Personal Medicare

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Medicare Part A Deductibles & Benefit Periods

Medicare Part A assists paying for inpatient care in a hospital or skilled nursing facility. But there’s more to it than that.

There is some cost sharing with Medicare Part A, which includes deductibles. Medicare Part A deductibles are different from a typical deductible in health insurance for people under 65.  You pay a deductible for each “benefit period,” rather than for the calendar year. A benefit period starts the day you go into a hospital or skilled nursing facility. It ends when you have been out of the facility for 60 consecutive days.

You may be admitted multiple times to the hospital during one benefit period. For example,  you schedule a minor procedure in the hospital and are there only a short stay and then released.  Then you go back into the hospital the next week for a different health problem. That means you have 2 hospital stays within 1 benefit period, which means you would only pay 1 deductible for both stays in the hospital.

Once your last stay at the hospital has passed 60 consecutive days, you next hospitalization will be the beginning of a new benefit period. This is true even if you go into the hospital a 2nd time for the same health problem. You would pay 2 deductibles, 1 for each benefit period.

Medicare Part A helps in paying for up to 90 days of hospital or skilled nursing care for each benefit period. Part A covers a limitless number of benefit periods.

Lifetime Reserve Days and Medicare Part A

Lifetime reserve days are extra hospital days covered by Medicare. They are able to be used if you are in the hospital or a skilled nursing facility for more then 90 days. You have 60 extra covered days in your account that you can use throughout the rest of your life.

Important things to Remember About Part A and Benefit Periods:

  • You pay a Part A deductible for each benefit period.
  • A benefit period begins when you enter the hospital and ends when you are out for 60 consecutive days.
  • One benefit period may include multiple hospitalizations.

What Medicare Part B Covers

Medicare Part B Coverage

Because Medicare Part B usually involves paying a monthly premium, it is natural to be concerned about what exactly it covers. Basically it covers two different types of services.

Outpatient Medical Services

Firstly, Medicare Part B is meant to cover necessary outpatient medical services if you already have a medical condition that needs to be diagnosed and treated. This might include:

  • Normal medical costs if you take part in a clinical research study;
  • Emergency ambulance costs, including by plane or helicopter if necessary;
  • Special medical equipment you might need in your home such as canes, crutches, hospital beds, oxygen equipment, walkers, and wheelchairs;
  • Inpatient, outpatient, and partial hospitalization for mental health problems;
  • Getting a second opinion, if you need one, before surgery;
  • Certain outpatient prescription drugs related to your medical treatment.

Services to Prevent or Detect Illness

Medicare Part B also covers services meant to prevent or detect illness. Here are some examples of the services this includes:
  • Flu shots, hepatitis B shots, and pneumococcol shots;
  • Screenings for various types of cancer such as breast, colorectal, and prostate cancer;
  • Screenings for cardiovascular disease;
  • Screenings for other diseases such as diabetes, glaucoma, and HIV;
  • Bone mass measurements for those at risk of osteoporosis;
  • Screenings and counseling for alcohol misuse and depression;
  • Counseling on quitting smoking;
  • Screening and counseling on sexually transmitted infections;
  • A first “Welcome to Medicare” visit and a yearly wellness visit.

If you are not sure whether or not Medicare will cover services you think you need, ask your doctor.

Medicare Advantage: Get To Know the 6 Types of Plans

Medicare Advantage Plans (Part C plans) are offered by private Medicare-approved companies.  These plans provide you with Original Medicare coverage, Part A and Part B, plus extra services -most also include Medicare Part D prescription drug coverage.  The amount you pay and your additional services vary by plan.  Here’s a basic overview of the 6 types of plans.

  1. Health Maintenance Organization (HMO) Plans  These Medicare Advantage Plans are available in some areas of the country.  Most HMO’s require you to use a select network of doctors and health care providers.  You are also required to use an in-network primary care physician to coordinate your overall care and refer you to any specialists as needed.
  2. Point of Service (POS) Plans  This is a second managed care option that allows you to see out-of-network doctors at a higher cost than in-network doctors.  Also, you can usually see in-network specialists without a referral from your primary care physician.
  3. Preferred Provider Organization (PPO) Plans  This is a third type of managed care plan –available in local or regional areas.  They don’t always require you to choose a primary care provider.  However, seeing an out-of-network doctor usually costs more.  Certain plans require you to pay a physician directly and then file a claim with your PPO.
  4. Private Fee-For-Service (PFFS) Plans  PFFS plans are not managed care plans, therefore they work without health care provider networks.  You can see any Medicare-eligible doctor or hospital that agrees to accept payment from your plan.  Some plans require you to pay the doctor directly and then submit a claim to your insurance company, which then pays you back.
  5. Medical Savings Account (MSA) Plans  These plans combine a High Deductible Health Plan (HDHP) and a special bank account fund (the MSA).  You can use the money in this account to pay for your health care costs, however, only Medicare-covered expenses count toward your deductible.  Once you’ve paid the deductible, the plan covers expenses normally covered under Medicare.  MSA plans do not include Medicare Part D prescription drug coverage, so policy owners need to purchase a stand-alone Part D plan.
  6. Special Needs (SNPs) Plans  These plans serve people with specific diseases or medical needs.  This can include people with certain chronic diseases and conditions, some are for people who have both Medicare and Medicaid and some are for people who live in an institution (IE nursing home).  The plans customize benefits, health care provider choices, and covered drugs to best meet the specific needs of the groups they serve.

You can read about the basics of Medicare Advantage plans here.

Looking to browse Medicare Advantage plans in your state?  Click here.  Or, if you’re ready to compare plans based on your exact zip code and prescription drugs, click here.

Medicare Part A Explained

There are four basic parts of Medicare:  Medicare Part A, Medicare Part B, Part C, and Part D.  I’m going to break down Medicare Part A including how to qualify for it, when you get it, and what exactly it covers.

Qualifying for Medicare Part A

You qualify for Medicare Part A if you have worked at least 40 quarters (ten years) while paying Medicare taxes, or if you are the spouse of someone who has worked the ten years.  You may also qualify for Medicare Part A if you have a diagnosed disability for at least 24 months.  You will not have to pay for Medicare Part A if you meet these requirements.  Remember those Medicare taxes that were coming out of your check every month?  Well Medicare Part A is what you were paying for all those years.  If for some reason you only had worked over 30 quarters, but did not make it to 40 quarters you are still able to buy Medicare Part A for a reduced premium.  The current premium in 2017 is $227.  If you didn’t make it to even 30 quarters, or if you don’t qualify any other way, you will have to pay the full premium of $413 in 2017.

When Can I Enroll Into Medicare Part A

You will likely be able to enroll into Medicare Part A when you turn 65 years of age, or if you have been diagnosed with a disability, and have received benefits for at least 24 months.  I write in more detail about this subject in my post about qualifying for Medicare.

Medicare Part A Coverage

Medicare Part A is not complete Medicare coverage.  You will want Medicare Part B and Medicare Part D as well.  In some cases you may even elect to enroll into Medicare Part C.  Medicare Part A is known as hospital coverage.  Don’t think that this means that it covers an entire hospital stay because is does not.  Medicare Part A covers the following:

  • Inpatient Hospital Care – this is for things like a semi-private room, supplies, and drugs as part of your treatment
  • Skilled Nursing Care – in a skilled nursing facility under certain conditions for a limited time
  • Hospice
  • Home Health Services – intermittent skilled nursing care along with some therapy and continued occupational services

Expect to pay the following:

  • Inpatient Hospital Deductible – $1316 for 2017 – Can be applied multiple times for different occurrences and covers days 1-60
  • Hospital Co-pay – Days 61-90 is $329/day in 2017
  • Skilled Nursing Facility – Days 1-20 is $0; Days 21-100 is $164.50/day in 2017
  • Hospice – $0
  • Home Health Services – $0

Notice what is lacking from your hospital coverage is doctor services.  If you require surgery, that cost falls under Medicare Part B, along with any other doctor provided services.  This is why Part A is not enough and must have Part B included with it.  Also, notice that you still have out of pocket costs with Medicare Part A.  You will still have some substantial costs to pay when you go to utilize your Medicare Part A coverage.  This is why you may want to consider some other kind of supplemental coverage along with your Medicare coverage.

Medicare Qualifications

Ever wonder what it takes to qualify for Medicare?  I’m breaking it down for you here in a very easy to understand way so you’ll be ready to go when it comes time to enroll into Medicare!

Turning 65

As you may already know, turning 65 is one of the qualifications for receiving Medicare.  Many people will qualify for Medicare this way; however, there are ways to qualify for Medicare without being 65 years old which I’ll discuss later.  This isn’t just another birthday as you’ll soon discover.  Several months before your 65th birthday you will start to be inundated by mail soliciting you to sign up for Medicare insurance.  Expect to find seminar requests, direct mail wanting you to fill out applications, and mail asking you to fill out a card and send it in along with many other solicitations.  The main piece of mail you’ll want to look out for is your actual Medicare card from Social Security.  It will be in a larger envelope instead of your typical letter size envelope.

Much has been said recently about whether or not Medicare will even be there for you when you need it.  It’s no secret that Medicare is running out of money at an alarming rate.  One of the many suggestions to alleviate this problem is to raise the age at which you would qualify for Medicare.  As of now, 65 is the magic number to qualify for Medicare.

Disabled

As I mentioned earlier, it is possible to qualify for Medicare without having to be 65 years old.  One way of doing this is through being disabled.  While you do have to go through the process of qualifying for disability benefits, typically you will received Medicare automatically after being on disability for 24 months.

ESRD

ESRD or End Stage Renal Disease also qualifies you for Medicare.  You will need to be receiving dialysis on a regular basis, or have had a kidney transplant in order to qualify.  You also will need to apply for Medicare since you won’t be automatically enrolled.  Your coverage begins under these circumstances:

  • The 3rd month after the month in which a regular course of dialysis begins; or
  • The first month a regular course of dialysis begins if the individual engages in self-dialysis training; or
  • The month of kidney transplant; or
  • Two months prior to the month of transplant if the individual was hospitalized during those months in preparation for the transplant.

When you qualify, you typically are qualifying for Medicare Part A at no cost, and the ability to enroll into Medicare Part B for a monthly premium.  In most cases, you will automatically be enrolled into both Part A and Part B.  It is up to you to decline Part B if you don’t want to pay the monthly premium.  Personally, I would discourage you from declining Part B unless you have some special circumstance that makes sense for you to decline it.  An example would be if you are still working and have coverage under an employer group plan.