In previous columns, we’ve discussed nine specific causes that could prevent us from receiving long term care benefits from Medicare. I’ve even suggested that the list be posted on your refrigerator, so that it’s readily available for your spouse or care-giver, should you need hospitalization for any reason. I feel that it’s extremely important that everyone on Medicare have this information before an accident or illness occurs. Let us know if you need a copy.
The first cause on the list reads like this: “Have you been hospitalized as an inpatient for at least 3 days? This does NOT include your date of discharge. This does NOT include days spent in the hospital while UNDER OBSERVATION.”
Medicare came into existence in 1966. Generally, there is no charge for Medicare Part A, which includes hospitalization costs. Nearly every person enrolls for Part A when they qualify and there is a penalty charged if they wait and then enroll later. Why not enroll? There is no fee. The time a patient spent in the hospital was largely determined by the doctors and the hospital. That’s why people used to spend weeks and even months in the hospital for their care. With no financial responsibility delegated to the patient and the full brunt of the costs in the hospital being covered by Medicare, it couldn’t continue to exist. I remember hearing that congress had originally budgeted 8 billion dollars for the first 10 years. Before the first 5 years were completed, the cost of the new Medicare plan had exceeded 80 billion dollars.
The first major change by Medicare was the introduction of “DRG’s. As I recall, Medicare put out a book of Diagnostic Related Groups which listed all the possible illnesses, injuries, and combinations thereof, for which a person may need hospitalization. This has obviously been amended and modified through the years. I think it’s impossible to predetermine what needs any person might have in the future, especially when you factor in age, pre-existing conditions, and general health.
Long gone are the days of completing your recovery in a hospital bed. Today, it’s common to hear that patients are going home “sicker and quicker”. The plan seems to be getting the patients discharged as soon as possible. Where do they go? If they’re unable to care for themselves at home, they may need home health care services, or to placed in some form of assisted living or nursing home care. These can be very expensive decisions.
When you first look at your Medicare part A benefits, it appears, that the Skilled Nursing Home benefit should resolve that issue. As you look further, you find that all the qualifications are usually not met by most people needing after hospital care.
Now the problem becomes “observation care”. A person can enter a hospital because of an emergency and/or by the directive of a physician. The time spent in the emergency room doesn’t count toward future Medicare covered skilled nursing home care. When a doctor requests that a patient go to a hospital for care, he may have little to say as to whether the patient is admitted or is placed under observation. The patient may spend his entire time in the hospital under observation and be released, without ever knowing the total care was given while under observation. I know of situations where patients had surgery in the hospital and were never formally admitted.
Once again, the primary reason for observation care is cost. It costs the federal government considerably less for a patient to be under observation rather than being admitted. Admission falls under Medicare Part A and after the deductible has been satisfied, most hospital costs are fully covered for 60 days. Emergency room costs and observation costs, including surgeries, fall under Medicare Part B. These costs are subjected to an annual deductible and then to a 20% copayment of the costs that Medicare approves. Medicare pays accountants to look over the shoulders of hospital administrators and retrieve from the hospitals billing costs for any errors in their judgments.
Once again, the patient loses. Often, they receive bills upon discharge from the hospital for thousands of dollars that they thought were covered. The same holds true for patients being discharged to a skilled nursing home that they thought was fully covered by Medicare and later being billed for all the costs.
I know this sounds terribly complicated, and it is! At this time, the rules regarding whether to admit or observe are not specific enough and interpreted by the decision makers in different ways depending on the hospital, the state, and each set of circumstances.
My suggestion is to ask questions. If you’re incapacitated, ask a friend to go with you and ask questions. When I was taken to the emergency room last year for double pneumonia, I was ultimately taken to a hospital room and received all the care I had received years ago for the same illness. Only when I asked, did I learn that I was under observation. The care was the same. After two days, I found out that I had been admitted. I had the same room and the same care. I never signed any additional paperwork. My doctors and nurses were the same. I could not see any changes in anything, including my condition. It had actually improved and after four days I was discharged. I went home, but if I had needed skilled nursing care, I would have been declined Medicare coverage, because part of my time was listed as “under observation”.
Was it just a coincidence? I tend to think not. My Medicare supplement picked up all of the Medicare Part A and Part B copays and deductibles. If I weren’t in the insurance business, I probably would never have known how I “dodged a bullet”. If we can answer any questions or help with your insurance needs, just call us.
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.