End of life care can be a touchy subject. Few clients want to think about their mortality, and perhaps even fewer want to put their hard-earned money towards coverage for hospice care, long-term care and medical procedures that may or may not be necessary.
For most Americans, however, it’s a safe bet to plan ahead. The last few months are usually more expensive than the preceding years, and unexpected long-term care events and uncovered medical services can easily wipe out savings and inheritances. 28 percent of the Medicare budget is spent on the last six months of recipients’ lives, according to Kaiser Health News, and the National Bureau of Economic Research found that out-of-pocket expenses average $11,618 during the last year of life. What’s more, the US Department of Health and Human Services estimates that 70 percent of people age 65 and older will receive some form of long-term care, and that the older people are, the more likely they are to need it.
What specific costs should clients consider? “One of the things I try to educate advisors and consumers about hospice and end of life care is that there are two main components,” said Ed Rich of M&O Marketing. “There’s the medical component, typically covered by Medicare and Medicaid, and there’s the room and board, which typically isn’t.” Rich’s rule of thumb is that a yearlong stay in a nursing facility will typically cost about $75,000, and that six months of inpatient hospice will cost a proportional $37,500. Of course, out-of-pocket costs to consumers vary depending on coverage and location.
As for the medical component, determining costs is usually, but not always, a matter of calculating the relevant Medicare premiums and deductibles. Medicare will cover doctor services, physical therapy and other medical costs incurred during a six-month hospice term, for instance, but it won’t pay for room and board or treatments intended to cure the diagnosed illness. In fact, hospice care isn’t covered at all for patients who seek curative treatments in addition to palliative care.