Hospice care for the terminally ill is an idea whose time has finally come.

A growing number of patients and their families have been seeking hospice help, as a happier and more humane alternative to hospitals and nursing homes. Health insurers are expanding medical benefits to accommodate the new demand. This week, the hospice industry gets official recognition from the federal government: Starting Nov. 1, Medicare will begin to fund a specific hospice benefit for the terminally ill.

Many people think of hospices as places where people go to die. But a hospice isn't really a place. It's a program run by hospitals, nursing homes, home-health-care agencies or independent hospice organizations. Some 500 hospices now operate in the United States, another 300 are in development.

Insofar as is possible, hospices help patients spend their final days at home rather than in isolation in a hospital bed. They're watched over by their families or assisted by homemakers: Daily nurses are provided, and round-the-clock nurses when the illness reaches a crisis stage. Patients still enter hospitals if their illness demands it. Many hospice programs also include occasional "respite visits" to a hospice center or nursing home, to give the family a few days off. Both patients and family receive counseling, to help them adjust to the inevitability of the death.

Patients normally enter a hospice program only if their doctor believes they have six months or less to live. Ninety percent are cancer patients. No surgery or chemotherapy is provided, or any other heroic attempts at cure. Hospices concentrate on relieving pain and on keeping the patient as comfortable as possible, both physically and emotionally.

Most of the benefits offered through hospice programs are already covered under regular medical insurance. When hospice coverage is added to an employer's group-health plan, it may not even cost the company any more money, according to a survey released last week by the Frank B. Hall Consulting Co. But depending on the plan, a few additional benefits may be provided to a few more people.

Under the new federal program, for example, hospice patients are reimbursed for most of the cost of prescription drugs used at home--which is not the case for the average Medicare patient. Accredited hospices must offer bereavement counseling. Terminal patients not yet in need of skilled nursing care may still receive Medicare-supported homemaker help. Assistance is even available to hospice patients who are not yet completely housebound.

Fifty of the 97 Blue Cross-Blue Shield plans now give some type of hospice benefit, linked to the kind of care available in the community. Other private plans vary widely, depending on what employers want to offer. Some are more limited than others, but the general trend is toward expansion. A 1981 survey by the Health Insurance Institute showed that 30 percent of 4,120 new or amended group-health plans covered hospice care, and since then the number has doubtlessly grown.

It's an open question whether hospice coverage saves an insurance company any money. Small-scale studies suggest the affirmative, but the industry is awaiting the result of a major government study, due out next year.

In theory, "hospices just have to save dough," Thomas J. O'Hara Jr., vice president of Frank B. Hall, told my associate, Wendy Cooper. It's cheaper to take care of patients at home than in the hospital, and cheaper to emphasize pain control than technological life support.

But counting respite visits, a hospice patient may be hospitalized just as much as any other terminal patient. New benefits are available in some plans, and round-the-clock home nursing may be even more expensive than hospital care. The federal government is assuming that the new Medicare hospice benefit will increase total health costs, rather than cut them. But it seems like such a worthwhile program that it's been added to Medicare despite the small additional cost.

To find the name of the hospice program nearest you, ask your doctor or hospital or write to the National Hospice Organization, 1901 Fort Myer Drive, Suite 402, Arlington, Va. 22209.