As we age, our potential for needing long-term care services increases with the rising occurrences of co-morbidities amassed by the diminishing nutritional dietary habits of our society. So why do we have Medicare and what exactly does it cover in regards to our long-term care needs? Let's start by reviewing the history behind our Medicare and Medicaid programs.
HISTORY OF MEDICARE
Our first national healthcare bill specifically aimed toward coverage of senior citizens and the disabled was first introduced to Congress as "Post-Hospital Care for the Aged" in 1949 by the Vice President Hubert H. Humphrey. It received insufficient support and did not come to pass until Lyndon Johnson occupied the presidential office. However, in the duration before it was signed into law, a bill was passed in 1952 under the Truman administration for guaranteed hospital care for everyone on Social Security. This now paved the way for Medicare to be enacted.
The intent of the Medicare bill was to ensure that senior citizens and the disabled did not suffer from untreated illnesses. The bill evolved and changed over 12 years until July 30, 1965, when the Medicare and Medicaid programs were first initiated into law by President Lyndon B. Johnson. Other presidents before him had endeavored to establish a national health insurance but failed. Prior to the establishment of the Medicare bill, only 50 percent of America's seniors had insurance for hospital care in 1964. During this period, many seniors went untreated for illness and faded away into poverty in our society.
The Medicare bill was established to give hope against this rising issue. By 1965, with the signing of the Medicare bill, access to healthcare for seniors increased by one-third and the rate of poverty decreased significantly. Medicare has made modifications to the bill since it was enacted in 1972 and now includes Americans with disabilities and those suffering with end-stage renal disease.
The Medicare Modernization Act was signed into law by President George W. Bush on December 8, 2003, adding an outpatient prescription drug benefit to the Medicare benefits already in place. Over more recent years, Medicare has extended the life of the Medicare Trust Fund to 2025, launched a concentrated effort to reduce Medicare fraud, waste and abuse, and restore $2 billion to the Trust Fund. Additionally, preventive benefits have been added to Medicare coverage to help prevent and discover diseases at early stages for less problematic treatment.
MEDICARE COVERAGE FOR LONGTERM CARE
According to the U.S. Department of Health and Human Services, 70 percent of people will need some form of long-term care services at some point in their lives. It is also a fact that Medicare does not pay for the majority of at-home long-term care services. Medicare only covers medically necessary care and focuses on acute care for medical conditions and treatments, such as physician visits, medications and hospital stays. It also focuses on short-term services for conditions that are expected to improve.
The key word is "short-term." Medicare was never meant to cover long-term services. Medicare pays for healthcare for individuals age 65 and older, individuals under age 65 with certain disabilities, and other individuals of all ages with end-stage renal disease. Medicare does not pay the major part of long-term care services or personal care for daily activities, such as bathing and dressing or supervision needed for an individual with dementia. Medicare does help pay for short stays at skilled nursing facilities, hospice care or home healthcare if the individual meets the criteria. In order to qualify for skilled nursing facility coverage, an individual must have had a recent hospital stay of at least three days; the person may be admitted to a Medicare-certified nursing facility within 30 days of a prior hospital stay and they must require medically necessary skilled care, such as skills of a nurse, physical therapist, or other types of therapy for a recoverable condition.
An example of a stay such as this would before recovery and rehabilitation related to an acute stroke rather than an individual who had a stroke years prior but didn't fully recover all of their strength. Medicare covers I00 percent of costs in a skilled nursing facility up to 20 days. For days 2 1 through 100, an individual pays their own expenses up to $140 per day (current rate in 2013) and Medicare then pays any balance owed. Beginning day 101 and beyond, an individual is fully responsible for all further expenses.
Medicare covers hospice care if an individual has a terminal illness with a physician indicating that the individual has less than a six month life expectancy. Other coverage includes medications to control symptoms of the illness and for pain relief. If additional information is sought for the specifics of hospice coverage along with detailed Medicare information on all coverage, this can be obtained from the CMS website, via the Medicare & You 2013 guide.
If services are requested in an individual’s home, Medicare will pay services for a limited time when a physician certifies that the services are medically necessary to treat an illness or injury. Several examples of such services include intermittent skilled nursing care for recovery related to surgery with completion of wound care dressing, and rehabilitation type services such as physical therapy, speech therapy and occupational therapy. Medicare will cover durable medical equipment as well, such as wheelchairs and walkers. An individual is responsible for 20 percent of the Medicare approved amount. in summary, the Medicare bill was put into action as a means to assist in paying for short term services to prevent seniors and disabled individuals from refusing to obtain treatment for an acute illness or injury and to assist with the soaring costs and financial burdens of obtaining such care. As stated previously, the Centers for Medicare and Medicaid Services state specifically on their long-term care website that such coverage does not cover all the costs associated with care needed for long-term care services. It is crucial for individuals and their families to plan ahead and wisely choose additional insurance coverage to offset the immense strain that long-term care services can inflict on a senior or disabled individual and their families.
LONG-TERM OPTIONS BEYOND MEDICARE
According to Bill Stubbs, CLU, with Stubbs & Associates, there is no “magic” age when an individual should start considering additional insurance purchases for future long term care financial planning. One option for additional financial coverage is purchasing a Medicare supplement policy also known as Medigap insurance, which is sold by private companies to support paying health care costs that the original Medicare does not cover. such as copayments, deductibles and coinsurance. For additional detailed information on Medigap policies, information can be found on the Medicare website.
The challenge with Medigap insurance is that it generally does not cover longterm care services, private duty nursing, vision or dental care, or necessary items sometimes needed as we age, such as hearing aids and eyeglasses. One option to resolve this dilemma is to consider purchasing a long-term care insurance policy.
According to the interview with Bill Stubbs, there are several types of long-term care insurance. The traditional type of long term care insurance allows for a monthly or annual premium to be paid. This type of policy reimburses for long-term care services, such as skilled nursing home, assisted living care, and home healthcare or custodial services, if benefit eligibility criteria is met. If the policy benefits are never accessed, then the individual loses money in the end. A second type is an endorsement policy added on to modern life insurance or annuity plans. These types of policies are penalty free for withdrawal from the pre death benefits within the policy for services that are necessary.
A third type of policy is also associated with life insurance or annuity. According to Stubbs, this type of policy is becoming more commonplace given the options it provides. For every one dollar an individual pays in to the policy, they receive three to five dollars of long-term care service benefits back when they need the reimbursement. If the individual never needs to utilize this pre-death benefit, or only partially utilizes the value of this “portfolio” insurance, then they can request all the premium money back or a portion that has not been utilized; if all the benefits are not accessed or utilized to full capacity, the remaining financial benefit dollar amount is directed to the beneficiary at the time of death of the individual policyholder.
Those considering long-term care insurance policies need to ask questions before agreeing to purchase a policy. Consumers need to be aware that, like any insurance policy, qualifiers must be met in order to receive certain types of benefits. Paying premiums alone does not entitle a policy holder to receive all the benefits. Many policies have elimination period in which thev must wait to receive benefits for a certain period of time once they are eligible, and many also have maximum benefit periods. Long-term care insurance policies are at times complex for consumers to understand and are not necessarily the solution for everyone, but they can facilitate an easing of the financial burdens upon seniors and their caregivers.
The cost of healthcare is on the rise and our population is aging. Seniors and their families need to develop a long-term financial plan to cover their potential healthcare costs for long-term care services. These plans will prevent an enormous financial burden on themselves and their caregivers. Whatever options are decided. Education about the coverage options and qualifications are necessary before the services are needed.
Ongoing community education and interaction is a necessity between seniors and their caregivers, healthcare providers (including patient advocates), and insurance companies in order to ease rising financial anxiety, struggles with growing older, and worries over not having additional longterm care services in place.
- Written BY KELLI HANSEN, RN, BSN, CMCN, LNC
l. Centers for Medicare & Medicaid Services. (2000, July I2). 35th Anniversary Events. Retrieved from www.cms.gov/AboutCMS/Agencylnformationfllistory/DownloadsfCMS35thAnniversary.pdf.
2. U.S. Department of Health and Human Services. (2013). Long Term Care. Retrieved from http:/flongtermcare.gov
3. The Official U.S. Government Site for Medicare. (2013). What‘s Medicare supplement (Medigap) insurance? Retrieved from www.medicare.gov/supplementotherinsurance/medigap/whatsmedigap.html.