Many are confused about Medicare and if you're on it, being confused isn't okay. The potential cost of confusion is a risk you just don't want to take. To help out, I've decided to put together a series dedicated to clearing things up (in bite size pieces for those of you who, like me, can't handle too much in one sitting).
Let's start with the basics:
Original Medicare
Original Medicare is administered by the federal government and covers medical stuff (NO DRUG COVERAGE INCLUDED) and is divided into two parts:
Part A – Hospital (includes inpatient hospital care, skilled nursing facilities, home health care, and hospice)
Part B – Medical (includes doctors, urgent care, emergency rooms, lab services, diagnostic services, and outpatient hospital procedures)
For the sake of those “bite size pieces” I promised, let's stick to Part A for now. We'll consider it our appetizer.
How Part A Works
PART A DEDUCTIBLE
If you are admitted to the hospital or receiving home health care, hospice, or care in a skilled nursing facility, you will be covered under Part A. That's the simplest explanation. Part A can be a little tricky to explain so stick with me as I unpack it for you.
When you are admitted to the hospital and are receiving coverage under part A, you will be responsible for a deductible. This is a 60 day deductible. In 2021 the deductible is $1,484. This means you will pay that amount before Medicare Part A begins to pick up your cost of care. Once you've been out of the facility for 60 days, a new benefit period begins.
For example:
Let's say you go into the hospital in January and are in there for a few days and paid your deductible. Part A kicks in and begins to cover everything. You are released but you take a turn for the worse and wind up getting admitted again in February. Bummer! But on the bright side, you won't be billed for another deductible because you haven't been out of the hospital for 60 days yet.
However, let's say you get out and get readmitted in March, 60 days after your first stay in the hospital in January. Now you'll be responsible for another deductible because you've entered a new deductible period. Major bummer. As you can see, this deductible could, depending upon the timing of your hospital stays, be repeated several times in one year. I sure do hope that doesn't happen to you though!
Another cost you could see under Part A would be in the form of copays or coinsurance (your out of pocket share of cost). Your first 60 days in the hospital you have no copay or coinsurance, only a deductible. But if you rack up over 60 days in there you will pay $371 per day for days 61-90 of each benefit period (in addition to paying your deductibles). Yikes, I know. I wish that was as bad as it gets but brace yourself because it's not. Days 91 and beyond carry a $742 per day coinsurance (again, that's in addition to your $1,484 deductible per 60 day benefit period). These are known as your “lifetime reserve days” and you get up to 60 of them allowed during – you guessed it – your lifetime. After those have been used up you will be responsible for paying full costs of all hospital services rendered. Just writing that makes my stomach jump into my throat, but that's how it works. Sorry, I don't make the rules.
PART A PREMIUM
The good news is that most people don't pay a premium for Part A because that's what those tax payments for Medicare have been funding all those working years. If you've been employed and paying into this for 10 years (40 quarters) or more your premiums should be covered for Part A. If, however, you haven't worked and payed into the system for 10 years and you want Part A, you'll have to pay for it. The premium could cost you between $259 to $471 per month for 2021, depending on how many quarters you've paid your Medicare taxes. Take heed all you under-the-table workers because all the money you're saving in income taxes might come back to bite you in the butt when you turn 65. No judgment here, just a word to the wise.
Other coverage included in Part A:
Home Health Care Services – you pay $0
Durable Medical Equipment – you pay 20% of Medicare approved amounts
Hospice Care – you pay $0 (you may have small copays (up to $5) for prescription drug and other pain relief products while at home and if a drug isn't covered under hospice you may have to pay a copay under your drug plan (we'll talk about drug plans in another course of this bite-sized Medicare feast). Also, you may pay 5% for Medicare approved respite care and Medicare won't cover your housing costs (room and board) if you get hospice care in your own home or in a nursing facility.
Mental health inpatient care – works exactly like hospital inpatient stays with the exception of a 20% (of Medicare approved amount) coninsurance you have to pay for mental health services you receive from doctors or other providers during your stay in the hospital.
Whew! That was a lot and you may want to read it through more than once just to digest it all fully. But now you hopefully have a better grasp of what we call Medicare Part A. Give yourself a break now but please come join me soon for our 2nd course – Medicare Part B! I think you'll find it a bit more palatable than this Part A “appetizer.”
Oh, and a quick P.S.
Medicare changes things annually so the costs and coverage included are for this year only – 2021.