Housing – Who Pays For Home Care Services? – Private Third Party Payors

Three methods of payment for home care services are available to America’s elderly population: self-pay, public third-party payors, and private third-party payors. If home care services are not paid by third-party payors, the patient must pay for the services. This is known as self-pay. However, several private third-party payors also provide home care services themselves or fund such services, including commercial health insurance companies, managed care organizations, CHAMPUS, and workers’ compensation.

Commercial Health Insurance Companies

At least some home care services are usually covered by commercial health insurance companies, such as group insurance providers, but the terms of coverage vary according to the policy provisions. For instance, home care for acute needs are usually covered to some degree. However, long-term home care needs are less likely to be covered.

Hospice services in the home are usually covered, including all aspects of the patient’s needs, such as nursing care, medical social work, personal care, therapy, prescriptions, and medical equipment and supplies.

Two additional types of commercial health care are often purchased by consumers, Medigap insurance and long-term care insurance.

Medigap

Medigap insurance policies are designed to fill in the gaps in Medicare coverage, including patient deductibles and copayments. Medigap policies are highly regulated by both federal and state law. Although covered benefits depend on which type of policy a consumer owns, some of the policies pay for at-home recovery, including some personal care services. To be eligible, the personal care must be ordered by the patient’s physician along with Medicare-covered skilled home health services. This coverage usually helps those in recovery from illness, injury, or surgery.

Long-Term Care Insurance

Depending upon the specific policy, home care is sometimes covered by long-term care insurance. Although originally designed to guard against expensive nursing home care, long-term care insurance has evolved, as has the care of America’s elderly. As a result, some long-term care policies cover personal care and other in-home services.

Managed Care Organizations

If a group health plan contracts with Medicare, it must provide a full range of home health services, as designated by Medicare, in its geographic area. As a result, managed care organizations (MCOs) sometimes covered home care services, including hospice services. Typically, however, MCOs will not cover services if they have not been preapproved.

CHAMPUS

The Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) covers home care services for eligible military personnel and their dependents and survivors. CHAMPUS covers skilled nursing care and comprehensive hospice services, including nursing care, medical social work, therapy, personal care, durable medical equipment and supplies, and medications. CHAMPUS benefits are provided on a cost-shared basis, so patients are responsible for a portion of the costs incurred.

Workers’ Compensation

State workers’ compensation programs cover home care services if they are medically necessary to treat a worker’s on-the-job injury.