2014 Medicare Long Term Care Update

Ask 10 employees who will pay their elderly parents’ long term care bill, and the answer you will likely hear from 6 or 7 is “Medicare.”  Truth is, Medicare does not pay for most community or home-based long term care, and Medicare pays for no care in a nursing home after day 100. 

Fewer Medicare beneficiaries than ever are likely to see Medicare pay their first 100 days in a nursing home.  Historically, in order to qualify for Medicare payment of a nursing home stay (aka “skilled-nursing facility”), not only is daily skilled care required, but Medicare also requires that the beneficiary first spend at least three consecutive days hospitalized as an inpatient.

NBC Nightly News recently broke the story of patients who are kept in the hospital under ‘observation status’ instead of as an inpatient.  Unbeknownst to them and their family, they are not satisfying Medicare’s inpatient requirement for eventual skilled nursing home coverage.  The takeaway?  When a loved one is receiving care in a hospital, and the next care setting may be a nursing home, ask for the patient’s status: are they categorized under observation status or inpatient status?

The implication of this development can be a consideration in long term care insurance policy design.  Sometimes individuals choose a 90 or 100 day elimination period thinking that Medicare will pay the first 100 days.  While that is sometimes true, the assumption has never been a sure thing.  Now it appears that relying on this assumption is riskier than ever.  

Here are some of the deductibles and copayments NOT covered for Medicare beneficiaries receiving inpatient services, updated for 2014:

HOSPITAL inpatient deductible:  $1,216/benefit period

HOSPITAL daily co-insurance: 

            $0 days 1-60

            $304 days 61-90

            $608/days 91-150



Only covered if daily skilled care is needed, and preceded by a 3-day hospital inpatient stay

            $0 days 1-20

            $152 days 21-100