Q. What does a “hospital benefit period” mean? I’m about to go into the hospital for major surgery and will need rehabilitation therapy afterward. I’m concerned about how long Medicare will pay for my care.
A. A hospital benefit period is one of those aspects of Medicare coverage that many people find especially difficult to understand. Which isn’t surprising. You’d think that a benefit period would simply be a length of time during which Medicare would cover your care if you’re admitted to the hospital.
But it doesn’t work like that. A benefit period begins on the day you’re admitted and ends when you’ve been out of the hospital for 60 days in a row.
So if you’ve left the hospital on a certain day, and are then readmitted before 60 days from that date is up, you’re still within the same benefit period. But if you go back into the hospital after that 60th day, you’re then in a new benefit period. The difference between the two has an impact on your costs.
The issue is complicated by the fact that any time spent in a skilled nursing facility—where you may go for continuing care or rehab services after your discharge from the hospital—counts toward a benefit period but has slightly different rules and costs. Also costs in benefit periods may be different depending on whether you’re enrolled in the traditional Medicare program or in a Medicare health plan.
Hospital coverage in traditional Medicare
Here is what you pay and what Medicare pays for hospital care in each separate benefit period:
- You are responsible for the first slice of hospital bills—up to a maximum $1,216 in 2014. This is the Medicare Part A hospital deductible—which, unlike other deductibles, applies to each new benefit period and not just to your first hospital stay of the year.
- Once you’ve paid that deductible, Medicare picks up the rest of the tab for hospital care (bed, meals and nursing services) for a stay of up to 60 days after admission. If you stay in the hospital for all of this time, or are discharged sooner but return during the same benefit period (even for a different medical problem), you pay nothing further for this care. (But you pay for physicians’ care and certain other services under your Part B benefits—usually 20 percent of the Medicare-approved costs.)
- If you need to spend more than 60 days in the hospital—whether consecutively or because of readmission—during the same benefit period, you pay a daily copayment for days 61 through 90. In 2014 this copay is $304 a day.
- Beyond 90 days of inpatient hospital care in the same benefit period, you are responsible for 100 percent of the costs. However, Medicare allows you a further 60 days of “lifetime reserve” days. This means that for the rest of your life you can draw on any of these 60 days—but no more—to extend Medicare coverage in any benefit period. In 2014, your share of the cost is $608 a day. But if you have any type of Medicare supplemental insurance (also known as medigap), your policy covers an additional 365 life-time reserve days, with no copays.
Once you’ve been out of the hospital for 60 days, you start a new benefit period if you need to be admitted again, even if it’s for the same illness or injury that took you there before. And with each new period, you get the same benefits and pay the same set of charges as above, according to how long you need hospital care. This includes paying the Part A deductible again, unless you have a medigap policy that covers it.
There is no limit to the number of benefit periods you can receive in general hospitals for any kind of inpatient care. However, if you are hospitalized in a specialized psychiatric facility for mental health care, Medicare covers only 190 days in your lifetime. (See: “Ask Ms. Medicare: Medicare’s Coverage of Mental Health Services.”)
Perhaps one source of confusion over benefit periods is that three of the rules involve a time frame of 60 days, yet each has a different meaning. So to be clear, here’s a quick cheat sheet:
- 60 days = the number of days you must have been out of a hospital or skilled nursing facility in order to qualify for a new benefit period.
- 60 days = the maximum length of time that Medicare will cover 100 percent of your care in a hospital after you’ve met the deductible for each benefit period.
- 60 days = the maximum number of lifetime reserve days that you can draw on to extend Medicare coverage for hospital care in any one benefit period.
Skilled nursing care in traditional Medicare
Under the traditional Medicare program, you must spend at least three days in the hospital as an officially admitted patient before Medicare will cover your stay in an approved skilled nursing facility (SNF) for further needed care such as continuing intravenous injections or physical therapy. The time spent in both the hospital and the SNF count toward a benefit period. And you must have stayed out of both for 60 days to qualify for a new benefit period.
But your share of the costs in a skilled nursing facility is different from those listed above for hospitals. In such a facility, in any one benefit period you pay:
Nothing for your bed, board and care for days 1 through 20.
A daily copayment ($152 in 2014) for days 21 through 100.
All charges beyond 100 days.
You cannot use any hospital lifetime reserve days to extend Medicare coverage in a skilled nursing facility beyond 100 days in any one benefit period. However, you may get more coverage if you have a medigap policy, long-term care insurance, coverage from Medicaid or insurance from an employer or union. You need to check with your plan to see what skilled nursing charges are covered.
If you’re enrolled in a Medicare health plan
Medicare Advantage health plans (such as HMOs and PPOs) also use Medicare’s benefit periods. But their charges for hospital and skilled nursing care not only vary widely from plan to plan but may be very different from those in traditional Medicare. Here are a few examples among health plans in 2014 that illustrate the variations:
Plan 1 charges a flat $500 copay for each hospital stay and $350 for a skilled nursing facility stay, with no limit to the number of days in any one benefit period.
Plan 2 charges $250 a day for the first five days in the hospital and nothing more for up to 90 days in any one benefit period. For a skilled nursing facility stay, it charges $10 a day for the first 10 days and $85 a day for days 11 through 100.
Plan 3 charges $300 a day for the first seven days and nothing more for up to 90 days in any one benefit period. For a skilled nursing stay, it charges nothing for the first five days, $150 a day for days 6 through 20 and nothing for days 21 through 100.
Almost every Medicare Advantage plan has different charges. Also, plans may have different rules from those in the traditional Medicare program. Most plans, for example, don’t require you to spend three days in the hospital before being admitted to a skilled nursing facility.
If you’re enrolled in one of these plans, check your coverage documents or call the plan to be sure what a hospital or nursing facility stay would cost and what the rules are.
Patricia Barry is a senior editor for AARP Integrated Media and the author of “Medicare For Dummies” (Wiley/AARP, October 2013).
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