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Overview of Health Care Coverage for Older People

By Amal Trivedi, MD, MPH, Associate Professor, Department of Health Services, Policy and Practice and Department of Medicine, Brown University

Dealing with the costs of a serious or chronic disorder can be as distressing as dealing with the disorder itself. The costs are often beyond the personal resources of most people. For older people, most health care expenses are paid for by the following:

  • Medicare: It helps people who are age 65 or older, who are disabled, or who need kidney dialysis.

  • Medicaid: It helps certain people who are poor or disabled.

  • Other government programs such as the Department of Veterans Affairs (VA): The VA provides health care for honorably discharged veterans who meet certain eligibility requirements.

These programs are supplemented by private insurance or personal funds, including those of family members.

Understanding how Medicare, Medicaid, or other government programs work is complicated. What is completely paid for, what is partly paid for, who pays for how much of what, and how the payments are arranged can be difficult to understand. The programs change frequently, and for Medicaid, the regulations vary from state to state. The government and health care foundations provide current information about these programs on the Internet and in booklets available by mail. But part of the problem is the complexity and fragmented nature of the health care system and of the payment system for health care.

Health care can be paid for in two ways (see Financial Issues in Health Care):

  • Fee-for-service: Health care practitioners and institutions are paid for each hospital stay, each visit to a practitioner, each test, and each treatment.

  • Capitation: Practitioners and institutions are paid a fixed amount to provide health care for a specific group of people regardless of how many visits, tests, or procedures those people have or how much they cost.

Some health care plans are managed. Managed care simply means that a health care plan gives directions to health care practitioners and institutions about what care should be provided and when. These directions are intended to help ensure better, more consistent care and to control costs. Managed care can include HMOs, preferred provider organizations (PPOs), point-of-service (POS) plans, or a combination.

Who Pays for What?

Type of Care


Covered by

Hospital care

Inpatient care, including mental health care

General nursing and other hospital services and supplies

Drugs used during hospitalization

A semiprivate room (a private room only if medically necessary)


Medicare Part A

Medicare Part C (Medicare Advantage)


Department of Veterans Affairs (VA)*

Short-term care in a certified skilled nursing facility (nursing home)

Skilled nursing care

Social services

Drugs used in the facility

Medical supplies and equipment used in the facility

Dietary counseling

Physical, occupational, and speech therapy (if needed) to meet the person's health goals

Transportation by ambulance (when other transportation endangers health) to the nearest facility providing needed services unavailable at the skilled nursing facility

A semiprivate room


Medicare Part A if people need short-term care temporarily after a hospital stay

Medicare Part C if people need short-term care temporarily after a hospital stay



Outpatient care

Doctor’s, nurse practitioner’s, and physician assistant’s fees

Emergency department visits

Transportation by ambulance (when other transportation endangers health)

Outpatient surgery (with no overnight stay in the hospital)

Rehabilitation (physical, occupational, and speech therapy)

Diagnostic tests, such as x-rays and laboratory tests

Outpatient mental health care

Outpatient dialysis

A second opinion if surgery is recommended and a third opinion if opinions differ

For people with diabetes, diabetes supplies, self-management training, eye examinations, and nutrition counseling

Smoking cessation

Durable medical equipment, such as wheelchairs, hospital beds, oxygen, and walkers

Medicare Part B

Medicare Part C



Home health care

Personal care, including help with eating, bathing, going to the bathroom, dressing

Part-time skilled nursing care

Physical, occupational, and speech therapy

Home health aide services

Social services

Medical supplies, such as wound dressings, but not prescription drugs

Medicare Part A if people are homebound and need part-time skilled nursing care or rehabilitation on a daily basis

Medicare Part B

Medicare Part C



Preventive care

Screening tests for prostate and colorectal cancer


Papanicolaou (Pap) test

Bone density measurements

Glaucoma tests

Influenza, pneumococcal, and hepatitis B vaccinations

Diabetes screening

Cholesterol screening

Medicare Part B

Medicare Part C



Extra benefits

Prescription drugs


Hearing aids

Medicare Part C

Medicare Part D (prescription drug plans)

Medicaid in some states


Long-term care in an assisted living community

Varies greatly from community to community


Help with daily activities

Some social and recreational activities

Some health care

Medicaid in a few states (partial coverage)

VA* in some situations

Long-term care in a skilled nursing facility (nursing home)

Varies from state to state



Hospice care

Physical care and counseling

Room and meals only during inpatient respite care and short-term hospital stays

Medicare Part A

Medicare Part C

*For the Veterans Administration, the rules of eligibility vary for different services and change frequently.

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