The “Benefit Period.”

Benefit Period. What is it exactly? Medicare beneficiaries are aware that it exists but do they actually understand how it works?  From my experience with seniors, most that are enrolled don’t.

Medicare defines the Benefit Period as “ The way thatOriginal Medicare measures your use of hospital and skilled nursing facility (SNF) services.  A benefit period begins the day you’re admitted as an inpatient in a hospital or skilled nursing facility.  The benefit period ends when you haven’t received any inpatient hospital care (or skilled care in a SNF) for 60 days in a row.  If you go into a hospital or skilled nursing facility after one benefit period has ended, a new benefit period begins.  You must pay the inpatient hospital deductible for each benefit period.  There is no limit to the number of benefit periods.”

Confusing?… I know, I agree.  Do not worry though, I will explain further so you understand what your rights and entitlements are.  This is one of the few problems I have with the insurance industry; the use of unclear terminology that is communicated and misunderstood by consumers for whom the product is meant to benefit.  If you do not work in the insurance industry, it becomes foreign language to you.  Unfortunately, that is the point.  The less you understand, the better chances an insurance company has of taking advantage of you.  It is quite heartbreaking and pathetic.  It still frustrates me that insurance companies, not all of them mind you (but most), prey off of the uninformed. Yes, they do provide members with what is called the Summary of Benefits (SOB) but it is comprised of nothing but insurance jargon.  If you don’t comprehend the lingo, then the explanation of benefits that you are paying for become confusing to understand.  (Because of this widespread issue, Medicare has called for the use of general terminology in explaining benefits of the SOB)   This misunderstanding can lead to a variety of problems down the line that can have devastating financial consequences for the beneficiary.

Now, let’s start from the beginning.  Medicare is comprised of two parts, A & B.  Part A covers your hospital (inpatient care), skilled nursing facility (SNF), hospice (a special way of caring for individuals who are terminally ill) and home health care (only covered by Medicare on a limited basis as ordered by your doctor).  Part B covers your Medical, like primary care physicians/specialists, outpatient services, etc. The benefit period only applies to Part A of Medicare.  This is how it works….

Say in January you are hospitalized for a couple of days overnight for a condition; your benefit period doesn’t begin until you are released from the hospital. Now, since you stayed overnight, you would be responsible for Medicare’s Part A deductible of $1152, and all other expenses regarding your stay are paid for by Medicare.  However, this is where things get confusing.  Medicare uses the terminology of ‘benefit period’ to explain hospital stay and what the beneficiary is responsible for financially.  Disregard that.  It only makes things more confusing and you won’t get a clear picture as to what the benefit period is and how it works.  So, that being said… Medicare Part A will cover all costs except for $1152 of your first 60 (consecutive) days in the hospital.  After that, days 61-90 you, the beneficiary are responsible for $289/day and Medicare covers the rest.  Days 91-150 you are responsible for $578/day and Medicare covers the rest. However, be aware that days 91-150 are your lifetime reserve days (60) WHICH YOU ONLY GET ONCE.  THESE DAYS CANNOT BE RESET, UNLIKE THE BENEFIT PERIOD.

So, again, what exactly is the benefit period?  Well, the benefit period is the time (60 days) in which a beneficiary can be released from an overnight stay in the hospital and be re-admitted without having to pay the Part A deductible.  What that means is simply this…. As I stated earlier, for example, you are hospitalized for a few days in January.  You pay your Part A deductible.  When you are released you have 60 days in which for any reason, whether it be the same or different cause for your first hospital stay, if you are admitted you will not be subjected to pay the Part A deductible.  If you go for more than 60 days consecutively (from your initial release) without being admitted overnight, the next hospital stay you have you will need to pay the Part A deductible again.

This unfortunately is where forecasting one’s own medical expenses for the year can be very difficult.  We cannot predict the future, and because of this uncertainty, we need to be fully knowledgeable of what expenses we could incur in an ‘off, or health-wise’ drastic year.   It is quite possible for a beneficiary to pay the Part A deductible 3 times in a year. That’s $3,456.  Have you planned for the worst-case scenario?  If you haven’t, I suggest you take a look at what type of plan you currently have because outside of the deductible, you may have other expenses you need to be aware of.  (There are a few Medicare plans out there that do take care of the deductible for you)  If you have to dip into those allocated funds, how are you going to supplement the other facets of your health care management, like prescription drugs or copayments, etc?

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