I’ve used this column through the years to send up warning flares regarding potential pitfalls within our readers’ health insurance programs. Some I have previously addressed. As today’s message will show, some bear repeating. As I discover others, I’ll share these additional concerns, and possible solutions with you, as we all make our way down this winding mysterious path we know as Medicare.
When Medicare first became available in 1966, the cost to most seniors was affordable, the deductibles were nominal, the co-pays were minimal, and the care that was provided was pretty good for that day and time. If you got sick and needed hospitalization, you’d be admitted to the hospital of your choice by the doctor you knew and trusted. If you needed a specialist, you and your doctor decided which one would be the best one for your special needs. The doctor(s) and hospital treated you until you could be released and sent home. How long that took was left up to the doctors and the hospitals. After all, they were the professional caregivers. Who knew better than they, the best course of action for your recovery?
Medicare picked up the bulk of the costs and from day one, Medicare supplemental coverage was available to cover most of the residual costs. It was a good, solid, and cost effective way to cover medical expenses both in and out of the hospital.
In 1965, when Congress approved the Medicare bill, they projected the cost to the federal government the first 10 years would be about 8 billion dollars. Long before the end of the first 10 years, the costs had exceeded 80 billion dollars. How could their projection be so wrong? They’ve been going back to the drawing board ever since. Just one of the many examples is the hospital deductible. In 1966, the deductible for admission into the hospital was $40.00. Today it’s $1316.00! This is not an annual deductible, but one that could be charged several times in one calendar year.
It gets worse. In 1983 Medicare introduced “DRG’s”. 542 Diagnostic Related Groups in which Washington projected the number of days it should take for someone to recover in the hospital from 542 different types of illnesses, injuries, or combinations thereof, in advance of the occurrence. Instead of being released from the hospital to go home, many were released to nursing homes or care centers where they would continue their recoveries in far less expensive settings than a hospital bed.
Some might say, “That’s no problem. Medicare pays nursing home benefits.” Indeed, some people do qualify for Medicare Skilled Nursing Home Care. If you do qualify for these benefits, the daily room costs are paid in full for 20 days. If you continue to qualify, your daily co-pay for the next 80 days has jumped from just $5.00 per day in 1966 to $164.50 per day in 2017. After 100 days, even if you qualify under their very stringent rules, no benefits would be paid. You’re on your own.
Let me share with you why most people do not qualify for Medicare’s Skilled Nursing Home Care in the chart below. I’ve suggested in the past that you cut this out of the newspaper and hang it on the front of your refrigerator door or some other conspicuous location. Should you become disabled and unable to make important decisions regarding your healthcare, your caregiver will need this information.
Over and over again, I’ve talked to patients and their families who have discovered during nursing home confinement or at the time of discharge that they did not meet one or more of these requirements and that they are responsible for the full cost of the care. If Medicare doesn’t approve the bill, supplemental insurance can’t supplement it. This can represent thousands of dollars that patients don’t have and can cause severe financial difficulties for the patients and their families. It doesn’t help the recovery process either. Next month we’ll look at some options that may be available to some of us. As always, if we can be of assistance, just call our office.
Orion Steen is a licensed agent and specializes in Medicare supplemental plans. He has been advising his clients on life and health insurance matters in Arizona for over 45 years. He can be reached for related questions by E-mail at firstname.lastname@example.org, call toll-free 888-846-6891 or cell 623-846-6891.