If you need rehabilitation care for conditions such as a knee or hip replacement, stroke, spinal cord injury, fall, or motor vehicle accident, you will need to determine what your insurance (private insurance, Medicare, or Medicaid) will cover and what you are expected to pay. You are advised to read your policy and, if necessary, call your insurance provider to discuss any questions you have. Most healthcare facilities will be able to help you determine which costs are covered, what you must pay for, and what basic options you have for payment.
Medicare and Medicaid
Medicare may or may not pay for rehabilitation services from a skilled nursing facility (SNF). To qualify, you must
- need skilled nursing care 7 days a week or skilled rehabilitation services 5 days a week (a doctor or nurse practitioner must certify that you need these services)
- have been admitted to a hospital for at least 3 consecutive days (not counting the discharge day) within the 30-day period before going to the SNF. Being in the hospital under observation status does not count towards the 3-day admission requirement. Under the NOTICE Act, Medicare beneficiaries must receive notice if they are receiving observation services as an outpatient at a hospital for more than 24 hours. The hospital must provide this notice no later than 36 hours after observation services are initiated as well as the implications of this status related to coverage for post-hospitalization SNF services.
- be admitted to the SNF for the same illness or injury that was treated in the hospital
- be assessed by rehabilitation staff at least once a week to find out whether you have reached restorative potential. Medicare stops paying for rehabilitation services when patients reach this level.
Medicare TipsFind templates, fact sheets, and more information at the Medicare Rights Center website.
When Medicare pays for rehabilitation services, it pays the full cost for the first 20 days and part of the cost for the next 80 days. You or a family member will have to pay a co-insurance fee during these 80 days. This fee is set by Medicare, not by the rehabilitation facility.
Medicare puts no limits on the number of benefit periods a patient can have.
If Medicare decided that it will no longer pay for rehabilitation services, you may appeal. To learn more about the appeal process, talk with the staff at the financial office of the rehabilitation facility or visit the Medicare Rights Center’s website.
Medicaid will pay for rehabilitation if strict guidelines about the type and amount of service needed are met. If you are eligible for Medicaid but do not yet have it, the social worker or other staff in the rehabilitation setting can help you apply.
Some patients are “dually eligible”: they have both Medicaid and Medicare coverage. In this situation, Medicaid pays for the rehabilitation services not covered by Medicare.
Private Health Insurance
Most health insurance plans follow the guidelines used by Medicare, but they may require more frequent assessments of your restorative potential. Talk with a representative of your health insurance company when you are admitted to rehabilitation and throughout the course of care.
Even when Medicare or another type of insurance pays all or most of the costs of your rehabilitation, you may still have to pay some costs. They may include charges for private telephones, haircuts, and other personal care services. Although Medicare or other insurance will pay for an ambulance to take you from the hospital to an inpatient rehabilitation facility, it may not pay the costs associated with your transportation to another facility for required tests.
In addition, you may need more time to reach your full potential than to reach what is considered your restorative potential. The rehabilitation staff will assess you to get a better idea of what services you need. If Medicare or other health insurance has ended, you may have to move to another setting, where you must pay all costs that insurance does not cover. This situation is quite common, especially with older adults. It’s important to remember that you are still making progress toward your rehabilitation goals.
Several types of disability insurance exist. You may have short- or long-term disability coverage through your employer’s insurance plan. Or you may be able to qualify for Social Security disability benefits. To quality for Social Security disability benefits, you must have worked in jobs covered by Social Security. Then you must have a medical condition that meets Social Security's definition of disability. Find more information on the Social Security Administration’s disability website. You may need to hire an attorney who specializes in Social Security disability to obtain the benefits.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires continued coverage to be offered to employees, their spouses, former spouses, and dependent children who have group health insurance. It is available when group health coverage would otherwise be lost because of certain events. The premiums for COBRA continuation coverage are often higher than those that active employees pay for group health coverage, because the employer usually pays part of the cost of employees’ coverage, and all of the cost can be charged to individuals receiving continuation coverage.
To be eligible for COBRA coverage, you must have been enrolled in your employer's health plan when you worked, and the health insurance plan must continue to be in effect for active employees. COBRA continuation coverage is available when a qualifying event occurs that would cause you to use your healthcare insurance coverage. Sometimes an injury, illness, or disabling condition can lead to a qualifying event.
For more information, see the United States Department of Labor's COBRA Continuation Health Coverage FAQs.
Durable Power of Attorney
A durable power of attorney (POA) enables you (called the "principal" in the power of attorney document) to appoint an "agent," such as a trusted relative or friend, to handle specific health, legal, and financial responsibilities. Without a durable POA document in force, the person who wishes to handle these things would have to go to court and be officially appointed your guardian. This process can take a great deal of time and may require ongoing reporting to the courts.
Two types of POA exist: the POA for healthcare and the POA for finances. The POA for healthcare gives a designated person the authority to make healthcare decisions on your behalf. The POA for finances gives a designated person the authority to make legal and financial decisions on your behalf.
Like a document establishing a trust, a durable POA can be written so that the transfer of responsibilities occurs immediately. Or the POA can state that the POA goes into effect if you become unable to make your own decisions or communicate them to others. Until that point, you can choose to continue to make decisions on your own.
To establish a POA, speak with an attorney with experience in estate or healthcare planning.