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Matt,

What is a Medicare Benefit Period?  How much will I have to pay if I have a hospital visit with Original Medicare Insurance? I’ve heard from my friends that this can be very costly! Help!

Nancy C.


Nancy,

If you’re “Bare with Medicare” meaning, you only have Original Medicare Part A and Part B without a Medigap, Supplement or Medicare Advantage plan, here’s how the costs break down. 

According to Medicare, a Benefit Period begins the day you’re admitted as an inpatient in a hospital or Skilled Nursing Facility (SNF). The benefit period ends when you haven’t gotten any inpatient hospital care (or skilled care in a Skilled Nursing Facility) for sixty days in a row.

If you go into a hospital or a Skilled Nursing Facility after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. In 2022, the deductible is $1,556 per benefit period, and this amount normally increases every year. However, there’s no limit to the number of benefit periods during any given year.           

Got that? A Medicare Benefit Period is not an annual deductible, so you actually could pay that deductible more than once during a calendar year.                

After you’ve paid your benefit period deductible, after a certain number of days in a hospital or Skilled Nursing Facility, you’ll also have to pay a copay every day. Don’t worry about memorizing these numbers; just know they’re there and they change, but not drastically.

 

Estimates on What You’ll Pay for Your Hospital Stay with Medicare Insurance               

If you’re hospitalized, you’ll first pay $1,556. That covers your hospitalization bills up to sixty days.                  

If you stay between 61-100 days, divide the deductible by four— you’ll be charged another $389 per day. (I agree with you, that’s quite a bit of money!) If you stay beyond 100 days, divide the deductible by two—days 101 to 150 will cost you $778 per day.                 

Anything over 150 days, you’ll be on the hook for 100% of the charges. Yikes!               

If you’re hospitalized for psychiatric care, the benefits are slightly different. You have a 190-day lifetime benefit and some coverage changes. Go to PrepareforMedicare.com/links for links to more information.

 

What Medicare Covers for Skilled Nursing Care                                          

As mentioned above, Part A also covers Skilled Nursing Facility care. This is not Long-Term Care Insurance. Medicare does not cover Long-Term Care Insurance. It also does not include “custodial care,” which is care provided for things called “Activities of Daily Living.” These are essentially things you need to do to care for yourself, such as eating, bathing, and moving around.                 

As such, Skilled Nursing Facility care isn’t meant to be a long-term solution for patients. Think of it as an in-between step sometimes taken from the hospital to home, or from the hospital to a Long-Term Care facility.

If you’re in a Skilled Nursing Facility for under 21 days, you’ll pay $0. For days 21-100, you’ll pay up to $194.50 co-insurance per day (as of 2022 rates). Staying more than 100 days, you’re now on the hook for 100% of your services!

 

What are the Costs for Staying in a Hospital or Skilled Nursing Facility Over 100 days?                 

What are the odds you will stay in a Skilled Nursing Facility for over 100 days? Very low. But even if you stay in for say, forty days, the quick math there is twenty days X $194.50 = $3,890. That’s in addition to anything you might owe from your prior hospitalization. Oh, one more thing. To get into a Skilled Nursing Facility, you’ll first have to be an inpatient at a hospital for three days. Yep, this means you’ll pay that deductible for the hospital stay in addition to the cost of the Skilled Nursing Facility care, so add the $1,556 on top of that number. 

This catches many people Bare-with-Medicare or who are on a Medicare Supplement plan by surprise. If there’s not a prior three-day stay in a hospital, Medicare won’t approve a Skilled Nursing Facility stay, which can financially expose you to the entire Skilled Nursing Facility bill.       

Truthfully, a $1,556 deductible for a hospital stay is a pretty decent insurance benefit. Those of you coming off of an employer-sponsored plan probably had deductibles well above that when you were working. However, this amount is less out of your pocket for an inpatient hospital visit than many Medicare Advantage plans will charge you. It’s the sixty-one or more days that should rightfully scare you.

Quick Math: if you stay hospitalized for 100 days, you’ll owe the $1,556 deductible plus 40 X $389 = $17,116. Yikes! If you stay 150 days, it will over $55,000. Yikes again!                

What are the odds you’ll be in the hospital for more than 100 days and still be alive? Probably pretty low. Still, in my opinion, this highlights one of the major “Frustrating Flaws” of Original Medicare, and it comes up time and time again. There is no “stop-loss” or “Maximum Out Of Pocket (MOOP).

 

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Author Bio Matt Feret is the author of the Prepare for Medicare book series and launched prepareformedicare.com to help people get objective answers to questions about Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.