How Medicare Benefit Periods Work
If a beneficiary has ever needed the services of a hospital or skilled nursing facility, they may have heard the phrase “benefit period.” This is an important concept in Original Medicare, especially if they have a great need for inpatient care. So, what is a benefit period, and why is it so important?
What is a Benefit Period?
A benefit period is the amount of time a beneficiary uses their Medicare coverage for an inpatient care facility, like a hospital or skilled nursing. A benefit period starts when they enter the facility and their coverage begins. It continues until they have ceased to receive care for 60 consecutive days.
If a beneficiary leaves an inpatient facility, but reenters one before 60 days have passed, the benefit period continues. So, if they leave the hospital but are back in after a week, it’s still the same benefit period. Even if they are out of the hospital for 59 days, it’s still the same period.
On the other hand, if they leave a facility, but reenter a facility on the 61st day, a new benefit period will begin. There is no limit on how many benefit periods they can have. That said, if a beneficiary needs inpatient care, do not try to wait it out until they enter a new benefit period. Health is more important than saving some money.
Why Is It Important?
Benefit periods are so important because they define the costs of a beneficiary’s coverage. Whenever a new period begins, they will pay an inpatient deductible. This deductible is $1,484 in 2021. For the first 60 days of their benefit period, their care is covered by Medicare Part A. After 60 days, they will pay a daily coinsurance for their inpatient care. In 2021, these daily costs are $371 for days 61 to 90 in a hospital and $185.50 for days 21 to 100 in a skilled nursing facility.
If beneficiaries do go over 90 days at an inpatient facility, they may still have coverage. Everyone on Original Medicare has 60 lifetime reserve days. These reserve days kick in on the 91st day of their stay at an inpatient care facility. These coinsurance costs are $742 each day for 2021. Once the bank of reserve days is used up, the beneficiary is responsible for the full costs. The bank does not replenish in a new benefit period either.
For example, in one benefit period, a beneficiary spends 120 days in the hospital, using 30 reserve days. The next year, they spend another 120 days in a skilled nursing facility, using the 30 remaining days. A few months later, they slip and break their leg. Over the course of the hospital stay and rehab, they spend 100 days in the hospital. Days one to 60 will still cost nothing once they meet the Part A deductible, and the coinsurances for days 61-90 will stay the same (though they may change between years). But after that 90th day, the beneficiary is responsible for the full cost of their inpatient care.
Do I Have Other Options?
If a beneficiary wants extra help with their inpatient care, there are options they can look into. One is a Medigap plan that covers hospital or skilled nursing facility coinsurance. All Medigap plans will cover Part A coinsurances and hospital costs for a year after Medicare benefits end. Most plans will also cover at least a portion of skilled nursing facility care coinsurances. Only Plans A and B offer no coverage, while Plans K and L offer a percentage (50 percent and 75 percent respectively).
It may also be worth investigating a Medicare Advantage plan. Many Medicare Advantage plans offer some form of hospital or skilled nursing facility coverage. This coverage differs from plan to plan, though.
If a beneficiary finds themselves admitted to an inpatient care facility, it’s reassuring if they know their Medicare plan will cover their needs. Understanding what is covered, and when it’s covered, is critical to ensuring they are never caught with shock charges. Therefore, knowing benefit periods is so important.
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