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I take care of her in my home and she is on hospice, covered completely by medicare. Doesn't she still need the supplement just incase she is removed from hospice?

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Talk to your Hospice Nurse about what is covered and what is not. Personally, I would not be making major changes at this crucial moment. If you have part A, B and D, leave it alone.
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I agree. Leave the supplemental in place for now. You never know what might happen.
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