es,

a mirage of protection. In reality, Medicare is little more than a traditional "major medical" policy, with most of its payment going for hospitalization and related medical services.

One of the most depressing tasks for nursing home administrators is to explain to the elderly in need of nursing home care, their families, and surprisingly often their physicians, the harsh reality of their Medicare "benefit." On paper, the Medicare nursing home coverage is for up to 100 days in a skilled nursing

..

facility (SNF), the most intensive level of nursing home care. In practice, this small benefit is further diminished by Medicare's "fine print", notably restrictive medical eligibility criteria, a minimum of three days prior hospitalization, and excessive patient cost sharing.

t

The Medicare coverage is shocking when contrasted with the need for nursing home coverage by the elderly, especially the rapidly increasing over 80 years old segment. The end result is that Medicare pays for less than 2 percent of the nation's nursing home costs. Even after Medicaid and all other sources of financial protection, nursing home patients and their families are still stuck with about 42 percent of the over $20 billion

cost.

Looked at from the elderly's perspective, their # 1 out-of-pocket health cost burden is nursing home care.

A rough

indication of the magnitude of this personal financial burden is revealed by the most recently available figures on health expenditures by age groups, presented in the below chart. However, this chart masks the actual out-of-pocket burden on those who utilize nursing homes because it is based on per capita figures and the private expenditure amounts include private insurance payments. But nursing home expenses, unlike physician and other health bills, are incurred by a relatively small number of people and almost none is paid by private insurance. Thus, it should not be surprising that estimates of people suffering catastrophic health costs find half of the cases to be nursing home patients.

When Congress enacted the Medicare skilled nursing home benefit in 1965, it was considered primarily a cost effective alternative to extended hospital stays. Thus, the benefit provides elderly and disabled beneficiaries with a maximum of 100 days of intensive nursing or rehabilitative care following a hospital stay. However, the 100-day limit is part of the Medicare myth; in actuality, the average span of Medicare coverage in a long term care facility is only 28 days. Obstacles to utilization

beyond the 28 day average are built into the Medicare program.

ic

Perhaps the most significant problem faced by a Medicare beneficiary seeking SNF care is the narrow definition of covered. services.. Beneficiaries must require "on a daily basis skilled nursing care provided directly by or requiring the supervision of skilled nursing personnel or other skilled rehabilitation services, which as a practical matter can only be provided in a SNF on an inpatient basis..." Under this definition, persons recovering from a stroke who do not have rehabilitative potential, or terminal cancer patients who do not need daily pain injections would not be eligible for the SNF benefit, regardless of patients' ability to care for themselves.

The coverage requirements are further complicated by a "three-day prior hospitalization" requirement. According to

this rule, a patient must spend at least three days in a hospital in order to be considered for Medicare coverage in a SNF. While

22-020 0-83--12

this policy may, in some cases,

Pat

cause unnecessary hospital a sions, it also eliminates from consideration certain pat who might otherwise be considered Medicare-eligible. admitted directly from home or from another long term care fac fall into this category.

Finally, and perhaps most devastating to benefici
According to current pract

is the copayment requirement.

a Medicare patient spending 60 days in a hospital in 1983 pay a deductible of $304, but if in a SNF for the same n of days would be faced with 5 times that amount in copaym $1,520. The chart below shows the cumulative impact of pa cost sharing for SNF vs. hospital care.

tal admis

patients

Patients

re facility

eficiaries

practices,

In 1983 will

same number

copayments:

of patient

As

face

a result, patients needing nursing home care for a extended period of time cannot utilize the full 100-day Medicar benefit without severely depleting or completely liquidatin financial resources. Consequently, many individuals are with the choice of refusing care or joining the thousands o impoverished Americans on the Medicaid rolls for the Medicai program does cover extended stays in SNFs as well as intermediat care facilities (ICFs)

utilizatio

Due principally to these barriers to coverage, of the Medicare SNF benefit has been extremely low. With deman for care increasing or at least remaining the same, Medicare-covere days per enrollee declined over 17 percent between 1977 an 1979. In fact, days per aged person declined in 38 states with more than a 10 percent drop in 27 states.

Today's unmet needs for long term coverage is not goin to go away; the demographics are clear that they will only worsen Nursing home utilization rates increase as people age. Nursin home patients typically are though as of being 65 years or olde but more precisely are 75 or more. In fact, more than 70 percen of nursing home residents are 75 and over. Future demand fo nursing home care is certain because of increasingly rapid growt rates for successively older segments of the elderly population