We have all been traveling and have found ourselves party to a conversation because of proximity or bad cell phone etiquette. Some of these conversations are irritating, but I was looped into an interesting one the other day. Sitting in the Charlotte airport, two older men who looked like they were returning from a golf vacation started talking about enrolling in Medicare. One had just done it and the other had lots of questions. The recent enrollee said that he had registered through the Social Security web site; it took only ten minutes and was very easy. He told the other man that he only needed to sign up for part A, not for part B.
That’s when the stream of misinformation started. Not understanding what Medicare covers and what it doesn’t cover, and not enrolling in part B insurance will certainly result in negative consequences for many seniors.
Fundamentals of Medicare
Using the online application to sign up for Medicare does take less than 10 minutes: I tried it. Social Security will process your application and contact you if they need more information. Otherwise, you’ll receive your Medicare card in the mail. Medicare is managed by the Centers for Medicare and Medicaid Services (CMS). Social Security works with CMS by enrolling people in Medicare.
If you are already getting Social Security retirement or disability benefits, you will be contacted a few months before you become eligible for Medicare and given the information you need. If you live in one of the 50 states or Washington, DC, you will be enrolled in Medicare Parts A (hospital) and B (medical) automatically. However, because you must pay a premium for Part B coverage, you have the option of turning it down.
If you are not already getting retirement benefits, you should contact Social Security about three months before your 65th birthday to sign up for Medicare. You can sign up for Medicare even if you do not plan to retire at age 65.
Part A: (Hospital Insurance) Premium
- Most people get Part A automatically when they turn 65. They don’t have to pay a monthly payment (a premium) for Part A because they or a spouse paid Medicare taxes while they were working for at least 40 quarters.
- You will need to pay $441.00 per month ( in 2013) if you haven’t met the work requirement.
- If you had 30-39 quarters of Medicare covered employment you will pay $243.00 a month.
Part B: (Medical Insurance) Premium
- The standard Medicare Part B monthly premium will be $104.90 in 2013, which is a 0.5% increase over the 2012 premium. If your income is above $85,000 (single) or $170,000 (married), your premium may be higher.
- Your monthly premium increases 10 percent for each 12-month period you were eligible for, but did not enroll in, Medicare Part B after age 65.
- Some people do not take Part B during their Initial Enrollment Period (IEP) because they or their spouse are still working and they have primary insurance from a current employer. You should talk to your employer when you become eligible for Medicare to see how your employer insurance will work with Medicare, especially if the business has fewer than 20 employees.
- If you have insurance from a current employer, you qualify for a Special Enrollment Period. This Special Enrollment Period allows you to enroll in Part B at any time while you or your spouse are still working; and for up to eight months after you lose your employer coverage or stop working.
- It is important to remember that COBRA and retiree insurance do not qualify for a Special Enrollment Period.
What Medicare pays for in 2013: Not everything!
Part A (Hospital Insurance):
Deductible: $1,184.00 (Per Benefit Period)
Coinsurance: ( you pay even after your deductible is met)
- $0 for the first 60 days of each benefit period
- $296.00/day for days 61 – 90 of each benefit period
- $592.00/day for days 91 – 150 for each lifetime reserve day (total of 60 lifetime reserve days; non-renewable).
Skilled Nursing Facility Coinsurance
- $0 for the first 20 days of each benefit period
- Up to $148.00/day for days 21 – 100 of each benefit period
- All costs for each day after day 100 of the benefit period.
Part B (Medical Insurance):
This covers physician fees and outpatient services, which includes observation stays.
Deductible: $147.00 per year, but you also pay 20 percent of the Medicare approved amount for Medicare approved services even after you meet the $147.00 deductible.
When does a hospital stay not count as a hospital stay, and why should I care?
Faced with financial penalties and the threat of painful RAC (Recovery Audit Contractor, who receives a portion of the collected fine as payment) audits, many hospitals err on the side of caution, accepting the much lower observation payment if there is any question about the decision between observation and inpatient status. We call them “invisible patients.” We put them in beds, feed them, give them medications, perform tests, and provide care (for a fraction of what we would be paid for a hospital admission), but they never show up in our census and they don’t count toward graduate medical education direct or indirect support.
Why does this occur? Sometimes there is delay in making the diagnosis, which is key in the determination of admission. In other cases, the patient has no one to care for them at home (or has an equally frail elderly spouse) and much of the time in observation is spent trying to find the right environment to discharge them to. Because of these and other reasons, around the country, the number of patients held for observation rose — in some institutions more than 25 percent — as hospitals tried to hold down first-time admissions that might lead to readmissions and their associated financial penalties.
However, if patients are held for “observation” without being formally admitted to the hospital,they don’t qualify for payment under Part A; this falls under Part B. Woe to the people who decided they didn’t need Part B. Even if they have Part B, these patients have to pay 20 percent of all approved Medicare services.
Even more confusing is the fact that Medicare requires patients to have a 72-hour “qualifying hospital stay” in order to receive coverage for follow-up care in skilled nursing facilities. Unfortunately, some patients are transferred to skilled nursing facilities and because they were never officially admitted, Medicare will not cover any of the nursing home costs. Even if you have a Medigap supplemental policy, they also will not pay the out-of-pocket costs of services that Medicare will not cover.
The new IPPS rule (released last Friday) says that an admission is reasonable for those beneficiaries who are in the hospital for one day (defined by two midnights) during which they are receiving medically necessary services. It remains to be seen if this increases or decreases the confusion around the definition of justifiable hospital admissions.
The Center for Medicare Advocacy and the National Senior Citizens Law Center filed a petition against Health and Human Services Secretary Kathleen Sebelius and named seven patients as plaintiffs. They ask for declaratory, injunctive, and mandamus relief in the U.S. District Court in the District of Connecticut.
What is the solution?
Educate, educate, educate. Educate yourselves as providers. Not knowing is not an excuse anymore. Understanding Medicare is an important part of understanding the systems of care.
Don’t think your parents and patients will learn all they need to know from friends or conservative TV shows!
Watch the outcome of the class action lawsuit. Hopefully it will solve the “invisible patient” problem. That said, Medicare is an incredible benefit for senior citizens, but it is important to understand what it covers and what the implications are.