If you use Medicare, you probably feel that it does a pretty good job of covering your medical costs. That’s the case for most people, since the government-run insurance plan covers about 80% of outpatient expenses and even more for inpatient expenses.
However, you may not realize that Medicare does not cover one major expense that might be looming for you or your spouse: long-term care. Often, by the time that people realize this, it’s too late or too expensive to pick up long-term care insurance.
And while people with very low incomes can qualify for Medicaid to help them with long-term care expenses, everyone else is left to privately pay for their assisted living centers and nursing home care.
The long-term care gap
About two-thirds of those eligible for Medicare enroll in Original Medicare, or Medicare Parts A and B, which covers hospital and medical costs. Most people who enroll in Original Medicare also opt for a Medicare Part D plan, which covers prescription drugs.
Another option is to choose a Medicare Advantage plan: These plans, offered by private insurers, offer the same coverage as parts A, B and D, and can also include ancillary benefits that Original Medicare does not provide, such as dental, vision and hearing expenses or gym memberships.
Until recently, however, neither the Original Medicare or Part C offered any coverage for long-term care. That changed last year, when the Centers for Medicare and Medicaid Services (CMS) announced that they would begin allowing Medicare Advantage plans to provide some supplemental long-term care services to their members the following year.
The new coverage options
Starting in 2019, Medicare Advantage plans had the option to build in some supplemental benefits that fall into the realm of home and community-based long-term care.
Some of the new long-term care options include:
- Adult day-care services
- In-home assistance with custodial care or activities of daily living
- Respite care benefits for caregivers
- Home safety modifications like bathroom grab bars, wheelchair ramps, and stair rails
- Non-emergency transportation services so that members can get to their doctor’s appointments
- In-home meal delivery
The goal of these newly allowed benefits is to prevent costly hospitalizations and help chronically ill beneficiaries continue living independently for months or even years beyond what they have been able to do in the past.
Other new benefits
A few other key new benefits were also announced last year:
Better coverage for brand-name drugs: Starting this year, the dreaded “donut hole” for prescription drugs will be eliminated.
When Part D was first introduced in 2006, insurance companies could and did charge members 100% of the cost of their brand name prescription drugs when they reached the coverage gap (or donut hole). The Affordable Care Act changed this and the percentage of the cost that members are responsible for has been slowly falling over the last few years.
This year, members pay no more than 25% of the cost of their brand-name drugs in the gap in 2019.
A new open enrollment period: This year, the Open Enrollment Period from January 1st to March 31st each year has been reinstated.
This allows Medicare beneficiaries enrolled in Medicare Advantage plans to either change from one Medicare Advantage plan to another, or they can disenroll from their Medicare Advantage plan and return to Original Medicare and a standalone Part D drug plan.
So if a beneficiary makes a mistake or finds that they don’t like their plan for any reason, they can make a one-time plan change during this period. It’s a welcome change that may make some beneficiaries feel less hesitant to try an Advantage plan, knowing that they won’t necessarily be locked in.
Beneficiaries should keep in mind, though, that when they return to Original Medicare from an Advantage plan, they may have to answer health questions and go through medical underwriting in order to add that plan.
The future of long-term care
While the new long-term care benefits will appeal to many people, unfortunately existing plans were initially slow to build in the new benefits this year.
This was likely due to limited time to incorporate the new benefits between the time of the CMS announcement and deadline for plan designs to be submitted to Medicare for 2019 year.
However, given the expected popularity of these changes, it is hopeful that more plans will incorporate some of these supplemental benefits in 2020 and beyond.
As costs of healthcare continue to inflate, it’s likely that more and more beneficiaries living on fixed income will begin to gravitate toward Medicare Advantage plans that offer lower premiums.
These potential new benefits and additional window to change their minds about their plan are certain to increase the number of beneficiaries who choose a Medicare Advantage plan as their coverage in the coming years.