Getting Started with Medicare: Part A Essentials

As noted in a previous blog post, Getting Started with Medicare, Original Medicare consists of Part A and Part B. This blog post focuses on Part A, which covers inpatient hospital stays and some other services.

Part A (Hospital Insurance) helps cover:

• Inpatient care in a hospital
• Inpatient care in a skilled nursing facility (not custodial or long-term care)
• Hospice care
• Home health care

For most people, Medicare Part A insurance premiums are zero. Otherwise, beneficiaries pay their share of Medicare Part A covered healthcare costs via deductibles, coinsurance, or copayments.

• Deductible - The amount a beneficiary pays for healthcare services or prescriptions before Medicare or other insurance plans begin to pay.
• Coinsurance – The amount to be paid as the beneficiary's percentage of the total cost for healthcare services after any deductibles.
• Copayment – The set amount to be paid as the beneficiary's share of the cost of healthcare services.

Note that deductibles, coinsurance, and copayments may be different for those with Medicare Advantage Plans, Medigap, Medicaid, or other types of coverage.

The payments beneficiaries make under Part A depend on a "benefit period." A benefit period begins the day of admission to a hospital or skilled nursing facility. It ends when Medicare has not paid any costs for 60 consecutive days. A new benefit period starts with the next hospital or skilled nursing facility admission.

Inpatient Care in a Hospital

Once admitted to the hospital as an inpatient, Medicare covers:

• Semi-private room
• Meals
• General nursing
• Medications while in the hospital
• Other services and supplies

Costs not covered (unless deemed medically necessary) are:

• Private nursing
• Television, phone, internet access
• Personal care items like deodorant or slipper socks
• Private room

Of the inpatient hospital care costs, the beneficiary pays:

• Benefit Period Days 1-60: Deductible only
• Benefit Period Days 61-90: Coinsurance
• Benefit Period Days 91 and over: Coinsurance for each "lifetime reserve day"*

*For hospital stays over 90 days, Medicare Part A will pay for costs (less coinsurance) for a lifetime maximum of 60 days.

Costs for doctor's services are covered under Medicare Part B.

Inpatient or Outpatient?

It might seem obvious to assume a person receiving healthcare services in a hospital is an inpatient. That's not always the case. It's an important distinction because Medicare pays inpatient and outpatient costs differently. Also, a minimum three-day inpatient hospital stay might be the only way Medicare will pay for follow-up skilled nursing care.

An inpatient is defined as someone who is officially admitted on a doctor's order. However, a person could be in the hospital but still be classified as an outpatient if they receive emergency or observation services, lab tests, or imaging procedures (e.g., MRI).

It is crucial for patients or their families to ask every day of a hospital stay whether the patient is an inpatient or outpatient that day. The person to ask could be the doctor, patient care advocate, or hospital social worker.

Sometimes outpatients are under observation in the hospital, so the medical staff can decide to admit them as an inpatient or discharge them. Those under observation should receive a Medicare Outpatient Observation Notice. The notice explains the outpatient status and how it impacts the amount a patient pays for hospital and post-hospital costs.

Inpatient Care in a Skilled Nursing Facility

Medicare pays for 100 days or less of skilled nursing care under certain circumstances. The services covered are:

• Semi-private room
• Meals
• Skilled nursing
• Therapy (e.g., physical)
• Medications while in the facility
• Other medically necessary services and supplies

Medicare will not cover costs if the only services needed after a hospital stay are assistance with daily activities. These are such things as bathing, dressing, and toileting. These will be covered if rendered during a medically necessary stay in a skilled nursing facility. However, they will not be covered if delivered as stand-alone services.

Obtaining skilled nursing care coverage depends on the "three-day rule". Medicare will only pay for doctor-ordered temporary skilled nursing care if the patient has been in the hospital for three consecutive days (not including discharge day). This rule may not apply if the patient receives Medicare benefits through a Medicare Advantage Plan or an Accountable Care Organization (ACO). Participants in an ACO can obtain a 3-day waiver.

Of the temporary (100 days maximum) skilled nursing care costs, the beneficiary pays:

• Benefit Period Days 1-20: $0 (see note)
• Benefit Period Days 21-100: Coinsurance
• Benefit Period Days 100 and over: All costs

Note: A Medicare Advantage Plan may require copayments during Days 1-20.

Hospice Care

Medicare Part A will cover hospice care for the terminally ill if a doctor certifies the patient has six months or less to live. Patients in hospice must agree to comfort care only instead of services intended to extend life.

Covered services are:

• Pain and symptom management
• Medical, nursing, and therapy services
• Aide and homemaker services
• Spiritual and grief counseling

Some additional details about hospice care:

• Services can be delivered in a facility or at home.
• Medicare will still pay for costs of illness or injury not related to the terminal illness.
• For hospice care delivered in a facility, costs such as room and meals are not covered unless deemed necessary to manage pain or other symptoms.
• Medicare Part A will cover up to five days of "respite care" in a Medicare-approved facility. This allows the regular caregiver to get a break.
• Hospice care can continue after six months if the medical staff determines the patient is still terminally ill.
• Unlike inpatient hospital and skilled nursing facility stays, Medicare Part A hospice care coverage is not organized by benefit periods.

For most hospice care costs, the beneficiary pays nothing. However, pain and symptom management medications have a $5 copayment for outpatients. Also, beneficiaries pay 5% of Medicare-approved respite costs.

Home Health Care

Medicare Part A (and Part B) covers medically necessary part-time or occasional services at home. A doctor or healthcare professional must certify that the patient needs such home services. In addition, the services must be provided by a Medicare-approved agency.

Covered services are:

• Nursing care
• Therapy (e.g., physical)
• Part-time aides
• Durable medical equipment (e.g., hospital bed)
• Medical supplies

Medicare home care coverage does not apply to:

• Full-time (24-hour) care
• Meal delivery
• Household services not related to the care plan, like cleaning or laundry
• Help with daily activities (bathing, dressing, etc.) not related to the care plan if that is the only care needed

Like hospice care, home healthcare is not organized by benefit periods. The beneficiary pays nothing for most covered costs, but a 20% coinsurance amount is payable for durable medical equipment costs.