What to do When Medicare Will Not Cover the Costs of a Needed Rehabilitative or Skilled Care Facility

Here is a wake-up call: Medicare may cover costs of a needed rehabilitative or skilled nursing care facility after a hospitalization of at least three nights — but only to a limited extent.

As explained by the Centers for Medicare & Medicaid Services (CMS) in a booklet called Medicare Coverage of Skilled Nursing Facility Care, Medicare may cover 100% of a prescribed rehabilitative/ skilled care facility for the first 20 days after discharge from a hospitalization of at least 3 nights, and then up to the next 80 days at a lesser percent – BUT, this Medicare coverage will stop as soon as the patient no longer needs skilled care and stops making clinical progress in physical therapy.

A basic summary of coverage is also provided in the Official Medicare Handbook, Medicare and You.

What Skilled Care Does Medicare Cover?

For a more detailed understanding of what your regular Medicare policy will cover, Medicare provides an online Search Tool, where you type in the policy ID number listed in the Notes section of your Medicare Summary Notice to find out your coverage, or you can search by your State/ Territory and type(s) of coverage about which you seek information.

The above information pertains to original Medicare. If you have a “Medicare Advantage” plan provided by a private insurance company, CMS advises: “If you have a Medicare Advantage Plan, it must cover the same services as Parts A and B (except hospice care). Contact your plan if you have questions. Or, get information about other Medicare Advantage Plans or Medigap policies available in your area.”

What Will Happen to you when Medicare Runs Out?

This issue faces many seniors and family caregivers — what to do when Medicare coverage of the skilled care facility runs out, but the patient still needs long-term care. As explained in the booklet Medicare Coverage of Skilled Nursing Facility Care (linked above), Medicare does not cover “custodial care” — which is long-term care in a facility or at home in the absence of a continuing need for skilled nursing care.

Here is an extreme scenario (from DelMarvaNow.com, a local Gannett publication in Maryland), which unfortunately is all too common:

“A few weeks ago, my husband, who is 80 and had a stroke, was discharged from the hospital to a nursing home for rehabilitation. The nursing home is now indicating that he is not responding to rehabilitation and Medicare will no longer cover the cost of care. I was told he is going to be discharged home if I do not find a different nursing home able to take him. The nursing home where he is began to send me huge bills for his care. He can’t take care of himself, and I am in no condition to care for him. It seems like I am going to lose everything. What can I do?”

Do You Have Medigap Supplemental Insurance Coverage?

Many people purchase supplementary insurance coverage, commonly referred to as “Medigap” coverage, to fill in where Medicare coverage ends. A Medigap policy may provide extended coverage for skilled care in scenarios like that described above. So, if you are a family caregiver, check first to see if your senior loved one has Medigap supplementary insurance, and if so, check the policy and contact the insurance provider to see what is covered.

If you are a family caregiver, it will be wise to plan in advance, and look into obtaining a Medigap supplementary insurance policy for your senior loved one before a scenario like that above occurs.

If your senior loved one has original Medicare, first read the CMS publication, 2011: Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.

When is the Best Time to Buy a Medigap Policy?. As explained on page 14 of this publication,

“The best time to buy a Medigap policy is during your Medigap open enrollment period. This period lasts for 6 months and begins on the first day of the month in which you’re both 65 or older and enrolled in Medicare Part B. Some states have additional open enrollment periods including those for people under 65. During this period, an insurance company can’t use medical underwriting. This means the insurance company can’t do any of the following because of your health problems:

• Refuse to sell you any Medigap policy it sells
• Make you wait for coverage to start (except as explained below)
• Charge you more for a Medigap policy”

General information on pricing of Medigap policies is available starting on page 17 of the 2011: Choosing a Medigap Policy publication.

For more information, contact your State Health Insurance Assistance Program (SHIP) office. SHIP is a state program that gets money from the Federal government to give free local health insurance counseling to people with Medicare. Medicare provides a search tool to help you find the contact information for your local SHIP office.

Additional information about Medigap insurance, is also available from AARP.

Eligible for Medicaid Assistance?

The desperate scenario quoted earlier above comes from an article by Robert McCaig, “What to do if Medicare will no longer cover costs,” in DelMarvaNow.com, a local Gannett publication for an area in the state of Maryland. In that article, author Robert McCaig provides suggestions about possibly qualifying for Medicaid assistance (after all non-exempt personal assets have been exhausted). His advice, however, is limited to Maryland.

Medicaid is a jointly funded federal and state program of medical assistance for low-income/ low-asset individuals, however, the program is operated separately by each state, and each state sets its own rules.

For specific information about enrolling in Medicaid, eligibility, coverage and services for your State, CMS advises you to contact your local Medicaid office. Here is a searchable Contacts Database, provided by CMS, where you can find the contact information for the local Medicaid office in your State.

Hint: to use this Database efficiently,

  1. Select your State or Territory
  2. After “* Contacts whose Contact Type is” – select “All Contact Types”
  3. Select “Contacts whose Organization Type is,” and thereafter in the scroll-down menu, select “State Medical Assistance Office”
  4. Click on “Show Contacts”
  5. The results will list the State Medical Assistance Office (the state office administering Medicaid) for your state. Click on the link under “Contact Type,” to find the full contact information.

Not financially eligible for Medicaid assistance and No Medigap Coverage?

Once your senior loved one needs “custodial” long-term care — for example, he or she has Alzheimer’s and needs constant assistance with activities of daily living, but may not need daily skilled care — this is where the real hole in coverage and potentially huge financial drain comes about for most Americans. Unless you or your family have financial means to pay for long-term care, this is where you, as a family caregiver, may suffer real financial hardship, in addition to the stress of dealing with your loved one in this condition.

Planning ahead can help. What are the financial options?

Long-Term Care Insurance. Purchasing a long-term care insurance policy in advance from a private insurance company, to help cover the costs of in-home or institutional “custodial care,” can be a wise move.

The Medicare.gov website, under Paying for Long-Term Care, provides an overview on purchasing private long-term care insurance policies, along with links to other helpful sources of information.

You can also contact your State Health Insurance Assistance Program (SHIP) office for information, through the search tool linked above.

See also, AARP’s article, “Buying Long-Term Care Insurance: 9 Things to Consider,” and other resources linked there.

CCRC’s and Other Custodial Care Options. The AARP article, Care and Housing Options for People with Dementia, provides a good introductory overview of some of the custodial care options available for people with dementia.

One of these options is to purchase a life care contract at a Continuing Care Retirement Facility (CCRC). CCRC’s are privately run facilities, regulated by the state where located. Generally, the provide at least three levels of care at the same facility: independent living, assisted living, and skilled care (nursing home) facility. One generally must enter the facility while capable of living independently. You purchase a life-care contract under which you live independently at the facility (in your own independent apartment), but under the terms of the contract, the facility agrees to care for you in the future at the higher levels of care, as and when needed.

CCRC’s can be an excellent financial option. Generally, the total costs of your lifetime care will be substantially less under a life-care contract at a CCRC, than if you wait and have to pay for a skilled care facility at full market rates later.

However, CCRC contracts and facilities vary greatly (within the scope permitted by differing state regulations). You should consult with a lawyer experienced in CCRC contracts, before signing one. In addition, a licensed Geriatric Care Manager or Social Worker in your locality, who is familiar with the different facilities in your vicinity, can provide very helpful advice.

For more information on CCRC’s, see the HelpingYouCare™ resource page on: About Continuing Care Retirement Communities (CCRC’s).

More Information

See the HelpingYouCare™ resource pages on Financial Issues: Planning & Paying For Care, including:

And see, the HelpingYouCare™ resource page on Legal & Financial Matters for Seniors & Family Caregivers – Checklist of Issues.

See also the HelpingYouCare™ resource pages on About Senior Housing and Care Facilities, including:

In addition, see our resource page on Information About Home Health Care.

And see CareHelpFinder™, the HelpingYouCare™ senior-care resource locator tools to help you:

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Copyright © 2011 Care-Help LLC, publisher of HelpingYouCare™.

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