How to Pay for Short-Term Senior Rehabilitation

It's estimated around 17% of adults aged 65 or older will need hospitalization each year due to an accident, fall, illness, or surgery. Of these adults, around 70% will need some form of short-term or long-term care following their hospital stay. 

One common type of care following a hospital visit is rehabilitation. However, hospital and rehabilitative expenses can add up quickly. 

There are many ways to pay for rehab, including Medicare and Long-Term Care Insurance, to name a few. Below, we'll discuss more ways to cover rehabilitation and why some methods may work better than others.  

Does Medicare Cover a Short-Term Rehabilitation Stay?

One of the main ways individuals pay for rehab is through Medicare. Just to recap, Medicare is an entitlement health insurance program for individuals aged 65 and older. (This is not to be confused with Medicaid, which helps low-income individuals.)

Medicare will pay for a maximum of 100 days of inpatient rehabilitation in a skilled nursing facility (SNF) per benefit period. A benefit period is the time frame Medicare uses to track your use of hospital and skilled nursing facility services. 

Your benefit period starts on day one of a hospital visit. A new benefit period begins after you haven't received inpatient care for 60 days in a row. 

In original Medicare, coverage for rehabilitative services in a skilled nursing facility looks like this:

• Days 1 to 20: Medicare covers the full cost of covered services. 

• Days 21 to 100: Medicare covers some of the cost of covered services with a copay of up to $200 per day. Medicare sets new daily coinsurance amounts each year. 

• Days beyond 100: Medicare does not cover the cost of any services. 

The only exception to care beyond 100 days is through lifetime reserve days. Lifetime reserve days are a limited number of days individuals may use to partially cover care under unique circumstances. A daily coinsurance payment applies for these days as well. 

However, not everyone with Medicare can get coverage for a rehab stay. Individuals must meet specific requirements to qualify for rehab coverage under Medicare. These have to do with the nature of the hospital or rehab stay and include:

• A doctor must deem your stay medically necessary and write a note confirming such.

• You must receive care at a hospital for three consecutive days prior to your rehab stay. This does not include ER, observation, or discharge days. 

• You must receive both hospital and rehab care from a Medicare-approved facility. 

• Your rehab stay must be inpatient skilled nursing care.

Assuming all the requirements listed above have been met, Medicare will cover your rehab stay. Medicare is broken down into parts; different ones will cover different amounts of care, also known as Medicare Part A, Part B, and Medicare supplements. 

Medicare Part A (also known as hospital insurance) covers:

• Hospital stays

• Inpatient rehabilitation

• Skilled nursing facilities

• Hospice care

• Some home care

Medicare Part B covers medically necessary miscellaneous expenses often associated with hospital or rehab stays:

• Tests, screenings, and services requested by a doctor 

• Outpatient care

• Necessary medical equipment

• Some prescription medications

• Preventative services

Many people use Medicare supplements or Medigap to help limit out-of-pocket costs, deductibles, and copays before their lifetime reserve runs out. 

It’s also important to remember that Medicare only covers skilled care or medical care provided in an inpatient skilled nursing facility setting. This does not include any custodial care or long-term care that often goes hand in hand with recovery and rehabilitation. 

What About Medicare Part C or Medicare Advantage Plans?

Individuals with Medicare Part C or Medicare Advantage plans are also eligible for rehab coverage. Medicare Part C offers the same benefits as Part A and Part B, meaning rehab coverage is comparable to regular Medicare plans. 

The biggest difference between Medicare Part C and traditional Medicare plans is that Part C is offered through private insurance companies. Many Medicare Part C plans offer additional benefits like dental or vision coverage. However, these Medicare Advantage plans are required to provide the same coverage as traditional Medicare Part A and Part B plans.

PACE and Medicaid May Cover a Rehabilitation Stay

Medicaid covers almost all medical and long-term care for individuals who meet Medicaid income and asset requirements. This may include short-term rehab stays, as long as the doctor verifies the rehab stay is medically necessary for recovery. 

However, many seniors are covered under the joint Medicaid and Medicare Program of All-Inclusive Care for the Elderly (PACE).  

PACE is a program for older adults 55 or older who meet eligibility requirements for both Medicaid and Medicare. This program is optional and only offered in 32 states. However, the program offers great benefits for those who qualify. 

The goal of PACE is to help seniors utilize home and community-based care services and stay out of nursing homes. One of the ways PACE achieves this goal is by covering rehabilitation care for seniors transitioning from hospitals to back home.  

Coverage will vary depending on your state and situation, but if you are already eligible for benefits through PACE, you should visit your state’s PACE resources website to learn how you can use the program to your advantage.  

What Types of Rehab Do Medicare, Medicaid, and PACE Cover?

Rehabilitation isn’t one size fits all; in fact, there are several different types of rehab services, and most are covered by Medicare, Medicaid, and PACE. 

Medicare offers the most comprehensive coverage as far as rehab goes, covering all the services listed below. Rehab coverage through Medicaid and PACE is a bit more nuanced. In general, both programs cover all the rehabilitative services mentioned below, but since Medicaid and PACE are state-run programs, there may be more variance than with Medicare. 

Regardless of if you use Medicare, Medicaid, or PACE, you must meet specific medical requirements to get coverage. Coverage of rehab services generally includes:

• Inpatient and outpatient rehabilitation care

• Rehabilitative home care

• Physical, occupational, and speech therapy

• Rehabilitative medical equipment

• Group therapy and mental wellness programs

• Condition-specific rehab care, such as cardiac or pulmonary care

• Help with activities of daily living

Traditional Health Insurance Plans May Cover Rehab

What if you’re not eligible for coverage under Medicare or Medicaid? Well, you might still be in luck. Most employer-sponsored health insurance plans and any plans purchased under the Affordable Care Act (ACA) will offer limited coverage for short-term rehabilitation following a hospital stay. 

Many plans offer 100 days of coverage, but there's a variance depending on your specific plan. There may also be requirements to access coverage, or you may only be covered for a specific number of days.

It's important to review your policy's details to determine when you're covered and when you're not. It's also essential to remember that just like Medicare, traditional health insurance plans do not cover long-term care or custodial care. These plans only cover skilled nursing and medical services. 

Long-Term Care Insurance Covers Short-Term Rehab

Long-Term Care Insurance offers comprehensive coverage for long-term care services, including rehab stays following hospital visits. Long-Term Care Insurance covers both skilled and custodial care provided in a rehabilitative setting. 

Long-Term Care Insurance steps in to cover rehab if the need for care goes beyond 90 days. Medicare always pays for rehab first, then LTC Insurance steps in to bridge the care gap and prevent a loss of income, assets, or savings. 

Individuals may also use Long-Term Care Insurance to cover custodial care needs like help with activities of daily living during their rehab stays. This is because Medicare does not cover custodial care for any period of time. 

The way LTC Insurance works for individuals who already have policies is simple: you pay a premium for your plan, and when you need long-term care, you can file a claim and start receiving care benefits. 

If you don’t have an existing policy, it is not possible to qualify for a new LTC Insurance policy if you already need care or are currently receiving care. However, other options like short-term care insurance may have more lenient eligibility requirements and may also help cover the cost of care. 

For more information on Long-Term Care Insurance and other policy options, speak with a Long-Term Care Insurance specialist. 

Rehab Coverage Options for Veterans and Their Families

If you're a veteran receiving benefits under the Veterans Affairs, you may also be entitled to some coverage. The VA offers skilled care coverage for individuals transitioning from a hospital or nursing home back home. 

The rehabilitative services VA health insurance will cover include:

• Semi-private room

• Nursing care

• Meals (including special diets)

• Physical, occupational, and speech therapy

• Medications and medical supplies provided by the facility

You must meet specific conditions for the VA to cover your care; these include: 

• A qualifying hospital stay. Individuals must be hospitalized for three consecutive days, not including the discharge day. 

• A need for skilled care. A doctor must determine that you need skilled care services or rehabilitation that cannot be provided at home. 

• Admission within 30 days. You must enter a skilled nursing facility (SNF) within 30 days of discharge from a hospital. 

Assuming you meet all of the above criteria, then VA will cover rehab until you no longer need it. There is no set limit on the number of days covered by VA health insurance. 

The VA healthcare system is designed to serve all veterans, regardless of the cause of their medical needs. So, even if you need skilled nursing from a non-service-related condition, you may still be eligible for care (assuming you meet the above criteria).

Keep in mind that custodial long-term care is only covered for veterans who meet Medicaid eligibility.

Some individuals may also be eligible for coverage under Tricare. This healthcare program is for the United States Department of Defense Military Health System. It provides health benefits to a variety of individuals, including active duty service members, retired service members, family members, and more. 

Tricare healthcare may cover rehabilitative services. Check with your specific Tricare plan or a Tricare representative to learn what is and isn't covered. 

Finding Short-Term Rehabs Near You

Finding short-term rehabilitation that works for you or your loved one can be challenging. It's especially important to make sure your hospital and rehab are affiliated with Medicare or Medicaid if that's how you plan on covering your care services.  

If you need help finding rehab or rehabilitative services, you're in luck. LTC News has compiled thousands of care facilities around the U.S. in our Care Directory. 

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You can use this tool to find and compare high-quality rehab facilities in your or your loved one's area. But this tool isn't just limited to rehab services; you can also use it to find continuing care options like home care services, assisted living facilities, or other long-term care facilities. 

If you're already familiar with and satisfied with the care services and facilities in your area, you may want to ask if any facilities offer rehab services on top of their traditional offerings. 

Rehab services are flexible and can happen at stand-alone facilities or within assisted living facilities or skilled nursing facilities. Asking about rehab services could help streamline your search and ensure you receive quality care from providers you already trust.

How To Pay for Senior Rehab

There are several avenues to pay for rehabilitation care, including Medicare, traditional health insurance, Veterans Affairs healthcare, Long-Term Care Insurance, and PACE. 

Some programs offer more comprehensive and definitive coverage than others. Combining options like Medicare and Long-Term Care Insurance can guarantee the most comprehensive coverage, offering both skilled and custodial care. 

Planning for a rehabilitation stay is an essential part of long-term care. However, it's only one piece of the puzzle.

LTC News wants to help everyone learn about long-term care. Below, we've compiled a list of resources that can help you continue your long-term care journey: 

• How To Pay For Long-Term Care – In this article, you can learn about different ways to pay for all types of long-term care, including rehab stays. 

• Navigating the Transition From Hospital to Rehab to Home – Transitioning from a hospital to a rehab to back home can be stressful, especially for older adults. This article can give you some strategies to help smooth this transition and de-escalate the situation.

• Making a Long-Term Care Budget – Rehabilitation should be a part of everyone’s long-term care budget. But what else should you include, and how can you decide how much to save? In this article, we’ll give you the rundown on what to plan for and how to make a safe, long-term financial plan.