Welcome to our newest installment in our Understanding Medicare series! Last time we learned about who started Medicare and why. This post we will be diving into the first half of Original Medicare – Medicare Part A. Let’s take a look at what Part A is, how it’s paid for, and how much it covers.

Medicare Part A is considered “compulsory hospitalization insurance”. It is compulsory in that all workers covered by Social Security finance its operation through a portion of their Federal Insurance Contribution Act, or FICA, taxes and automatically become eligible once they qualify for Social Security benefits. No matter if you want it or not, you will have Part A once you become eligible for Social Security.

So, what does Part A cover?

As mentioned previously, it is Hospitalization Insurance, therefore it covers all inpatient hospitalization, posthospital skilled nursing facility care, and a very minimal amount of Home Care. For the first 60 days of hospitalization during any one benefit period, Medicare pays for all covered services, except for an initial deductible – which is $1365.00 for 2019. Covered services include semiprivate rooms, nursing services, and other inpatient hospital services.

If you find yourself in the hospital past that 60 days mark, Medicare will pay a reduced amount of the covered services. For days 61-90 of hospitalization, the patient is responsible for a DAILY co-payment equal to 1/4th of in the initial deductible period – which is $341 per day in 2019.

While most people do not stay in the hospital longer than 90 days, it can happen. Medicare patients also have a lifetime reserve of 60 days of hospital coverage. If you’re hospitalized past 90 days, you can tap into this lifetime reserve. The lifetime reserve is a ONE TIME BENEFIT, meaning it does not renew with each benefit period. If the lifetime reserve days are utilized, the patient is responsible for a higher daily co-payment equaling ½ of the initial deductible, or $682 per day in 2019. If a patient is hospitalized past 150 days, exhausting all lifetime reserve days, the patient is then responsible for the full amount of all hospital charges past that 150-day mark.

That’s a lot of numbers and fractions. Let’s start with what a benefit period actually means. The 90 day hospitalization coverage under Part A is renewable every BENEFIT period and not every calendar year. A benefit period starts when a patient enters the hospital and ends when the patient has been out of the hospital for 60 days. If a patient reenters the hospital before the end of a benefit period, the deductible is not reapplied and the 90 day coverage is not renewed. However, if the patient reenters the hospital after a benefit period ends, a new deductible is required and the 90 day coverage period is renewed.

For example, if Janice entered the hospital on 02/01/19 and was discharged on 02/15/19, but re-entered the hospital on 03/01/19, a new deductible would not be applied and the 90 days coverage would pick up where she left off on 02/15/19 – meaning since she only used 14 days when she initially was admitted, she would pick up on day 15 when she was re-admitted.

Alternatively, if Robert entered the hospital on 02/01/19 and was discharged on 02/15/19, and did not re-enter the hospital until 06/01/19, his 90 day coverage would renew, requiring him to pay a new deductible, but restarting the clock essentially on the daily co-payment amounts. He would start fresh with Day 1 when he re-entered the hospital on 06/01/19.

Are you still with me?

There’s more.

Home Healthcare under Part A

This section of care is limited to 20 service days per benefit period, but it does provide coverage for intermediate care or Physical, Occupational, or Speech Therapy in a home setting. Medicare Part A covers the entire cost for covered home health care services but must be provided by a Medicare-certified home health agency, and a doctor must certify that you are home-bound. According to Medicare, you are “homebound” if both of the following are true:

  • Under normal circumstances, you cannot leave home and doing so would require substantial effort.
  • It is medically inadvisable for you to leave home without the help of another person, transportation, or special equipment.

Hospice Care

Hospice care is also a Medicare Part A benefit for terminally ill patients and their families. It includes coverage for skilled nursing either in a hospice facility or home setting, as well as medications for pain relief and symptom management. Respite for caregivers in a home setting and home health aides are also available. Hospice benefits are unlimited; but, to be eligible, a doctor must certify that the medical condition is terminal, and that death is expected within 7 months.

Skilled Nursing Facility

Medicare Part A provides coverage for the costs of care in a skilled nursing facility as long as the patient was first hospitalized for three consecutive days. Treatment in a skilled nursing facility is covered at 100% for the first 20 days. Days 21-100, patients are required to pay the daily co-payment equal to 1/8th of the initial hospital deductible – or $170.50 per day. No Medicare coverage is provided for stays longer than 100 days.

Now let’s review what Part A DOES NOT cover.

Part A does not cover a private room (unless medically necessary) or any personal items, such as shampoo or razors, or extraneous charges like TV or telephone usage. Part A also does not cover the cost of blood. If the hospital receives it free of charge from the blood bank, then you will not be charged. However, if the blood has to be purchased, then you are required to pay for the first 3 units each calendar year, unless someone donates blood. Medicare Part A does not cover 24-hour home care, meals, or homemaker services if they are unrelated to your treatment. It also does not cover personal care services, such as help with bathing and dressing, if this is the only care that you need.

Remember — Medicare Part A does involve OUT OF POCKET EXPENSES.

That wraps up Medicare Part A – Inpatient coverage. The important items to remember is that with original Medicare Part A you will have out of pocket expenses, including the initial deductible, as well as daily co-payment rates for longer inpatient stays. This coverage renews on a BENEFIT PERIOD basis rather than calendar year. For the 90 day coverage to reset, you must be out of the hospital for a minimum of 60 days. The out of pocket costs will be important in our later installments on how to cover these amounts. We have made a simple chart below to help break down the out of pocket costs that come with Medicare Part A.

2019 costs at a glance

Part A premium Most people don’t pay a monthly premium for Part A (sometimes called “premium-free Part A“).
Part A hospital inpatient deductible and coinsurance You pay:

  • $1,364 deductible for each benefit period
  • Days 1-60: $0 coinsurance for each benefit period
  • Days 61-90: $341 coinsurance per day of each benefit period
  • Days 91 and beyond: $682 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
  • Beyond lifetime reserve days: all costs
Part A Skilled nursing facility stay You pay:

  • Days 1–20: $0 for each benefit period .
  • Days 21–100: $170.50 coinsurance per day of each benefit period.
  • Days 101 and beyond: all costs.
Part A Home Care You pay:

Part A Hospice Care You pay:

  • $0 for hospice care.
  • You may need to pay a copayment of no more than $5 for each prescription drug and other similar products for pain relief and symptom control while you’re at home. In the rare case your drug isn’t covered by the hospice benefit, your hospice provider should contact your Medicare drug plan to see if it’s covered under Part D.

Don’t forget to test your knowledge using our interactive quiz below. If you have questions on how to cover the out of pocket costs of Medicare Part A, call the Medicare Guy at 904-737-3636. We’ll see you next time as we explore Medicare Part B – Outpatient coverage.

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