How Does Original Medicare Work
Original Medicare is a government-funded medical insurance option for people age 65 and older. Many older Americans use Medicare as their primary insurance since it covers:
- Inpatient hospital services. These benefits include coverage for hospital visits, hospice care, and limited skilled nursing facility care and at-home health care.
- Outpatient medical services . These benefits include coverage for preventive, diagnostic, and treatment services for health conditions.
Original Medicare generally doesnt cover prescription drugs, dental, vision or hearing services, or additional healthcare needs.
However, for people who have enrolled in original Medicare, there are add-ons such as Medicare Part D prescription drug coverage and Medicare supplement plans that can offer additional coverage.
Do I Have Other Options
If you want extra help with your inpatient care, there are options you can look into. One is a Medigap plan that covers hospital or skilled nursing facility coinsurance. All Medigap plans will cover Part A coinsurances and hospital costs for a year after Medicare benefits end. Most plans will also cover at least a portion of skilled nursing facility care coinsurances. Only Plans A and B offer no coverage, while Plans K and L offer a percentage of coverage.
Many Medicare Advantage plans offer some form of hospital or skilled nursing facility coverage.
It may also be worth investigating a Medicare Advantage plan. Many Medicare Advantage plans offer some form of hospital or skilled nursing facility coverage. This coverage differs from plan to plan, though.
If this coverage is important to you, we recommend working with a licensed sales agent who can help you choose a plan. Whether youâre looking for a Medigap or Medicare Advantage plan, the Medicareful Plan Finder tool can help you find one.
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If you find yourself admitted to an inpatient care facility, itâs reassuring if you know your Medicare plan will cover your needs. Understanding what is covered, and when itâs covered, is critical to ensuring youâre never caught with shocking charges. This is why knowing your benefit periods is so important.
Your First Chance To Sign Up
Generally, when you turn 65. This is called your Initial Enrollment Period. It lasts for 7 months, starting 3 months before you turn 65, and ending 3 months after the month you turn 65.
Avoid the penaltyIf you miss your 7-month Initial Enrollment Period, you may have to wait to sign up and pay a monthly late enrollment penalty for as long as you have Part B coverage. The penalty goes up the longer you wait. You may also have to pay a penalty if you have to pay a Part A premium, also called Premium-Part A.
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How A Benefit Period Works
The length of an insurance policy’s benefit period will affect the price of the premium because the longer the benefit period, the greater the insurer’s risk. Toward the end of the benefit period, the insurer will notify the policyholder of the cost to renew the same coverage for the coming term. For benefit periods to continue uninterrupted, the policyholder must submit the premium payment for the next term before the current coverage expires.
In some insurance policies, the benefit period begins when the insurer accepts the first premium paymenteither the full amount due or a scheduled installment. However, other types of policies require that the policyholder finish a waiting or elimination period before the benefit period begins. For example, a long-term disability policy may require a wait of one year before honoring claims for payments. No benefits are payable during any probationary period.
Other programs such as Medicare and Social Security benefits may have a benefit period based on age.
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A Benefit Periods: Multiples
If youve had private health insurance in the past, youre probably accustomed to annual benefit periods. You may have a deductible to meet before coinsurance or copayments kick in.
There may be an out-of-pocket maximum on what you spend over the course of the year. When your plan year ends, everything resets and a new benefit period begins.
Medicare Part A is different. Its benefit periods arent annual theyre based on how long youve been discharged from the hospital. You can actually encounter multiple Part A benefit periods in the same calendar year if youre hospitalized more than once.
A benefit period under Part A begins the day youre admitted to the hospital and ends when youve been discharged for at least 60 days. If youve been out of the hospital for more than 60 days and are admitted again, a new benefit period begins.
Each benefit period requires that you meet a deductible. Its $1,556 in 2022, but can change each year. Because hospital care is generally pretty expensive, you should brace yourself to pay that full amount each time youre in the hospital.
After meeting your deductible, you pay nothing out of pocket for hospital costs for your first 60 days you are admitted. For stays beyond that, you can expect to pay coinsurance.
It should be unlikely that youd encounter a lengthy stay that would require coinsurance payments, barring a serious medical episode.
What Exactly Is A Medicare Benefit Period
Medicare defines a benefit period as:
- A hospital stay of any length,
- Plus any time you spend recovering in an inpatient rehabilitation facility,
- Plus the 60 consecutive days immediately following your release.
Benefit Periods Can Be Longer or Shorter Than Illnesses: The term benefit period only determines how you get billed. It does not mean the length of an illness or the length of time you are treated for a condition. Thats important to know.
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How Can You Avoid Benefit Period Costs
There are two ways to get rid of those deductibles and copayments:
When hospital bills come knocking, Original Medicare begins to show its flaws. Many people find that having Original Medicare is not enough to shield them from big deductibles and copayments, like the two scenarios at the beginning of this article. If you feel the same way, then take the time to explore your extra coverage options on HealthCare.com.
A Premiums Deductibles & Coinsurance
The chart below lists the Part A premiums, deductibles and coinsurance for inpatient hospital and skilled nursing facility care for Original fee-for-service Medicare. For a comprehensive list of Part A and B costs, see our summary chart, Medicare Benefits & Cost-Sharing for 2022
Part A Hospital Insurance Premiums, Deductibles & Coinsurance
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Insuranceopedia Explains Benefit Period
A benefit period varies from policy to policy. For example, with Medicare, it begins as soon as you are admitted to a skilled nursing facility or hospital and ends once you have not received care for 60 days in a row. On the other hand, for a long-term care policy, it may begin only after a certain waiting period and last up to a lifetime.
Your Benefit Period Determines How Much You Pay For Care
When your benefit period begins, you are responsible for paying your Part A deductible. In 2021, Medicare recipients will pay a $1,484 deductible for each benefit period. For days 1-60 in the hospital, the coinsurance for each benefit period was $0. That means for the first two months in the hospital, you are covered with no daily coinsurance due. For days 61-90 of a hospital stay, coinsurance is $370 per day. For days 91 and beyond, coinsurance for each lifetime reserve day after day 90 for each benefit period is $740. With a skilled nursing facility, coinsurance was $0 for the first 20 days of each benefit period and $185.50 per day for days 21-100.
To find out where you are in your benefit period, refer to your Medicare Summary Notice . This document details all health care services you received in the past 3 months.
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How Medicare Benefit Periods Work
Medicare covers many of the costs associated with inpatient care facilities up to a certain point. Understanding benefit periods is important to knowing your coverage.
If youâve ever needed the services of a hospital or skilled nursing facility, you may have heard the phrase âbenefit period.â This is an important concept in Original Medicare, especially if you have a great need for inpatient care. So, now that weâve got your attention, you may be wondering: What is a benefit period, and why is it so important?
What Services Does Medicare Part A Not Cover
- A private hospital or skilled nursing center room unless its medically necessary
- Hiring your own nurse, also called private-duty nursing care
- Television or telephone in your room if theres a separate charge
- Personal items such as razors or slipper socks unless provided to all patients at no extra charge
- The first three pints of blood unless the hospital gets it from a blood bank at no charge, you arrange to replace it through donating your own or somebody elses blood, or you have additional insurance such as Medigap that covers this cost.
- The cost of a skilled nursing facility where you might go for rehabilitation after being discharged from a hospital if you have not spent at least three days as an inpatient in the hospital. If you were in the hospital under observation, you do not qualify for Medicare coverage for a skilled nursing facility stay.
- The cost of a long-term stay in a nursing home or assisted living center. Medicare will cover your medical needs, but it wont pay for custodial care help with everyday activities such as bathing, dressing, feeding or using the bathroom or for your room or meals.
- Physicians services, which are covered under Part B. This includes the services of doctors, anesthetists or surgeons provided in a hospital or skilled nursing center.
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Why Is It Important
Benefit periods are so important because they define the costs of your coverage. Whenever a new period begins, youâll pay an inpatient deductible. This deductible $1,556 in 2022. For the first 60 days of your benefit period, your care is covered by Medicare Part A. After 60 days, youâll pay a daily coinsurance for your inpatient care. In 2022, youâll pay $389 for days 61 to 90 in a hospital and $194.50 for days 21 to 100 in a skilled nursing facility.
If you do go over 90 days at an inpatient facility, you may still have coverage. Everyone on Original Medicare has 60 lifetime reserve days. These reserve days kick in on the 91st day of your stay at an inpatient care facility. These coinsurance costs are $778 each day in 2022. Once the bank of reserve days is used up, youâre responsible for the full costs. The bank doesnât replenish in a new benefit period either.
Once the bank of reserve days is used up, youâre responsible for the full costs. The bank doesnât replenish in a new benefit period either.
How Do Medicare Benefit Periods Work
Its important to understand the difference between Medicares benefit period from the calendar year. A benefit period begins the day youre admitted to the hospital or skilled nursing facility.In this case, it only applies to Medicare Part A and resets after the beneficiary is out of the hospital for 60 consecutive days. There are instances in which you can have multiple benefit periods within a calendar year. This means youll end up paying a Part A deductible more than once in 12 months.
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Consider Medicare Supplement Insurance
One way to avoid the confusion associated with Part As benefit periods is to enroll in a Medicare Supplement Insurance plan.
These private insurance plans help pay for certain out-of-pocket costs associated with Medicare, including the Medicare Part A costs listed above.
There are 10 standardized Medicare Supplement Insurance plans available in most states, and every one of them covers your Part A coinsurance in full .
If Marge had a Medicare Supplement Insurance plan, she would have paid $0 in coinsurance for her extended hospital stays.
Every plan but one also provides at least partial coverage for the Medicare Part A deductible. Depending on the plan she chose, Marge could have cut her deductible costs in half or eliminated them completely.
So, if Marge enrolled in Plans B, C, D, F, G, or N, she could have paid $0 out of pocket for her hospital costs. She wouldnt have had to think about those complicated benefit periods, either.
To learn more about Medicare Supplement Insurance and get quotes for plans in your area, call a licensed insurance agent today.
Medicare Part A Covers
- Certain care in a skilled nursing facility
- Certain home health services
- Certain hospice care
You will not pay a Part A monthly premium if you are eligible for Social Security retirement benefits or Railroad Retirement benefits. If you have 30-39 quarters of Social Security credits, you may buy Part A coverage and pay a monthly premium of $274 in 2022. If you have 0-29 quarters of Social Security credits, you may buy Part A coverage and pay a monthly premium of $499 in 2022.
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Do The Hospital And Snf Benefit Periods Overlap
Yes and no. Weve talked about hospital and skilled nursing facility coverage as if theyre separate. But in reality, these benefits work together. Because you cant get SNF care unless youve spent three days as an inpatient at a hospital first, these benefits go hand in hand.
Lets say that during your hospital stay for pneumonia, your doctor determines that you need close observation and care as you recover from the infection. He orders treatment at a skilled nursing facility, which starts the day youre released from the hospital .
Your Part A benefit period started the day you were admitted to the hospital . Because youre already inside of a benefit period, Medicare will cover up to 100 days of SNF care while youre in this benefit period. Once you recover from the pneumonia and decide to go home, youll still be inside the same benefit period until its been 60 days since you received SNF care.
The Part A benefit runs from the day youre admitted to a hospital or skilled nursing facility and ends once youve gone 60 consecutive days without needing care from either one. During that time, you have 100 days of coverage for SNF care at your disposal. This maximum resets with each benefit period.
Hospital Costs With Medicare Advantage May Be Different
Medicare Advantage plans are an alternative to Original Medicare . They are offered by private insurance companies approved by Medicare.
Medicare Advantage plans set their own cost-sharing terms and may or may not charge deductibles for hospital stays. Some plans may charge a flat amount per hospitalization up to a set number of days. Other plans may charge a copay or coinsurance amount for each day in the hospital.
Medicare Advantage plans include hospital and medical insurance all in one plan. Costs, coverage and other details are explained in plan materials. You can get specific plan information by calling the insurance company offering the plan or by visiting the companys website.
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Medicare Benefit Period Explained
The Medicare benefit period is simply the way Original Medicare measures your use of inpatient hospital and skilled nursing facility services. Your benefit period begins the day youre admitted as an inpatient into a hospital or SNF and ends when you have gone 60 days in a row with no inpatient hospital or SNF care.
The benefit period has nothing to do with the calendar year but is based on your medical care needs. It begins on the first day you are admitted into the hospital or SNF and ends 60 days after the last day you received treatment. For example, if you are admitted into the hospital on May 1 and receive 15 days of treatment, your benefit period would begin on May 1 and end on July 15. If you need to return to the hospital before the 60 days have expired, you will still be in the same benefit period. However, as soon as 60 days have passed with no care, if you return to the hospital, you will start a new benefit period.
While there is no limit to the number of benefit periods you can have or how long each benefit period can last, you must pay the inpatient hospital deductible for each benefit period.