Medicare Coverage of Serious Illness and End-of-Life Care

Medicare provides coverage for the populations described below, long before serious illness or end-of-life issues arise. However, the program you have chosen may or may not work so well for you when dealing with serious illness. It is important to understand what the various Medicare programs are and how they would work in your particular circumstance. To help you sort out what is the best choice for you, below we have described the various programs along with their pros and cons, as well as issues you should look out for when making your choices.

Medicare is a federally funded insurance program that provides health coverage if you are 65 and older, or under 65 and have a disability. Medicare coverage is available regardless of your income and includes a defined hospice benefit. Medicare Advantage programs are all-in-one programs similar to managed care, which may or may not include hospice services. Programs of All-inclusive Care for the Elderly (PACE) is a Medicare and Medicaid program that helps people meet their healthcare needs in the community instead of by going to a nursing home or other care facility. Benefits vary between programs and states, so it is wise to understand what is available to you.

Medicare is for:

• People who are 65 or older
• Certain younger people with disabilities
• People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)

Five important facts about Medicare:

1. Some people get Medicare automatically, and some have to sign up. You may have to sign up if you are 65 (or almost 65) and not getting Social Security.
2. There are certain times of the year when you can sign up or change how you get your coverage.
3. If you sign up for Medicare Part B when you’re first eligible, you can avoid a penalty.
4. You can choose how you get your Medicare coverage.
5. You may be able to get help with your Medicare costs.

What are the parts of Medicare?

The different parts of Medicare help cover specific services:

• Medicare Part A (Hospital Insurance)
  Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
• Medicare Part B (Medical Insurance)
  Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
• Medicare Part C (also known as Medicare Advantage)
• Medicare Part D (prescription drug coverage)
  Medicare Part D helps cover the cost of prescription drugs (including many recommended shots or vaccines).

With Medicare, you have options as to how you get your coverage. There are two main ways and one supplement:

• Original Medicare: Original Medicare pays for most but not all of the cost for covered healthcare services and supplies.
• Medicare Advantage: Medicare Advantage (MA) is an “all in one” alternative to Original Medicare. These “bundled” plans include Part A, Part B, and usually Part D. MA is subject to regulation by CMS and Medicare pays a flat fee for each patient enrolled. Fees are adjusted based on severity of illness.
• Medicare Supplemental Insurance (aka Medigap plans): These plans cover some of the deductibles, co-insurance, and co-pays of original Medicare. CMS offers a site to find and compare these plans.

What is Medicare Advantage and what does it cover?

Medicare Advantage plans are often offered by for-profit entities, usually insurance plans such as United HealthCare, Humana, and Cigna. Nonprofit entities, such as Kaiser Permanente and Blue Cross/Blue Shield, also offer Medicare Advantage plans.

Medicare Advantage plans function as managed healthcare plans: they limit the network of doctors you may see, require a referral to see a specialist, and require preauthorization for certain services. They are appealing in that plans often offer dental and optical services, as well as gym memberships as part of the plan at no cost to the enrollee. Sometimes they offer to pay all or part of the Medicare Part B premium that is deducted from Social Security checks. This is often marketed as that the plan ‘will increase your Social Security’.

Medicare Advantage is growing in popularity. In 2022, about 45% of Medicare recipients enrolled in these plans, and these plans are heavily marketed. However, they have come under Federal scrutiny for misleading marketing practices.

They can and do change the benefits, rules, and network of providers on a yearly basis. The companies make a profit on the difference between what CMS pays them and the cost of your care.

In general, enrollees are more satisfied with nonprofit Medicare Advantage plans than for profit plans.

What is the difference between Original Medicare and Medicare Advantage?

A major difference between Original Medicare and Medicare Advantage is that Medicare Advantage is a pay-as-you-go system.

With Original Medicare and supplemental Medicare insurance, you pay the bulk of your major medical costs upfront through monthly insurance premiums. Doing so lets you budget your healthcare costs.

When you have Medicare Advantage, you pay most of your healthcare costs when you use services after you pay your monthly Medicare Part B premium (which may be partially or completely refunded by the Medicare Advantage plan), and an additional premium for the plan (if any). This means:

• If you see your primary care doctor for an issue, you pay a copay.
• If your doctor refers you to a specialist, you pay another copay.
• If your specialist orders lab tests or diagnostic tests, you pay a copay for each of those as well.

Currently, the maximum out-of-pocket expense is set at 7,500 dollars per year.

For this reason, it is very difficult to budget healthcare costs. This is one of the primary disadvantages of Medicare Advantage plans.

It is important to remember that:

1. Medicare Advantage plans are not free (even those with a zero-dollar premium).
2. If you enroll in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
3. If your annual income is above a certain amount, you may pay an Income Related Adjusted Amount (IRMAA) based on your IRS-adjusted gross income from two years ago.
4. Medicare premiums adjust annually.
5. In addition to the monthly premiums, you will pay the deductibles, copayments, and coinsurance outlined in your plan’s summary of benefits.

Examine the fine print of a Medicare Advantage plan carefully to be sure it will meet your needs, not just when you are relatively healthy, but also if you become ill.

Learn more about Medicare coverage at Medicare.gov.

Does Medicare cover hospice?

Original Medicare has covered hospice services since 1982. Detailed information is available on the CMS website in both English and Spanish.

Medicare will also pay for a hospice physician to consult with terminally-ill patients who are not yet receiving hospice care. The consult, which could occur in a hospital, nursing home, other facility, or at home, may include a pain assessment as well as counseling on care options and advance care planning.

One of the most important aspects of the hospice benefit is its coverage of medication related to the terminal illness, which is covered at no more than a five dollar copay. This alone can save a family a huge amount of money, since pain medication is extremely expensive.

Hospice benefits are available to people enrolled in Medicare Advantage plans, and some Medicare Advantage plans now include hospice services. Check with the plan provider to see if hospice services are provided.

Does Medicare cover palliative care?

There is no standardized program for palliative care as there is for hospice care.

Original Medicare will pay the usual benefits and some Medicare Advantage plans may have a palliative care program. Check with your doctor to see what is available. (Source: Get Palliative Care)

Can Medicare help me with the cost of my medical treatments and prescriptions?

Medicare has a number of programs to help with costs; visit their website to learn more.

What is PACE?

Programs of All-inclusive Care for the Elderly (PACE) is a Medicare and Medicaid program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility. With PACE, you have a team of healthcare professionals working with you and your family. You can have either Medicare or Medicaid, or both, to join PACE. PACE is only available in some states that offer PACE under Medicaid. Visit the PACE website to see if there is a PACE program in your area.

Medicare can provide some help when receiving care not at home, but it does have some guidelines and constraints. Learn more in our Finding Care Outside of the Home section.