I talk to lots of people about Medicare.  One gentleman told me about his $1,258.80 mistake.  He signed up for Social Security and Medicare at sixty-five because he thought he had to.  Started receiving Social Security.  Got his Medicare Part A and Part B card.  Started paying his $104.90 for Part B.  At the end of the year, Jim sat down with him HR person to go over his health benefits.  Jim planned to work until 68 because his wife didn’t work and was on his health insurance.  He saw that he was paying a small amount for his family’s health insurance compared to most group health plans and getting excellent coverage.  He asked his HR person what he needed Medicare for, especially since it was an additional expense of $1,258.80 per year.  She informed him that he probably didn’t since his employer plan covered everything and he is not required to have Medicare Part B, if he has other creditable coverage.  Jim was not happy, but the mistake he made is very common.

Medicare Part B, or not Part B.  That is the question.  People assume that they need to enroll in Medicare Part B because they are required to enroll in Medicare Part A at 65.  Many people don’t understand the differences, the reasons, and the rules.  Medicare Part A is for the hospital and don’t cost anything because it was paid for during your working years.  Part B is for doctor and outpatient procedures.  That does cost something—currently $104.90 per month.  You still have a 20% co-insurance with that, but if you have other coverage that Medicare would deem creditable, you can delay enrolling in Medicare Part B.  There will be no penalty.  You may delay to avoid paying the premium and because the coverage that you currently have through an employer group plan is the same or better than what Medicare would offer.  Or, you have a spouse that needs the employer group health coverage because that person is not eligible for Medicare yet.

The question is: what should you do?  Make a comparison.  Get the details of your employer group health plan: premium, deductible, co-pays, co-insurance, and maximum-out-of-pocket.  Once you have those numbers, then you will be able to make a side-by-side, apples-to-apples comparison between your group plan and your Medicare options.  It may make more sense to go in the direction of Medicare and a supplement or Medicare Advantage than staying on your employer plan, or not.  It all depends on a number of variables.  I help people determine the direction that best fits their needs easily and quickly.

To B or not to B, that is the question.  It requires a little homework and comparison so that you can make an informed decision that will get you the best coverage at the most reasonable cost.

Like most children, I learned to sing the alphabet before I learned to read it. From that humble beginning, language opened up to me. Why does that matter when we’re talking about Medicare? You can’t understand language without first understanding the alphabet. Medicare has a language and an alphabet all its own. 

 

Medicare Part A is the first letter in the alphabet and language of Medicare. A isn’t for apple, however. Part A is for hospital insurance, so how much is Medicare Part A deductible for 2021?

First, we let’s discuss what Part A is and what it covers. 

What Is Medicare Part A?

Medicare Part A covers four areas of care: inpatient hospital stays, skilled nursing facility stays, home healthcare, and hospice.

Inpatient hospital covers, as you might expect, when patients go to the hospital. Patients can go to the hospital for treatment, they may even stay overnight, but they may not necessarily have been admitted as an inpatient. Inpatient hospital is its own category, billing codes, and Medicare costs. A patient is generally not admitted for an inpatient hospital stay unless the condition is serious enough to warrant at least a two-day hospital stay.

Observation in the hospital is not admittance. You are under hospital observation, but you are not an inpatient. Medicare Part A deductible will not cover observation in 2021, and most Medicare Advantage plans (MA plans) will not cover hospital observation, either. However, some MA plans are starting to. 

Check your MA plan’s evidence of coverage before proceeding. Note that a doctor must sign an order for a medically necessary service in the hospital for a person to be admitted as an inpatient.

What Is The Medicare Part A Deductible in 2021?

Part A hospital insurance covers everything during the hospital stay–except doctor’s visits– completely for 60 days, but only after you pay a $1,484 Medicare deductible out of your pocket in 2021, assuming you have no other health insurance coverage.  

Medicare Part A does not have a premium. The 1.45% FICA taxes you paid for Medicare during your working years covers your Part A cost. There is only a deductible, no co-insurance. 

This applies to each 60 days per event benefit period. Note, that it is possible to have multiple unrelated events overlapping within a 60 day period. In that case, you’d pay multiple deductibles. Ouch!

What Is The Medicare Part A Benefit Period?

The Part A benefit period begins the day of admittance and ends when the treatment stops. A new benefit period does not start until you are without inpatient treatment for 60 consecutive days. 

If you are readmitted to the hospital within the 60 days following, the countdown starts again where you left off until you use 60 days.

Medicare Part A Coinsurance Payments Are Covered By?

Once you exceed the first 60 days, you have a co-insurance of $371 per day from day 61-90.  Medicare coinsurance is different from Medicare deductible in 2021.  Again, this is assuming you have no Medigap policy or other health insurance.

Paying the Part A co-insurance amount is rare because most hospital stays end well before the 61st day.

Medicare Deductibles Affect Insurance Costs

It is important to note for those on Medigap policies or even Medicare Advantage that Medicare deductibles impact insurance costs. This extended coverage is the obligation of your Medigap policy or MA plan. Consequently, the insurance company actuaries must factor in the probability of occurrence and cost. 

The cost is transferred to the price of the Medigap plan or co-pays on the MA plan. Many clients wonder why their Medigap plan premium is going up? There are many factors, but when Medicare lowers the amount it will cover, the insurance companies pass on the cost to the consumer.

What Are Lifetime Medicare Reserve Days?

Medicare lifetime reserve days refers to the 60 days a Medicare beneficiary may use once they exhaust the first 60 days of Part A and the additional 30 days with the $371 co-insurance. 

The patient dips into the lifetime reserve days Medicare provides. These days, however, are not free. The coinsurance is $742 per day. Once these 60 lifetime reserve days are exhausted, the patient assumes all costs in the hospital, assuming there is no other insurance.

What Does Part A Cover Besides Hospital?

In 2021 once you have paid the Medicare deductible, Medicare Part A covers hospital stays virtually completely: semi-private room, general nursing, drugs prescribed while in the hospital, supplies, and treatments while an inpatient.  The various areas within the hospital are also covered life ICU (intensive care units), inpatient rehabilitation, inpatient psychiatric facilities, long-term care hospitals.

Does Part A Cover Skilled Nursing Care?

Most people understand Part A is for the hospital. On the Medicare card itself, the card says “Part A Hospital.” However, many people don’t realize skilled nursing care falls under Part A, as well. The rules of coverage and payment are very similar to the inpatient hospital stays. I discuss skilled nursing in another blog. 

Is Home Health Care Covered Under Medicare Part A or Part B?

Home Health Care can fall under Part A. Many people assume it is exclusively under Part B, but there are circumstances when Part A may pay for home health care. 

Generally, beneficiaries and doctors approach home health care from the Part B side of Medicare to avoid the high Medicare Part A deductible and the more restrictive rules of hospital confinement.

What is the Medicare Deductible For Hospice 2021?

Part A covers hospice completely with no deductible. Hospice includes hospice nurses, medications, and counseling. Medicare Advantage plans actually do not cover hospice, rather the beneficiary reverts back to Original Medicare, at least for the hospice care. The Medigap policy likewise does not cover the cost. Medicare picks up the entire tab. 

That being said, there is some confusion about what hospice covers. I had a client’s family member call to cancel her mother’s supplement. Someone in hospice told her because hospice was paying for everything, she could save money by canceling the Medigap policy. But hospice will not cover things like your primary care physician visiting you, a special hospital bed, or other medical treatments that are not life-sustaining but you might prefer. 

Those services fall under Original Medicare and your supplement or your Medicare Advantage plan. For the short time someone is on hospice, I would focus on them rather than a few dollars.

Medicare Part A Deductible Conclusion

I have discussed Medicare Part A as Part A without a supplement or referring to Medicare Advantage. Many Medicare beneficiaries have only Medicare Part A or Part A with Part B. They do not have a supplement, advantage plan, or other insurance. So this speaks to them. 

However, to understand Part A and how it fits within the bigger picture of Medicare health insurance, it is important to understand what it is, what it covers, and what it costs in its various iterations.

If this is confusing–and I don’t blame you for feeling that way–give us a call. Medical expenses can be astronomical. If the correct insurance is not in place with sufficient coverage, costs may surprise and overwhelm you. Not following the eligibility requirements could result in surprise penalties and permanent premium hikes from Medicare. 

Call 402-614-3389 or email [email protected] for a free consultation to make sure all letters of your Medicare alphabet are in place.