Hospice & Palliative Care Costs

Palliative care is typically covered by health insurance, although some individuals may need to work with financial assistance programs or other alternatives if they are uninsured and unable to afford the cost of care. When palliative care is covered by insurance, the extent of coverage generally varies based on a number of factors outlined in the insurance policy. Medicaid and Medicare also cover palliative care for patients if the visits are attended by an advanced practice nurse or physician. 

While health insurance covers palliative care, that coverage may have limitations. These limitations can include which services are covered, how much of the cost is covered, and where services can be performed. There may also be limitations on coverage for treatments and medications. Since palliative care teams are typically interdisciplinary, applicable coverage may depend on who provided the service. Some insurance plans don’t include coverage for palliative care at all, so it is important to review your plan carefully and contact the insurer with any questions or concerns. 

For individuals who do not have insurance coverage or need additional financial support, alternative arrangements often need to be made. This can mean seeking help from a financial assistance program or a charity, fundraising, or contacting foundations and nonprofit organizations for grants and similar funding. Some individuals use savings or retirement funds to pay for palliative care, but these funds can be quickly exhausted as more treatments or interventions become necessary.

Although who pays for palliative care can depend on a number of factors, such as insurance coverage and financial circumstances, there are usually resources available to ensure patients and their families are able to access necessary care. It is incredibly important for individuals to explore their options and plan how they will finance their care long before it is actually needed. Additionally, ongoing communication with healthcare providers, palliative care teams, and social workers can be paramount in ensuring that financial concerns are addressed promptly when the need for palliative care is imminent. 

Sources

“How to Pay for Palliative Care with Medicare or Private Insurance”. VITAS Healthcare. https://www.vitas.com/hospice-and-palliative-care-basics/about-palliative-care/who-pays-for-palliative-care 

“Who Pays for Palliative Care? Your Questions Answered”. A Place for Mom. https://www.aplaceformom.com/caregiver-resources/articles/insurance-covers-palliative-care

According to the National Hospice and Palliative Care Organization, hospice is an optional Medicaid benefit under state Medicaid plans. At this time, benefits are, by law, closely matched with those provided by Medicare. However, due to policy decisions on the national level, many states are now scrutinizing how Medicaid dollars are spent. Thus, Medicaid hospice benefits may or may not be available where you live. Visit this page from the Kaiser Family Foundation to learn more about what’s available in your state. 

Remember, too, that many disabled persons and people over the age of 65 are eligible for both Medicare and Medicaid (“dual-eligible”). When this is the case, and a person on hospice resides in a nursing home, Medicaid typically pays the cost of room and board, while Medicare pays for hospice care. In other situations, Medicaid may pay for some or all of the copayments for medication or respite care. 

If your state offers a Medicaid hospice benefit, the eligibility requirements are the same as those for Medicare. That is, you must sign a statement agreeing to forego curative treatment for your underlying disease or related condition (unless you or the patient are under 21) and a physician must certify that you are terminally ill and have six months or fewer to live. 

Both Medicare and Medicaid cover hospice services at a fixed per-diem rate based on the level of care provided and where it takes place. The designated reimbursement categories are as follows:

• Routine Home Care (RHC) — care provided by members of the hospice team. The reimbursement for RHC is higher for days 1–60 and decreases from day 61 on. 
• Continuous Home Care (CHC) — care provided during a crisis, usually by a nurse
• Inpatient Respite Care (IRC) — care provided in a hospital or nursing home to give family caregivers short-term relief
• General Inpatient Care (GIC) — care in a hospital for relief of pain or other symptoms that cannot be controlled in another setting
• Service Intensity Add-on — a higher level of care provided during the last seven days of life. The care must be provided by a registered nurse or a social worker who visits the patient or family in their home. 

Reimbursement rates for hospice care change annually. They are published by the Centers for Medicare and Medicaid Services in September and go into effect Oct. 1 for the following fiscal year. To learn more about hospice reimbursement rates for 2025, see this document from CMS. 

Sources

“Fiscal Year (FY) 2025 Hospice Payment Rate Update Final Rule (CMS-1810-F)”. Centers for Medicare & Medicaid Services. https://www.cms.gov/newsroom/fact-sheets/fiscal-year-fy-2025-hospice-payment-rate-update-final-rule-cms-1810-f 

“Hospice Benefits”. Centers for Medicare & Medicaid Services. https://www.medicaid.gov/medicaid/benefits/hospice-benefits 

“Medicaid Benefits: Hospice Care”. KFF. https://www.kff.org/medicaid/state-indicator/hospice-care/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22desc%22%7D

According to Vitas Healthcare, Medicare pays for 100% of hospice care provided in the U.S. Most private insurers and HMOs also offer a hospice benefit, but may not offer the same level of service that Medicare and Medicaid provide. If you do not have insurance and are not eligible for Medicaid or Medicare, you will need to pay for hospice yourself. This is very unusual, however, since almost everyone who has a terminal illness will qualify for either Medicare, Medicaid or both.

Medicare is required to pay for all necessary services for terminally ill patients who are eligible for Medicare Part A (the Medicare hospital benefit), including hospice care. This is true even if the patient is enrolled in a Medicare Advantage Plan (Medicare Part C). However, before a person can be enrolled in hospice, the following conditions must be met:

• A doctor and the hospice medical director must certify that the person is terminally ill and has six months or fewer to live.
• The person or their legal guardian must sign a statement choosing hospice care instead of other Medicare-covered services to treat the terminal illness (for example, cancer chemotherapy or other curative care). (Note: This does not apply to beneficiaries who are under 21 years old.)
• Care must be provided by a Medicare-approved hospice provider.

As a general rule, Medicare will pay all of the costs for the following services as long as they are deemed medically necessary by the patient’s physician or hospice team, according to Medicare.gov:

• Doctor services
• Nursing care
• Medical equipment (like wheelchairs or walkers)
• Medical supplies (like bandages and catheters)
• Prescription drugs for symptom control or pain relief (a small copayment of no more than $5 may be required)
• Hospice aide and homemaker services
• Physical therapy 
• Occupational therapy 
• Speech-language pathology 
• Social work services
• Dietary counseling
• Grief and loss counseling for you and your family
• Short-term inpatient care (for pain and symptom management)
• Short-term respite care in a hospital or nursing home so a family caregiver can take a break (you may need to pay 5% of the Medicare approved amount for this stay)
• Any other Medicare-covered services needed to manage your pain and other symptoms related to your terminal illness and related conditions

With few exceptions, Medicare does not cover care aimed at curing a patient’s underlying illness (for example, chemotherapy for cancer) once they are enrolled in hospice. Additionally, it will not cover services from a hospice provider other than the hospice in which the patient is enrolled. It will, however, cover medical care provided by the patient’s primary care physician if that is the practitioner the person chooses to supervise their care. 

Sources

“How to Pay for Hospice Care (Medicare and Other Options)”. VITAS Healthcare. https://www.vitas.com/hospice-and-palliative-care-basics/paying-for-hospice/who-pays-for-hospice/