Caregiving and Long-Term Care, for a Loved One: Lessons Learned

A financial services professional reports on some of what he's learned from being a caregiver himself.

By Stephen George | February 19, 2020 at 05:22 PM

Costs for long-term care (LTC) can be catastrophic, as can the stress and angst managed when a loved one fails. That loved one might be you, or your client.

If you are hazy on what the difference is between Medicare and Medicaid, or what exactly happens to older people when they’re no longer able to live on their own, then this is something you need to know about.

Certainly, some people have carefully chosen life insurance policies, or annuities designed to help pay for long-term care. Some have stand-alone disability policies that can help, but that can limit out before the need ends. A more recent trend is to attach a long-term care rider to a life insurance policy with combined, “pension benefits” (with loans not taxed as income within IRS compliant policies), and LTC benefits. Premium costs for LTC are competitive, and the policy makes it easier to manage in one place.

For many new clients, the start of real long-term care cost planning will be learning about what Medicare does not cover.

There are three primary types of Medicare coverage: Original Medicare, Medicare Advantage plan coverage, and Medicare supplemental insurance. Sure, there are dual-eligible patients, who have both Medicare and Medicaid, and dual-insured patients, who have both commercial group insurance and Medicare. There are those lucky few that have an employer medical or LTC policy too, but that is not the story for many.

Some clients might even have stand-alone long-term care policies.

This article, however, focuses on patients who simply have Medicare coverage, not Medicaid, and not commercial health insurance.

Medicare and SNF Care Basics

Long-term care insurance (LTCI) policies, and convalescent care policies, cover “custodial care,” or care that helps people with activities of daily life (ADL’s), such as eating, bathing and other ordinary activities of daily living. LTCI coverage triggers when the insured is unable to perform two or more ADL’s after a waiting period of typically 30-60 days.

Medicare Part A, Medicare Advantage and Medicare Supplemental plans (A-N) do not cover custodial care. It pays only for a limited amount (100 days) of skilled nursing facility (SNF) care, and only if the patient is getting better, not if the patient is disabled and not getting better.

Some “home health” and or SNF services are now insured, but nothing close to what it costs to pay for 24 hour custodial care for bed ridden loved ones. Recent HHS actions now cover new services under Medicare like home (strength and balance) rehabilitation, some meals, and certain in home care that is intended to keep patients out of more expensive hospitals.

Know that SNF’s will do everything possible to get the patient out of their 24 hour facilities within two weeks, so it is important to have a plan of who will care for mom, your spouse, or a loved one.

It is important for your clients to understand their insurance, or risk facing very large uninsured claims for skilled nursing facility care.

My 91-year-old, bed-bound mother-in-law is in a SNF, and her care is $12,000 per month. She got to the facility after 12.5 years of care in our home by my saintly wife. Very few people have prepared for the possibility that they can be disabled for many years, and buy long-term care insurance policies to defend against bankruptcy.

For some families with disabled elderly mothers and fathers who can transport themselves to the bathroom, table, and TV room, an assisted living facility (ALF) is an option. ALF costs are around $6,900 per month. Some facilities can cost less, but provide less comfortable surroundings and staff.

Medical-surgical beds and intensive care unit beds are but two of many bed “types” billed by hospitals.

The bed type billed by the hospital can make, or break if Medicare pays for post-hospital SNF charges.

Medicare rules for triggering SNF coverage eligibility are pretty clear, and knowing them can help a patient avoid bankruptcy. One of the Medicare SNF coverage triggers requires an eligible three-day inpatient stay, prescription for SNF “restorative” (not “custodial”) care. There is no “custodial” long-term care insured in any Medicare policy.

In other words: The patient must be getting better.

A qualifying “In-patient” bed stay means a bed type that Medicare accepts, not necessarily what the patient, or the doctor, thinks of as an in-patient bed. Many hospitals have ER beds where people stay overnight, and that do not qualify. At least one “Medicare Advantage” carrier does not require the three-day stay at all, so know what you are buying in your local market. An experienced agent can help.

For eligible patients who have spent enough time as hospital in-patients, Medicare insures up to 100 days of eligible SNF restorative care.

Other insurance arrangements may provide some relief like accident-only, critical illness (cancer, cardiac, transplants), limited medical. etc., plans. Some only have “lump sum” pay out limits, but may get hit with subrogation assessments. Know what you are buying. Talk to an agent.

Any Medicare-eligible person would be wise to know how any available SNF coverage provisions are supposed to work.

Getting the Appropriate Kind of Bed

Hospitals today bill beds by category to maximize reimbursements in the hospital’s best interest, and not necessary the patient.

The most important overnight bed to get defined is the emergency room bed, and the step-up/down beds that ER doctors, or hospitalists, prescribe for “ER observation” or “med-surg qualifying admission.”

A recent ThinkAdvisor article by Margie Barrier detailed a one-line query to help unwary family members manage their parents. Her good advice was to ask, “Is my mother admitted, or just in observation?” Another one liner is, “Doctor, what can I do to be sure the three-day bed you are prescribing here qualifies for Medicare SNF coverage?”

This question is important, because being in observation does not help a patient qualify for Medicare SNF benefits.

Hospitals can have multiple types of step-down beds, such as general observation, in the ER department overnight beds, cardiac observation beds, etc.

It is common to find out, after a patient’s 36-hour stay that the patient was never technically “admitted,” and that Medicare is denying SNF as being medically unnecessary or not insured. That can mean caring for a beloved parent who cannot transport themselves to the bathroom, shower or dinner table. It can also tank your retirement account.

Steps to Take

What if your client is helping a parent who needs hospital care and might then need convalescent care?

In a crisis, your client’s first call should be to ask the ER doctor, or hospitalist, to admit the parent to a standard med-surg bed, so that the three-day medically necessary in-patient qualifying event creates eligibility for SNF “restorative” or “rehabilitatitive” care.

Your client’s next call should be to the hospital billing department, to confirm that the bed prescribed by the ER/hospitalist qualifies for Medicare SNF coverage.

That process will get very real for your client when it’s your client’s mother.

Your client’s third call should be to the carrier operating the Medicare plan, to confirm coverage (deductibles), and coverage limits.

Your client’s fourth call should be to the SNF, assisted living facility, or nursing home, to see if the facility has room to accept patients with Medicare, and or Medicaid. The best one’s have a waiting list, so it behooves you to meet with their admissions people before you need it. Know that they are inundated with people who have no place for mom, and want to unload their challenge onto someone else.

Encourage your clients to scope out the available SNF, assisted living facility and/or long-term care nursing home beds beforehand, to get an idea of costs. Not planning ahead can mean being relegated to a Medicaid home with challenging roommates.

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