Medicare beneficiaries who are admitted to a hospital for care are covered under Medicare Part A, which covers inpatient care, hospice care, nursing home care, and home health care. Some patients may be covered for additional care with a supplemental Medigap policy or a Medicare Advantage plan, which offers more extensive coverage than Original Medicare.
However, Medicare Part A is not intended to cover long-term care, so there are limits to how much is covered during each benefit period. The amount that you have to pay out-of-pocket, including your deductible, will change when you begin a new benefit period.
WHAT IS A MEDICARE BENEFIT PERIOD?
A benefit period refers to the period of time since an eligible admission to a hospital or inpatient facility. It starts on the day you are admitted for care at a hospital or skilled nursing facility (SNF) and continues for 60 days after you leave the hospital and no longer receive care.
Your Part A deductible, which is $1,364 as of 2019, applies to each benefit period. Once you’ve paid the deductible, Medicare will cover all of your costs for the first 60 days. For days 61-90 of each benefit period, you’ll be responsible for $341 coinsurance per day. After 90 days, you pay $682 per day for up to 60 “lifetime reserve days” and all additional costs beyond that.
The costs for inpatient stays at a skilled nursing facility are a little different. If you are admitted to a skilled nursing facility instead of a hospital, your coinsurance will be $170.50 per day from day 21 up to day 100. Medicare only covers the full cost for days 1 through 20, so while the amount you’ll pay in coinsurance is lower, the number of days you’ll be fully covered is fewer.
If you move from a hospital to an SNF, you’ll need to meet several conditions in order for your stay to be covered under the same benefit period. You must have:
- Been an inpatient at a hospital for 3 days or more
- Entered the SNF within 30 days of your stay at the hospital
- Received care related to your stay at the hospital
Medicare Advantage and Medigap policies may have different requirements for skilled nursing care coverage, which we’ll look at later in the article.
HOW LONG MEDICARE BENEFIT PERIODS LAST
Regardless of whether you are in a hospital or a skilled nursing facility, your benefit period lasts until 60 days after you’ve left the facility and stopped receiving care. This can be confusing if you are readmitted to the hospital or are moved between a hospital and a nursing facility. Keep a record of all of your hospital visits to ensure that your coverage is accurate.
A benefit period is not tied to a specific illness. You might begin a new benefit period if you seek continued treatment for the same illness after 60 days have passed. Or, you might remain in the same benefit period while being treated for a new condition before 60 days are up. It all depends on how much time has passed between hospital stays.
The important thing to remember is that your benefit period continues until you’ve gone 60 days without being readmitted to the hospital. If you’re readmitted before the 60-day period is up, then the benefit period will continue. After 60 days, you’ll start over with a new benefit period.
HOW THEY AFFECT YOUR DEDUCTIBLE
How your benefit period affects your costs will depend on where in your benefit period you are. If you start a new benefit period, you’ll be entitled to another 60 days of care with no coinsurance costs, but you’ll have to pay for the first $1,364 of care to reach your deductible again.
Unlike Medicare Part B, which has an annual deductible, the Part A deductible applies to each benefit period. So even if you’ve already reached your deductible during a hospital visit, you’ll have to pay the deductible again if you are readmitted during a new benefit period. You won’t have to pay the deductible again if you’ve been out of the hospital for less than 60 days.
There are no limits to how many benefits you can have in a lifetime, or even in a given year. This means that if you make several hospital stays with 60-day gaps between them, you will have to pay the deductible again each time you’re readmitted. On the other hand, if you make several hospital stays without any 60-day gaps, then you won’t have to pay the deductible again. But you may run out of lifetime reserve days and have to pay for all of your costs out-of-pocket.
Either way, it’s important to keep track of how many days you’ve been in and out of the hospital within each benefit period in order to accurately estimate your costs. Whenever possible, time your visits so as to maximize your coverage and reduce your out-of-pocket costs. This isn’t always an option for acute illnesses, but may be possible when scheduling surgery.
BENEFIT PERIODS FOR EVERY MEDICARE AND MEDIGAP POLICY
One way to reduce some of the costs associated with benefit periods is to get a Medigap policy (Medicare Supplement Insurance) or Medicare Advantage plan (Part C). These plans offer more extensive coverage than Original Medicare Parts A & B. They may cover your Part A deductible and coinsurance costs associated with hospital stays and skilled nursing home care.
Since each plan is different, you’ll want to look into how they compare to Original Medicare to see whether it offers more extensive coverage for an affordable premium. Let’s look at how benefit periods differ across each of the main types of Medicare policies:
As we’ve seen above, Medicare Part A covers inpatient care at hospitals and nursing facilities. Once you’ve met your deductible, you’re fully covered for the first 60 days of care and partially covered for 30 days beyond that. Your benefit period will only reset once you’ve been out of the hospital for 60 days. If you’re readmitted to a hospital or SNF within that time period, then your subsequent stay will count toward the same benefit period.
Medicare Part B, which covers doctor’s visits and outpatient care, does not use benefit periods to calculate your coverage. Part B has an annual deductible of $185 per year. Some of the care you receive in a hospital may be covered by Part B (as outpatient care) rather than Part A, so ask your doctor if you have any questions about how your services will be covered.
Medicare Advantage plans don’t generally use benefit periods either. Instead, you pay a flat-rate copayment for a set number of days, after which your costs will be covered. Although each plan is different, many Medicare Advantage plans will cover your Part A deductible entirely, so you won’t have to pay it again each time you visit a hospital.
When comparing plans, be sure to find out what your daily hospital costs will be, and whether or not the same rules apply to skilled nursing home care. Medicare Advantage plans must offer coverage at least as good as Medicare Part A, so if a benefit period applies to SNF stays, it won’t involve higher costs than Original Medicare.
You’ll also be protected by the out-of-pocket maximum, which varies from plan to plan, but can’t be higher than $6,700 as of 2019. Original Medicare doesn’t have an out-of-pocket maximum, so you may pay less for long-term hospital stays on a Medicare Advantage plan.
Medigap policies offer supplemental coverage to fill in the “gaps” in your Original Medicare plan. Because Medigap policies are standardized, it’s easy to look at this chart and find out what they cover. All Medigap plans will cover your coinsurance for hospital stays for 365 days in addition to what Medicare Part A covers. This means that you won’t have to pay out-of-pocket for stays longer than 90 days. Most, but not all, Medigap plans cover skilled nursing home care, and several Medigap plans cover your Part A deductible.
So while Medigap plans don’t do away with all of your Part A expenses, they can decrease your out-of-pocket costs significantly for long-term hospital stays. They provide a full year of hospital coverage beyond what Medicare Part A offers.
Benefit periods can make it difficult to figure out which of your hospital and nursing home costs will be covered by Medicare. Fortunately, benefit periods apply primarily to Part A and are less of a factor if you have a Medigap or Medicare Advantage plan. Always ask your doctor if you aren’t sure which benefit periods your hospital visit or SNF stay will count toward.
If you’re having trouble figuring out whether your care will be covered, or want to sign up for a different plan to reduce your out-of-pocket costs, reach out to the team at the Medicare Store. Just fill out our contact form and one of our licensed insurance agents will follow up with a free 30-minute phone call or to schedule an in-person consultation.
Benefit periods can be confusing, but with a little guidance, you’ll be able to figure out how they apply to your short or long-term hospital care.