Hospice care is a specialized form of palliative care focused on providing comfort, symptom management, and emotional support for individuals with a terminal illness. This care shifts the focus from curative treatments to maximizing the quality of life during the final months. Medicare Advantage (MA) Plans are private insurance alternatives that contract with the federal government to provide Medicare Part A and Part B benefits. The relationship between this comprehensive end-of-life benefit and private MA plans is often confusing for beneficiaries and their families. Clarifying the specific mechanisms of this coverage is necessary to ensure patients receive coordinated care without financial surprise.
How Hospice Coverage is Managed by Medicare
The fundamental rule governing hospice coverage for MA enrollees is the “hospice carve-out,” meaning the benefit is excluded from the Medicare Advantage plan’s responsibility. When a beneficiary elects the Medicare Hospice Benefit, coverage for the terminal illness and all related conditions automatically reverts to Original Medicare, specifically Medicare Part A, under the fee-for-service system. The MA organization must permit this transition without imposing penalties or restrictions on the patient’s choice of a Medicare-certified hospice provider.
Original Medicare becomes the primary payer for the hospice provider’s services. The MA plan is temporarily relieved of the financial risk for the care related to the terminal diagnosis, and the government’s payment to the MA plan is adjusted accordingly. The patient remains enrolled in their MA plan, but the payment source for hospice services shifts to the traditional Medicare system for the duration of the hospice election.
Services Included in the Hospice Benefit
Once the hospice benefit is elected, Original Medicare covers a comprehensive, interdisciplinary set of services focused entirely on palliative care for the terminal illness and related conditions. This includes physician and nursing services provided by the hospice team, which are available 24 hours a day. Pain management and symptom control are central to the benefit, covering necessary drugs, medical supplies, and durable medical equipment, such as hospital beds or wheelchairs, that are related to the terminal diagnosis.
The benefit also provides holistic support services:
- Hospice aide and homemaker services to assist with personal care and daily activities.
- Physical, occupational, and speech therapy are covered if they are intended to manage symptoms or maintain the patient’s ability to function.
- Spiritual and dietary counseling, as well as grief and bereavement counseling for both the patient and the family.
The Continued Role of Your Medicare Advantage Plan
Despite the coverage shift for the terminal illness, the Medicare Advantage plan maintains a significant role for all medical services deemed unrelated to the hospice diagnosis. This creates a situation of dual coverage. For example, if a patient is receiving hospice care for a terminal cancer diagnosis but then breaks a bone or needs a routine vision check, the MA plan is responsible for covering the treatment for these unrelated needs.
The MA plan’s network and cost-sharing rules will apply for these unrelated services, just as they did before the hospice election. It is important for beneficiaries to clarify with their providers whether a service is related or unrelated to the terminal illness, as this determines which payer, Original Medicare or the MA plan, is responsible. Furthermore, the MA plan continues to manage the patient’s prescription drug coverage through its embedded Part D benefit. This includes medications for conditions unrelated to the hospice diagnosis, while the hospice provider covers comfort medications related to the terminal illness.
Patient Financial Responsibility
The Medicare Hospice Benefit is designed to minimize the patient’s out-of-pocket costs. For the majority of services covered under the benefit, including nursing care, medical equipment, and supplies, the patient pays nothing. This comprehensive coverage helps relieve the financial burden during a challenging time.
There are two areas where a small financial responsibility exists for hospice-related services. The patient may owe a copayment for outpatient prescription drugs used for pain and symptom management, which does not exceed $5 per prescription. Additionally, if the patient requires short-term inpatient respite care—designed to give the primary caregiver a break—a coinsurance of 5% of the Medicare-approved amount is applicable for each day of care. Deductibles and copayments for services unrelated to the terminal illness continue to be governed by the cost-sharing structure of the patient’s active Medicare Advantage plan.