A Clear Guide to Paying for Hospice Care

First things first.

No. Hospice does not take your assets.

Neither can Medicare, Medicaid, or any hospice provider can seize your home, savings, or personal property to pay for hospice care. This fear, while common, is based on misinformation. Hospice care is a fully covered benefit under Medicare, and for most families, there are no surprise bills or threats to financial security.

If you’re considering hospice for a loved one but worry about the financial implications, this guide will walk you through exactly how hospice is paid for, what your options are, and how to protect your assets while ensuring quality care.

Why This Fear Exists

The confusion around hospice care and assets often stems from misconceptions about Medicare, Medicaid estate recovery, and end-of-life care costs. Some families confuse hospice with long-term care facilities that may require private payment or “spend down” of assets. Others worry that hospice operates like debt collection—that unpaid bills could result in asset seizure. But, none of this is true.

Hospice care is designed to be accessible, affordable, and covered by your insurance. 

For the remainder of this article, we will cover the major queries surrounding hospice financing. Understanding how payments work helps remove anxiety, allowing families to focus on what matters: comfort, dignity, and time well spent.

How Hospice Care is Actually Paid For

Hospice care can be covered through several pathways. Most patients use Medicare, but private insurance, VA benefits, Medicaid, and financial assistance programs are also available.

Medicare Hospice Benefit: The Primary Payment Source

Medicare Part A includes a comprehensive hospice benefit that covers nearly all hospice services at 100%. This means no deductibles, no large out-of-pocket expenses, and no asset requirements.

What Medicare Hospice Benefit Covers:

• All medications related to the terminal diagnosis (pain relief, anti-nausea, comfort medications)
• Medical equipment (hospital beds, oxygen, wheelchairs, walkers)
• Nursing care and physician services
• Home health aide and homemaker services
• Physical, occupational, speech, and music therapy
• Social work and counseling services
• Spiritual care from chaplains
• Bereavement support for family members (up to 13 months)
• Short-term inpatient care when symptoms require hospital-level management
• Respite care (up to 5 days) to give caregivers a break

What You Might Pay: Medicare usually covers hospice care entirely, but there are two small potential copay events:

1. 5% copay for respite care (temporary inpatient stays to give caregivers relief)
2. 5% copay for outpatient medications (typically capped at $5 per prescription)

For most families, these costs are minimal and for others they can be waived entirely based on financial need.

Eligibility Requirements: To qualify for Medicare hospice benefits, patients must:

• Be enrolled in Medicare Part A
• Receive certification from a physician that life expectancy is six months or less
• Choose hospice care over curative treatment for the terminal illness
• Receive care from a Medicare-approved hospice provider (like Oasis Hospice)

Important: There is no time limit on hospice care. If a patient continues to meet eligibility criteria beyond six months, Medicare continues coverage. Some patients receive hospice care for a year, or longer.

Private Health Insurance

Approximately 10% of hospice patients use private insurance instead of Medicare. This typically happens when the patient is under 65 and not yet eligible for Medicare, or when private insurance offers specific benefits the family prefers.

Most private insurance plans cover hospice care comprehensively, similar to Medicare. Coverage details vary by plan, so it’s important to review your policy or speak with your insurance provider.

When to use private insurance:

• Patient is under 65 and not Medicare-eligible
• Private plan offers additional benefits
• Employer-sponsored health insurance is still active

If your loved one recently retired or left employment, COBRA coverage may continue for a limited time and can be used for hospice care.

Veterans Affairs (VA) Benefits

Veterans and their eligible dependents may qualify for VA-covered hospice care. The VA works with Medicare-certified hospice providers like Oasis to deliver care in the veteran’s home or at IPU facilities like House of Goshen.

Who qualifies:

• Veterans with an honorable discharge
• Veterans enrolled in VA healthcare
• Veterans with service-connected disabilities

What’s covered: The VA covers all hospice services, including medications, equipment, and nursing care. Veterans do not need to meet a minimum service requirement if they served before September 7, 1980, or were discharged due to hardship or disability.

How to access VA hospice benefits: Contact your local VA medical center or speak with an Oasis social worker who can help coordinate VA benefits and ensure seamless care.

Medicaid

Medicaid covers hospice care for eligible patients. Like Medicare, Medicaid hospice benefits are comprehensive and cover all medications, equipment, and services related to the terminal illness.

A Critical Distinction: Medicaid Hospice vs. Medicaid Estate Recovery

This is where much of the confusion arises. Medicaid estate recovery, the process by which states recoup long-term care costs after a Medicaid recipient’s death, does NOT apply to hospice care. Hospice is treated differently under Medicaid rules.

When a patient receives hospice care through Medicaid, their estate is not subject to recovery for those hospice services. Your home and assets remain protected.

Out-of-Pocket Payment

Paying for hospice care entirely out-of-pocket is very rare. However, it is an option for families who are not covered by Medicare, Medicaid, private insurance, or VA benefits.

Out-of-pocket costs for hospice care vary depending on the level of care needed (routine home care, continuous care, inpatient care, or respite care). Because this is uncommon, families considering this option should speak directly with our team at Oasis and House of Goshen to understand costs and explore alternatives.

Financial Assistance: The Oasis Foundation

For families facing financial hardship, our very own Oasis Foundation offers various financial assistance programs to help cover hospice care costs. It is our strong belief that no family should forgo hospice due to financial concerns.

“Financial stress should not compound the emotional challenges families already face, we’re committed to ensuring every patient receives the care they deserve, regardless of their financial situation.” says Gabrielle Bello, Director of The Oasis Foundation.

Social Security: What Families Need to Know

One of the most common questions families ask is whether hospice care will affect Social Security benefits. The answer is simple: your loved one’s Social Security checks will continue uninterrupted.

Hospice providers do not garnish, seize, or redirect Social Security payments. These benefits belong to the patient, and they continue as long as the patient is alive.

Social Security Disability Benefits and Hospice

If your loved one is applying for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), mentioning that they are in hospice care can expedite the process. The Social Security Administration (SSA) provides expedited processing for patients with terminal illnesses through its Compassionate Allowances program.

Conditions that qualify for expedited processing include:

• Advanced cancer (stage 4 or metastatic)
• ALS (Lou Gehrig’s disease)
• Advanced heart disease
• End-stage renal disease
• Patients requiring life-sustaining devices

Hospice patients are prioritized because their medical documentation clearly demonstrates terminal illness.

Auxiliary Benefits for Family Members

In addition to the patient’s Social Security benefits, family members may be eligible for auxiliary benefits if they are caring for the patient’s dependent children. To qualify, the caregiver must be:

• A spouse under age 62, or
• Caring for a child under age 16, or
• Caring for a disabled child who became disabled before age 22

These benefits can provide critical financial support during an already challenging time.

Common Financial Myths About Hospice

Despite being a fully covered Medicare benefit, myths still persist. 

Let’s address the five most common misconceptions:

Myth: “Hospice will take my house to pay for care.”

Fact: Hospice providers have no legal right to seize property. 

Medicare, Medicaid, private insurance, and VA benefits cover hospice costs. Your home, savings, and assets remain yours. 

Myth: “I need to ‘spend down’ my assets before I can qualify for hospice.”

Fact: Hospice eligibility is based on medical need, not financial status. 

You do not need to deplete savings or sell property to qualify. This myth likely comes from confusion with Medicaid long-term care rules, which do have asset limits. Hospice does not.

Myth: “Private pay hospice will drain my family’s savings.”

Fact: Private pay is very rare. Most patients qualify for Medicare or Medicaid.

For the small number of families who do pay privately, Oasis works with them to explore all coverage options first, including financial assistance from The Oasis Foundation.

Myth: “Hospice is only for people without insurance.”

Fact: Hospice is for anyone with a terminal illness and a prognosis of six months. 

Insurance status does not determine eligibility. In fact, Medicare beneficiaries make up the majority of hospice patients, and Medicare is a form of insurance.

Myth 5: “Medicare only covers hospice for six months, then I have to pay.”

Fact: The six-month prognosis is a medical guideline, not a coverage limit. 

If a patient continues to meet eligibility criteria beyond six months, Medicare continues to cover hospice care. There is no arbitrary cutoff. 

“We’ve had patients who have been with us for over a year,” says Sade Bello, co-founder of Oasis Hospice. “As long as the patient’s physician certifies continued eligibility, Medicare coverage continues. Families should never feel rushed or pressured by timeline concerns.”

Financial Planning Considerations

While hospice care itself does not threaten your assets, end-of-life planning involves important financial decisions that should be addressed early.

When to Consult an Elder Law Attorney

If your family is navigating complex estate planning, Medicaid eligibility for other services (like nursing home care), or legal questions about power of attorney and advance directives, consulting an elder law attorney can provide clarity and protection.

An attorney can help with:

• Establishing advance directives (living will, healthcare power of attorney)
• Managing assets to protect family finances
• Navigating Medicaid estate recovery for non-hospice services
• Ensuring legal documents are in place

How Oasis Can Help

You don’t have to navigate financial planning alone. At Oasis, our social workers are trained to help families understand their payment options, access benefits, and connect with community resources. 

We guide families through insurance questions, VA benefit applications, and advance care planning. We also handle the logistics, so your family can focus on being present with your loved one. Social workers can help coordinate with Medicare, private insurers, and VA representatives to ensure seamless billing and coverage.

The Role of Advance Directives

Advance directives—legal documents that outline a patient’s wishes for medical care and financial decision-making—are a critical part of end-of-life planning. These include:

• Living Will: Specifies what medical treatments a patient does or does not want
• Healthcare Power of Attorney: Designates someone to make medical decisions if the patient cannot
• Financial Power of Attorney: Designates someone to manage financial affairs

Having these documents in place protects both the patient’s wishes and the family’s financial security. Oasis social workers can guide families through the process of creating or updating these documents.

Frequently Asked Questions

What if my loved one needs treatment not covered by hospice?

Patients can still receive non-hospice treatments through Medicare Part B, Medicaid, or private insurance. Hospice social workers help coordinate dual coverage so nothing is overlooked.

Does hospice care at House of Goshen cost more than home care?

No. Whether a patient receives routine home care or short-term inpatient care at House of Goshen, Medicare and other insurance programs cover the cost. Families do not pay extra for inpatient hospice stays.

Does hospice care at House of Goshen cost Can I switch from private insurance to Medicare for hospice?

Yes. If your private insurance does not cover hospice adequately or if you become Medicare-eligible during hospice care, you can switch coverage. Oasis billing specialists help facilitate smooth transitions.

Does hospice care at House of Goshen cost Can I switch from private insurance to Medicare for hospice?What happens if I can’t afford the Medicare copays?

Many families qualify for copay waivers based on financial need. Additionally, The Oasis Foundation provides assistance to ensure no one is denied care due to cost.

Will my retirement savings or life insurance be affected by hospice?

No. Hospice care does not affect retirement accounts, life insurance policies, or investments. These assets remain entirely in your control.

Moving Forward with Financial Confidence

Choosing hospice care should never come with fear. 

Medicare, private insurance, VA benefits, and Medicaid cover hospice comprehensively, and financial assistance programs exist for those who need extra support. Your assets are protected, your Social Security continues, and your family’s financial security is not at risk.

At Oasis Hospice & Palliative Care, we believe transparency is part of compassionate care. Our team works with families to navigate insurance, access benefits, and plan ahead so there are no surprises—only clarity and peace of mind.Whether your loved one receives care in their home or at House of Goshen, we’re here to guide you through every step of the process, from medical decisions to financial planning.