Medicare Part A
Inpatient Hospitalization & Long-Term Care
Since we can’t predict when we’ll be hospitalized for long periods of time, being required to carry Part A works to our benefit when we need it most. While receiving inpatient services at the direction of a doctor’s order, you can rest easy knowing most of your basic care needs are covered – semi-private room or private room when medically necessary, daily meals, general nursing, medications, and related hospital services.
You’ll even find comfort knowing that post-hospitalization care is also included should you need to be transferred to a skilled nursing facility or receive home healthcare or hospice services. These additional services include skilled nursing care, physical therapy, occupational therapy, speech-language pathology, ambulance transportation, and medical social services, among others. Typically, you are covered up to 100 days in each of these settings with certain exceptions. For instance, coverage for hospice care is generally sustained for as long as medically necessary.
nd the types of facilities you can receive treatment from are pretty inclusive: Acute care, critical access, and long-term care hospitals; inpatient rehabilitation and inpatient psychiatric facilities; and inpatient care as part of a qualifying clinical research study.
Lifetime Reserve Days
If you remain in good health and don’t require long-term care in a hospital setting, Part A is likely to meet your needs throughout your lifetime with minimal impact on your budget. However, if you find yourself requiring substantial long-term inpatient care, you’ll become familiar with the “Lifetime Reserve Days” policy.
“Reserve” is the keyword here. Medicare Part A allocates 60 “reserve” days during the lifetime of your coverage. You receive 90 days of coverage for each hospital stay before having to use your lifetime reserve days. Each day of inpatient care after the 90-day mark depletes your reserve day balance by one day.
LET’S ILLUSTRATE THIS SCENARIO: When you are admitted to the hospital and stay for 95 days, you will use a total of 5 lifetime reserve days (accounts for days 91-95 of inpatient care). This would bring your overall reserve day balance to 55. A few months down the road, you are admitted again, and this time spend 100 days in the hospital. This stay uses 10 lifetime reserve days (accounts for days 91-100 of inpatient care), bringing your remaining reserve balance to 45 days. The trend would continue until all reserve days have been used. NOTE: Reaching this milestone is likely to result in increased costs for future services!
Some good news! The premium for Medicare Part A is probably free for you if you’ve worked a total of 10 years (40 qualifying quarters of employment). During your employment, the Medicare tax that you paid was actually pre-paying your Medicare premium – nice, right?! While this helps to offset your out-of-pocket costs, you will still be responsible to pay for deductibles, coinsurances, and copayments, when required. Not to worry though, there are more options to help drive down costs, which we’ll be happy to walk you through.
If you don’t have 10 years of employment history, there’s no need to panic! Once it’s proved that you’ve been a legal resident or green card holder for the past five years, you’ll be eligible to enroll at the premium rate, which is currently $259-471 per month depending on the duration of your employment.
What is Cost-Sharing?
Each year, Cost-sharing is a term you’ll hear frequently in the Medicare world. It refers to all out-of-pocket expenses not covered under your plan (deductibles, coinsurances, and copayments). These costs are determined each year by CMS for all Medicare options. To give you an idea of what you can expect, the cost-sharing rates for 2021 inpatient and long-term care hospital services are:
- $1,484 deductible for each inpatient hospital stay (no hospitalization during prior 60 days)*
$371 per day (days 61-90 of consecutive hospital stay)
- $742 per day (days 91-150 of consecutive hospital stay)
- When lifetime reserve days are depleted, you are responsible for all costs for care
*Long-term care deductible may be waived under certain circumstances.
Daily rates for post-hospitalization rates are typically less, however, there is generally a smaller window of time before you are obligated to pay all costs, with the exception of hospice care.
- Part A allows you to go directly to a doctor or hospital when you need care – you do not have to obtain prior permission from Medicare or a primary care doctor first.
- If costs have you concerned, you can explore ways to offset health-related expenses by adding Medigap policies or Medicare Advantage Plans (Medicare Part C) to your Part A coverage.
- If you know you are likely to require significant long-term care, you should discuss all available options with our Medicare experts, as out-of-pocket costs will become significant once your lifetime reserve days are used.
- If comfort is important to you, know that some healthcare “extras,” such as a television, phone, slipper socks or hygiene supplies, may come at an additional cost to you if the hospital charges these services separately.
Drawing Social Security
If you are already drawing Social Security Income by the age of 65, you will be automatically enrolled in Part A and will receive your Medicare card in the mail verifying your coverage. Be sure to keep an eye out for this 2 – 3 months before you turn 65, and then place it in a safe location.
If you have a retirement health plan, be sure to sign up for Medicare Part A and Part B during your eligibility period at the age of 65. Medicare will serve as your primary insurance, with your existing retirement health plan being your secondary. Having both will afford you considerable coverage for any healthcare services you incur.
If you have an individual health insurance policy through the ACA marketplace exchange, signing up for Part A at the age of 65 will still be required to avoid penalties and other adverse impacts on benefits like Social Security.
If you are still working and your employer has less than 20 employees, you will need to sign up for Medicare when you become eligible and will be required to sign up for Parts A and B.
If you work in a company with a large number of employees, you have more options to consider. In this scenario, you are likely to already have creditable coverage through your employee group plan, therefore you can delay enrollment into Medicare with no penalty. If you elect to enroll, your employer plan will remain your primary coverage and Medicare will serve as your secondary coverage. If you aren’t thrilled with the employee health plan you’re currently receiving, you may be more inclined to sign up for Medicare as soon as you become eligible.
Bottom line: Enroll in Part A as soon as you’re able, as there is no premium cost for the majority of individuals. Take the time now to identify your initial enrollment period, to best avoid late penalties, which are added to your monthly premium payments. General enrollment takes place from January 1 to March 31 each year, with other enrollment exceptions available depending on your situation.