Original Medicare and Medicare Advantage plans both cover certain types of approved stem cell therapy.
Medicare Parts A and B (original Medicare) provide cover for approved stem cell treatments and the associated out-of-pocket costs. Coverage varies between the different Medicare options.
The purpose of stem cell therapy is to restore normal blood production and development in a person whose body has lost this function.
This article discusses stem cell therapy, examines the coverage and costs of each part of Medicare, and describes the specific procedures that Medicare covers. It also looks at the costs of inpatient stem cell therapy for people who do not have Medicare.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
There are two main types of stem cell: embryonic stem cells and adult stem cells.
Embryonic stem cells can develop into all the cells of the adult body. Adult stem cells come from an organ or tissue and can develop into specialized types of cell within the organ or tissue. Adult stem cells act as an internal repair system that replaces injured or diseased cells.
Because stem cells can repair and replace cells, the therapy may help with conditions that have few treatment options. Currently, doctors use stem cells that come from blood or bone marrow to treat people with cancer, immune system conditions, and blood disorders.
Despite the potential, many types of stem cell therapy are harmful and illegal, according to the Food and Drug Administration (FDA). Although the FDA have approved some types, they have not approved others due to serious safety concerns linked to them, such as tumor development.
Medicare covers part of the costs of two types of FDA-approved stem cell therapy, or transplants. The coverage applies to transplants, whether doctors perform them on an inpatient or an outpatient basis.
Medicare Part A
Part A, which is hospitalization insurance, covers inpatient transplants. However, Part A pays only for admissions that fall under a regulation called the two-midnight rule. According to this rule, the admitting doctor expects a person to need to stay in a hospital for at least two midnights.
Although Part A is generally not appropriate for shorter hospital stays, Medicare may grant coverage on a case-by-case basis, depending on the admitting doctor’s judgment.
The cost associated with Part A is a $1,408 deductible. There is a $0 coinsurance for the first 60 days of a hospital stay.
Medicare Part B
Part B, which is medical insurance, covers outpatient transplants that a doctor considers medically necessary.
The yearly deductible of $198 applies. Once a person meets the deductible, they usually pay 20% of the Medicare-approved amounts for doctor services and other costs involved in the therapy.
Medicare Part D
Someone with original Medicare is eligible to buy a Part D plan for prescription drug coverage that would include medications needed for stem cell therapy. Part D deductibles, copayments, and coinsurance costs vary according to the policy a person has purchased.
Medigap is Medicare supplement insurance. People who have original Medicare may buy a Medigap plan, which helps them pay out-of-pocket costs associated with parts A and B.
Medicare Advantage (Part C)
Medicare Advantage provides the coverage of parts A and B, and most plans also include prescription drug coverage.
Private insurance companies offer Medicare Advantage policies, and because of this, the out-of-pocket costs are different from those of original Medicare.
Out-of-pocket costs may also vary among plans, but all policies have a yearly cap on expenses. A person with Medicare Advantage must go to an in-network provider.
Medicare covers only two procedures: allogeneic hematopoietic stem cell transplantation (Allo-SCT) and autologous stem cell transplantation (Au-SCT).
In Allo-SCT, a healthcare professional will deliver healthy donor stem cells to a person through an intravenous infusion. The purpose is to restore normal blood production in someone whose body is not able to perform this function.
A candidate for the transplant may be an individual with a deficiency in blood production. This can be either inherited or acquired. An example could be a person with severe aplastic anemia.
Before the transplant, a person will receive treatment to weaken the immune system — such as chemotherapy, radiation therapy, or both — so that the body will not reject the donor cells. This treatment also allows the donor cells to get to the bone marrow, where they grow and make new blood cells.
Complications may include rejection of the donor cells (despite the treatment to weaken immunity). Another possible complication is that immune cells from the donor may attack a person’s healthy cells.
In addition to helping the beneficiary with costs, Medicare also helps the donor with costs. Covered donor expenses include doctor services, hospital care, and follow-up care.
An Au-SCT procedure restores stem cells without the help of a donor. The purpose of the transplant is to enable the body to resume blood production and development after organs and tissues sustain damage.
Before an Au-SCT transplant, a health professional will remove a person’s stem cells and freeze them. Afterward, the individual will receive high dose chemotherapy with or without radiation therapy. Next, the healthcare professional will return the collected stem cells to the body.
If the procedure works as intended, the transplanted cells make new blood cells within the bone marrow.
Au-SCT has a higher rate of relapse than Allo-SCT, but Au-SCT does not carry the risk of a healthy cell attack because it does not involve donor cells.
Stem cell therapy can be very expensive. A 2017 study in American Health & Drug Benefits examined the costs of 1,562 people who had inpatient Allo-SCT or Au-SCT between 2010 and 2013.
The results revealed that the costs ranged from $140,792 to $289,283.
The costs in the study were from claims made to private health companies rather than to Medicare. The study did not provide an estimation of the outpatient costs of stem cell therapy.
People with Medicare are eligible for coverage of two types of stem cell transplant. Candidates for the therapy may include people with a blood disorder, such as aplastic anemia, or someone with blood cancer, such as lymphoma.
If an individual has original Medicare, they can buy a Medigap plan, which helps with out-of-pocket expenses. A person with a Medicare Advantage plan will have out-of-pocket costs that differ from those of original Medicare.
Stem cell therapy is costly. Before undergoing one of the transplants, a person may wish to check their Medicare plan to get an estimate of both covered and out-of-pocket costs.
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