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Navigating Health Insurance for End-of-Life Care

By: Serena Tanner • Edited by: Katelynne Shepard • Subject Matter Expert Reviewed by: Sarah-Jane Williams, LL.B(Hons) • 13 cited sources • Updated Oct 29, 2024

Whether you’re getting your affairs in order preemptively or navigating the end-of-life care process in a time of need, the cost of care can feel overwhelming. However, resources are available to help bring your out-of-pocket costs down to more affordable levels. This guide outlines health insurance for end-of-life care and other resources available.

Key Takeaways

• End-of-life care is costly but necessary in many cases.
• Insurance coverage can assist in financing most or all costs associated with end-of-life care.
• Certain charitable programs and community resources can help cover costs.

How Does Health Insurance Help Pay for End-of-Life Care?

End-of-life care is critical to help terminally ill patients remain comfortable in their final days. It’s often defined as someone who has a life expectancy of 6 months or less, and it provides physical, mental, emotional, and spiritual care during the process. It can be quite expensive, averaging $67,192 in 2022, but the exact amount can vary based on the length of time spent in hospice and the care required^[1]. 

Health insurance plays a key role in financing end-of-life care. In some cases, it can cover most, or even all, of your loved one’s care.

Financing End-of-Life Care Through Your Insurance Coverage

Depending on the type of health insurance coverage, all of your care may be covered. Most care is paid for through Medicare, Medicaid, and private insurance plans, but other options also exist. A complete understanding of these options is vital to ensure you choose the best coverage for what you want and need. 

Medicare

If you have Medicare Part A and your doctor certifies that you are terminally ill, you qualify for hospice care. To receive this benefit, you must accept palliative care instead of treatments designed to cure your illness. It covers medical care, supplies, and certain home healthcare services to help you manage your pain and symptoms as recommended by your hospice team.

Does Medicare Cover Hospice or Palliative Care?

Yes, Medicare Part A covers all hospice and palliative care. There’s a $5 copayment for outpatient prescription drugs^[2].

Medicaid

Medicaid provides comprehensive healthcare coverage for low-income or medically needy individuals^[3]. To qualify for hospice care through Medicaid, the individual must acknowledge that they can’t undergo any treatment intended as a cure. However, they can change their mind after the fact and resume that waived care. 

Does Medicaid Cover Hospice or Palliative Care?

Yes, Medicaid offers hospice benefits, which may include routine home care, continuous home care, inpatient respite home care, or general inpatient care^[4]. There is also a potential service intensity add-on—to increase the frequency of hospice visits—when specific requirements are met, including: 

• The days of this type of care occur during the last 7 days of the individual’s life.
• The service is provided by an RN or a social worker for between 15 minutes and 4 hours.
• The service isn’t provided over the phone.

Life Insurance

Life insurance doesn’t directly cover the cost of care but can be leveraged to fund it. Universal and whole life policies are permanent life insurance plans that accrue cash value. You may borrow against the cash value of the policy to cover costs.

Does Life Insurance Cover Hospice or Palliative Care?

Not directly. However, you may be able to get a long-term care rider, which can cover the cost of care^[5].

Alternatively, you may be able to get a viatical settlement, which allows you to sell your life insurance policy for a lump sum now to use to cover costs. Typically, you receive a portion of the face value of the policy. The purchaser covers the cost of the premium and is the beneficiary for the entire policy when you pass away^[6].

Private Health Insurance

Private health insurance may include employer-sponsored plans or private coverage purchased outside of the workplace. The exact terms of coverage, premiums, copays, and deductibles vary based on the policy^[7].

Does Private Health Insurance Cover Hospice or Palliative Care?

Most health insurance plans offer hospice benefits, but they may require copays to receive care. The exact coverage and services may differ from plan to plan as well^[8]. If you want to find out whether your private coverage covers hospice care, it may be best to reach out to your insurer privately or review the terms of your plan.

Long-Term Care Insurance

Long-term care insurance works like an auto insurance policy. You pay for the possibility of requiring long-term care. Generally, the sooner you purchase the policy, the more affordable it is^[9].

Does Long-Term Care Insurance Cover Hospice or Palliative Care?

This is policy dependent. Some include hospice or nursing home care coverage^[10]. As with private health insurance, it may be best to contact your insurer or read the terms of your plan to discover whether or not hospice care is covered. 

Veterans Affairs (VA) Benefits

Elderly veterans may qualify for VA benefits, which can assist with long-term care. The Aid and Attendance program is a monthly pension provided for qualifying individuals who require assistance with activities of daily living, are bedridden, are a patient in a nursing home, or have limited vision. Additionally, the Housebound increase to the monthly pension further compensates individuals who are confined to their homes due to disability^[11]. These additional pensions can help cover the cost of hospice.

Do Veterans Affairs Benefits Cover Hospice or Palliative Care?

Yes, enrolled veterans qualify for hospice care at no cost if they meet eligibility requirements^[12]. VA benefits may cover the cost of services that relieve pain and manage symptoms, as well as the cost of grief support for your surviving loved ones. 

The Benefits of Planning Ahead With Advance Care Planning

While planning for the cost of end-of-life care, it can help to discuss advance care planning. This involves determining what you’d like your loved ones to decide about your end-of-life care if you’re unable to communicate. It’s typically done by creating a legal document known as an advance directive.

This planning may include when you’d like to have a do-not-resuscitate (DNR) order placed or whether you want life-sustaining treatment performed^[13]. By making your wishes known in advance, you simplify the end-of-life decision-making process for your loved ones. 

Start planning for end-of-life care as early as possible. You want your loved ones to know which type of care you prefer and what would make you most comfortable. You want your experience to be as desirable as possible.

Jennifer Wills, Former Licensed Financial Coach

Managing Out-of-Pocket Costs Not Covered by Insurance

In many cases, you will still incur some out-of-pocket expenses for your end-of-life care. Several resources can help mitigate the financial burden, such as ensuring you have an ironclad permanent life insurance policy you can use to help cover expenses. 

Alternatively, you may be able to explore community resources through your Area Agency on Aging to gain access to low-cost or no-cost home healthcare. Charitable programs and other financial assistance options can also help offset some of the cost.

Financial Planning Now Can Make Costs More Affordable Later

While costs can make end-of-life care seem impossible financially, you can have the resources available to navigate these difficult decisions. It may help to seek professional guidance from financial advisors and healthcare providers to assist with the planning process.

Written by Serena Tanner

Serena Tanner attended the University of Washington, where she earned a degree in philosophy after many detours delving into human rights, law, psychology, and social work. Health and holistic wellness topics continue to hold a special place in her heart. When she's not reading or writing, she can be found exploring the Pacific Northwest with her two children and dogs.

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Edited by Katelynne Shepard

Katelynne Shepard is a writer, editor and SME who is proficient at crafting and reviewing content. She has been a full-time copywriter and editor since 2011 and has written content for Fortune 500 companies, independent law firms, indie publishers, small-business owners and mainstream websites. She specializes in parenting, lifestyle, family law, personal injury, criminal law, immigration law, astrology, personal finance, education and health care. In addition to thousands of e-commerce product and category descriptions, Verle's work includes SEO blogs, social media posts and long-form informational articles.

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Subject Matter Expert Sarah-Jane Williams, LL.B(Hons)

Sarah-Jane Williams is a seasoned writer with a robust legal background, holding an LL.B (Hons) Bachelor of Laws and a Bar Training Course certification with a 'Very Competent' grade. She was called to the Bar at Lincoln's Inn. Her expertise as a legal SME is complemented by her diverse writing portfolio covering law, senior care, culture, and travel. With over a decade of writing experience, Sarah-Jane's work spans a wide range of subjects from engineering and health to pet care and spiritualism. Her global perspective is enriched by extensive travel and residences across four continents, enhancing her cultural insights and intercultural communication skills. Sarah-Jane's multifaceted background, including roles in housing, research, and advisory capacities, adds depth to her writing, making her a versatile contributor to any niche.