistance. Furthermore, factors such as location—whether in urban or rural settings—and the state you reside in, as well as the complexity of the medical condition, can influence these costs.

Palliative care is all about your comfort, so there’s usually a lot of flexibility built into individual care plans. People who choose palliative care can get it almost anywhere they’re being treated, and it could be as simple as filling a prescription for pain medication at the outpatient pharmacy. More than 72% of inpatient hospitals with 50 or more beds currently offer palliative care for at least some of their patients, a figure that has been rising for decades. Other places where you might get palliative services include:

• Your own home or the home of a family member or close friend
• Adult day health care centers
• An independent or assisted living community
• A nursing home or post-acute rehab facility
• Memory care facilities
• Inpatient hospice centers

Palliative care is commonly confused with hospice care. It’s easy to see why, since there’s a lot of overlap and most hospice patients get at least some palliative care as part of their treatment plans. The main distinction between the two is that hospice care is generally reserved for people with end-stage terminal illnesses, while palliative care is available to people who are working towards remission or complete recovery.

You may be eligible for hospice care if you:

• Have an incurable medical condition
• Are likely within six months of passing away
• Have chosen to stop curative treatments and focus on pain management and comfort care

Palliative care may be part of your treatment plan if you’re in hospice, but you can also choose it if you:

• Have a chronic, but still treatable, illness
• Have a generally positive prognosis that anticipates recovery or more than six months of survival
• Are recovering from surgery or a serious injury that takes time to recover from
• Are an older adult with progressive dementia, such as Alzheimer’s or Parkinson’s disease
• Have a disability that causes pain or other physical distress

Medicare is structured according to the type of care being delivered:

• Part A: Inpatient benefits for people staying overnight in a hospital or other inpatient setting
• Part B: Outpatient benefits for people getting treated at home or from outpatient clinics
• Part C: Medicare Advantage, which combines Parts A and B into a single payment structure, often with extra coverage for vision and dental care
• Part D: Prescription drug coverage for medication dispensed from the pharmacy

Original Medicare pays for palliative care in two ways, depending on whether you’re getting hospice care or seeking treatment in other ways. Participants in Part A pay nothing for hospice care, not even a deductible, though you may have to pay up to a $5 co-pay for outpatient pain and symptom management medication.

To qualify for Medicare hospice or palliative care coverage, you must be:

• A U.S. citizen or legal resident
• Age 65 or over
• Enrolled in Original Medicare or Medicare Advantage

You must also meet all of the following conditions:

• Your primary care and hospice doctors both certify that you are terminally ill and have six months or less to live
• You choose palliative care for comfort instead of trying to cure your illness or prolong your life
• You certify in writing that you’re opting for hospice care instead of treatment-related care

People under age 65 may be able to enroll in Medicare for palliative care if they have end-stage renal disease or have collected Social Security disability benefits for 24 months, or for just one month for people with ALS.

As a rule, Medicaid participants are not required to pay anything above their share of cost for any and all necessary medical treatments. Once a beneficiary meets their annual out-of-pocket maximum, which may be $0 for very low-income participants, all care costs are covered by the program.

Unlike Medicare, Medicaid typically pays for services through a single care plan, rather than breaking coverage up into different parts. As a result, there’s basically no important difference under Medicaid between coverage for inpatient hospice care, at-home comfort care or any other medically necessary service. If you have Medicaid, the program pays a standard rate for any treatment your doctor thinks is necessary for you.

Medicaid benefits cover all medical expenses related to palliative care, provided your doctor indicates they are medically necessary. In order to get Medicaid coverage for hospice or palliative care, beneficiaries must:

• Be enrolled in their state’s Medicaid program
• Have a terminal diagnosis and waive further treatments to cure it or to extend life
• Submit a hospice plan of care that describes the details of how palliative care is to be delivered

Honorably discharged veterans of the United States Armed Forces are generally entitled to medical care under the VA health plan. This includes palliative care as well as hospice and other inpatient services. The VA assigns veterans and their dependents eligibility for services based on a complex set of criteria, which it’s best to discuss with a local Veterans Administration office.

Private insurance policies generally include palliative care as a component of their coverage, though the details of what’s covered vary between providers and individual policies. A specific type of insurance, known as long-term care (LTC), is specifically for the 70% of seniors who may need inpatient, hospice or palliative care at some point.

LTC insurance covers most or all of the costs of residential or at-home care, though there may be limits to what’s covered. Conditions caused or exacerbated by alcoholism, drug use and war injuries are not typically paid for, though pre-existing conditions can be.

If none of these options are working for you or your loved one, you may have to fall back on private sources of payment for palliative care. These generally break down into three categories: Private pay, family contributions and charities.

• Private pay: This is where you pay out of pocket for some or all costs. Given the cost of palliative care, even a short course of treatment can be beyond many people’s ability to manage.
• Family contribution: Friends and family members can help you pay for palliative care, either directly or through a trust. Family members often also provide unpaid care for loved ones with chronic illness.
• Charities: Local and faith-based charities can help with free services or direct financial aid for palliative care. Their aid may be limited or comprehensive, available to the general public or restricted to certain groups. Check with a program worker to find out whether a specific charity can help you pay for palliative care.