In the year 2000, about 12,800 home health agencies served approximately 8,600,000 clients across the United States. In that year Medicare paid an estimated 85% to 90% of the total cost of home health agency services amounting to $ 8,700,000,000. Although current figures are not yet available, the number of home health agencies has been going up year after year as well as the number of clients being served.
Although home health agencies are privately owned, Medicare is the principle payer for their services. Home health services through Medicare are available under parts A and B. In order to qualify for Medicare homecare a person must have a skilled need, must be homebound and there must be a plan of care ordered by a Physician.
Prior to 1997 Medicare typically paid for home care for as long as it was needed. Prior to 1997 annual Medicare costs were almost double the amount cited above. In order to save money Medicare has since gone to a prospective payment system where, according to the plan of care, a certain amount of money is allocated to resolve the skilled need for the patient.
Monies are typically provided for a period of up to 60 days. If the patient recovers sooner then money may have to be reshuffled to other patients who are not responding as well. At the point where the patient does not respond or improve, no more Medicare money is forthcoming. After Medicare cuts off, a person continuing to need long-term care services must find sources other than Medicare.
Home health agencies deliver a variety of skilled services outlined by the chart below. The plan of care always includes as well custodial services to help the care-recipient remain in the home. These would include an aide for an hour or two a day to help with bathing, dressing and transferring. If there is time remaining other personal services may be offered as well. These personal services are also covered by Medicare.
Recently Medicare has redefined what it means by "homebound" to allow recipients to leave the home on a limited basis. Beginning in 2003 and ending three years later, Medicare is testing, with a very small test group, a program where selected home health agencies can provide adult day health care instead of home health services. If successful the program will offer a new dimension in Medicare home care. In addition, under the new definition, Medicare will also allow and pay for home visits from doctors who specialize in homebound elderly patients. Limited office visits are also allowed under the new definition.
Finally, in the past few years Medicare is paying for home telehealth visits through a home telehealth, computer work station. Telehealth is being used with some success to provide home care in rural areas where it would be difficult to arrange the personal visit from a home health care agency.
Although Medicare- will authorize up to 60 days at a time of home care, according to the Centers For Medicare And Medicaid Services (CMS) the average length of stay for Medicare home care services is 41.5 days. Oftentimes a person continues to need supervision or care after Medicare quits paying but the payment for that will have to come from someone other than Medicare.
The number of home care patients as a percent of all individuals in that age group goes up drastically with age. Even though the age group of 85 and above represents only 4% of all the aged population it accounts for about 28% of all patients. The bulk of the aged population is between the ages of 65 to 75 but only accounts for about 27% of all home care patients. Total patients for the aged over age 75 account for the other 73%.
A common statement from individuals who are confronted with the need for long-term care planning is,
"I’m in good health, I’m going to live a long time and I won’t need long-term care."
The statistics show otherwise. In fact it is estimated that about half of the population over age 85 is receiving long-term care.
Since about 90% of all home health agency care is paid for by Medicare or Medicaid, the cost of care is not necessarily relevant for this study. But some families do pay for this service out of their own pockets. Costs will vary from area to area. A nurse, therapist or social worker may cost $70.00 to $100.00 an hour. An aide to take care of daily living needs, so called activities of daily living, may cost $10.00 to $25.00 an hour.
Medicare and Medicaid pay 90% of the cost of home health agencies services. The other 10% is shared by families, and private insurance. As more people buy long-term care insurance, they will also be more prone to utilize the services of home health agencies. However, this is only after Medicare has paid its portion. This is because all long-term care insurance policies will only pay after Medicare has paid its obligation.
A new trend for home health care is for agencies to furnish care through a cadre of non skilled employees for families who do not qualify for Medicare or Medicaid homecare but still need help with loved ones at home. The future trend will be for more and more of the cost of home care services to be paid by the family or by insurance if it is available.