Have you heard of the law case "Jimmo vs. Sebelius?" It's a class action lawsuit filed in November of 2011 in which the plaintiffs sued to make Medicare pay for skilled nursing care and home care for patients with chronic conditions, not just conditioins expected to improve. Most advisors who are familiar with the Medicare LTC benefit always say that Medicare only pays for skilled care when people are improving. That's not true anymore.
Who filed the lawsuit? Several organizations are behind the lawsuit, including The Center for Medicare Advocacy, Vermont Legal Aid, the Parkinson's Action Network and the National Multiple Sclerosis Society. You can understand why organizations such as one that supports Parkinson's would want Medicare to pay for skilled chronic care.
On January 24th of 2013, the settlement for the lawsuit was approved, and CMS (Centers for Medicare Services) has issued revisions to its Medicare Benefit Policy Manual to make sure that Medicare coverage is available for skilled maintenance services in the home care, nursing home and outpatient settings. Those who were denied Medicare for long-term condition can now go to the Medicare website and re-apply for benefits. (Link to re-review form here)
CMS has also implementing a nationwide education campaign for those who make Medicare determinations to ensure that beneficiares with chronic conditions are not denied coverage for critical services because their underlying conditions will not improve.
However, despite the changes many providers don't understand the new rules - here is a recent Reuters article about some challenges people have, such as client with Parkinsons.
So if Medicare will pay for maintenance of skilled care due to this class action law suit, why should someone keep or buy LTC Insurance?
The reason is the difference between custodial care and skilled care. Custodial care is needed for all the Activities of Daily Living - bathing, dressing, homemaking, companionship - things that are increasingly being provided by home care agencies and assisted living facilities. Some of these private organizations are no longer dealing with Medicare - they are instead relying on private pay or LTC Insurance for reimbursment.
As this court ruling shows Medicare benefits can change on a dime - and we know Medicare is under extreme financial stress. This court ruling expanded benefits didn't come with a funding requirement.
So, the bottom line - this change in Medicare will not replace the need for LTC Insurance but can help those with chronic conditions.