Avoiding Surprises: Which Services are Covered by Medicare for Your Aging Parent with Alzheimer's?

Even before the call from our new president and congress went out that we need to overhaul not only Medicare, but our entire health care program—both of which are topics for another discussion—there were some very nasty surprises for many families, regarding the costs of caring for an Alzheimer's patient and who will bear those costs.

Planning Ahead for Mom Was a Financial Blessing

In a previous article I talked about the challenge of having to basically force Mom into investing in a long-term care insurance policy. I didn't truly appreciate the full impact of decision until after Mom moved into the assisted living facility where she now resides.

Because I'm a constant visitor at Mom's apartment, I've had the chance to meet many of the 100 residents who also live there. I've also learned of the tragic financial stories that some of them faced when they realized that they were looking at running out of money, and Medicare was not going to be the safety net they expected. It's sad to see that a basic misunderstanding of the benefits of the Medicare program can have such devastating results not only for seniors, but also for their unsuspecting families who eventually bear the cost burden.

Understanding What Medicare Pays for Is Critical

Two of the reasons that our family wasn't impacted by the Medicare surprise are because my wife has been in private practice as a geriatric care manager for about 13 years, and I've been broadcasting, consulting and writing about seniors and aging for almost 10 years. Therefore, we are both required to know the shortcomings that exist in the Medicare program. But that is certainly not the case for most Americans. Too many boomers and seniors believe that once they are eligible for Medicare, their health care costs will be well taken care of, particularly if they have supplemental coverage to pay for what Medicare does not cover. Unfortunately, that's not accurate, so a very basic course—Medicare 101—may be helpful. Please keep in mind, this short article is by no means meant to fully explain Medicare, but it may help you protect yourself from some nasty surprises.

Medicare Part A: Hospital Insurance

Medicare Part A pays for inpatient hospital care, hospice care, a set number of days in a skilled nursing facility, and a limited amount of home health care. For each benefit period (that's every time you're admitted into the hospital) Medicare will pay all covered costs, but only after you, your supplemental insurance or your Medicare Advantage plan pays the Medicare Part A deductible, which is currently $1,068 for 2009. However, there are some financially painful surprises if your hospital stay exceeds 60 days, as your out-of-pocket expenses will increase dramatically.

Medicare Part B: Outpatient Insurance

In 2009, Medicare Part B costs $96.40 per month, which is either billed to you directly if you're not on Social Security, or is automatically deducted from your monthly Social Security benefit. If you have a Medicare Advantage Plan, your carrier is paid that monthly amount by the federal government as part of their arrangement to control medical costs. Part B covers eligible physician services, outpatient hospital services, certain home health services, and durable medical equipment such as oxygen generators and walkers. The 2009 deductible is $135 for the year, but you also pay 20 percent of the Medicare-approved amount for services after you meet the $135 deductible, unless you have supplemental coverage (also called Medigap insurance) or if you are a member of a Medicare Advantage Plan (previously called an HMO) that offers gap coverage. Not all plans do.

So What's the Surprise from Medicare?

In the very brief and basic explanation of Medicare above, there is no mention of custodial or long-term care coverage, either in-home or in a facility, and that's usually the biggest shock that Medicare has in store for families of seniors who are in need of in-home assistance of several hours a day or more. It's even more devastating if assisted living or long-term skilled nursing is required. Remember, Medicaid is a welfare-based program that pays for nursing home care, but Medicare does not pay for long-term or custodial care, nor does it cover all necessary treatment services.

Why Knowing This Matters to Family Caregivers

In Mom's case, she was originally on a managed Medicare Advantage plan that paid all her bills and deductibles—or so we thought. I discovered that under many plans, not only must you go through the primary physician to get permission to see a specialist, but also in some cases, the fees for seeing a specialist, at least in my experience with Mom, weren't covered by her plan. Most of the neurological testing we needed to get a definitive diagnosis of Mom's Alzheimer's were not covered under her Medicare Advantage plan. How's that for another surprise from the people who bring you managed care? So we paid out of pocket for all of her tests, and wondered what her financial future would look like if we didn't come up with a new game plan for her care.

How We Resolved the Problem

Because my wife had dealt with this exact scenario with a number of her dementia clients, she suggested that when Mom's enrollment in her current managed care plan expired at the end of that calendar year, we move her back to traditional Medicare and then decide if we wanted to pay the 20 percent deductible out of pocket or buy a supplemental plan to pay the out-of-pocket expenses. We figured that the cost for Mom's annual supplement, about $4,000 a year for her circumstances, was more than her deductible would be for doctor visits and tests in the next few years, if she didn't have many hospitalizations or major diagnostic requirements. So we didn't get the supplemental coverage.

For the most part, we've guessed correctly about not needing a supplement. But our big win was that Medicare paid 80 percent of all of the Alzheimer's-related diagnostics and treatments Mom subsequently required, and that alone saved us thousands of dollars. More importantly, it allowed us to make sure that Mom received, and continues to receive, all of the medical and clinical services she needs as she continues her battle with Alzheimer's disease. A little knowledge can sometimes be a very powerful tool—especially when it comes to Medicare.

Until next time, thanks for caring.

Ron Kauffman

Ron Kauffman is a Certified Senior Advisor, and an expert on issues of aging and caregiving. His live talk radio program, Successful Aging is heard in south Florida, and he is the author of Caring for a Loved One with Alzheimer's Disease, available at www.seniorlifestyles.net.

Posted in Caregiving: Parenting Your Parents, Medicare