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The Ins and Outs of Medicare

In July of 1965, President Lyndon Johnson signed Medicare into law, thus creating a health insurance program for the elderly. The program was designed to provide a benefit for both hospital and medical insurance. Medicare usually comes in two parts, Medicare Part A and Medicare Part B. Both of these parts make up Original Medicare. Some of the services provided by each part are as follows:

Medicare Part A Medicare Part B

- Inpatient hospital care - Outpatient care, x-rays, bloodwork, etc.

- Skilled nursing facility care - Outpatient care, x-rays, bloodwork, etc.

- Short-term nursing home care - Doctor visits

- Hospice - Mental healthcare

The best way to differentiate between Parts A & B is to remember that Part A will cover the cost while inside a building, room and board and the care you receive inside. Part B will cover what happens outside, things like doctor visits, outpatient procedures, and medical equipment.

Generally, those that qualify for Social Security benefits will also qualify for Medicare benefits at age 65 or also for spouses that may not qualify based on their own record. For those that do qualify, Part A coverage does not have a premium but is subject to deductible for each benefit period. Part B does require a monthly premium starting at $135.50 or higher based on your income. Under most circumstances, your Part B premium will automatically be deducted from Social Security income if you’re collecting benefits. Part A does require some coinsurance by you based on a “benefit period” defined by the way the Original Medicare program measures your use of inpatient hospital and skilled nursing facility (SNF) services. It begins the day that you enter a hospital or SNF and ends when you have not received inpatient hospital or Medicare-covered skilled care in a SNF for 60 days in a row.

Medicare does not cover any type of long-term care, whether in nursing homes, assisted living facilities or people’s own homes. Of course, it covers medical services in these settings, but not the cost of staying in any long-term care facilities or the cost of any “custodial” care — that is, help with the everyday tasks of life, such as dressing, feeding, going to the bathroom — except for very limited circumstances when a person receives home health services through a Medicare-approved agency.

Medicare does, however, provide coverage for short-term stays in skilled nursing facilities — which are, very often, nursing homes. You would go to a skilled nursing facility (SNF) for specialized nursing care and rehabilitation work after spending time in the hospital. But, if you’re enrolled in the original Medicare program, to get coverage for an SNF you must have spent at least three days in the hospital as a formally admitted inpatient.

This condition is extremely important. The hospital can formally admit you as an inpatient — or it can place you into “observation status.” In both cases, you are lying in a hospital bed, eating hospital food, and being attended to by hospital doctors and nurses. But any days spent under observation do not count toward the three-day inpatient requirement that you need for Medicare coverage in an SNF. Also, your hospital stay will be paid for under Part B, not Part A, which could increase your costs. When you enter the hospital, you must be told whether you’re being properly admitted or are under observation. If the latter, you may want to appeal to your doctor to see if you can be transferred to inpatient status.

· It usually doesn’t apply to people enrolled in Medicare Advantage plans (such as HMOs or PPOs)— so best to check with your plan.

· It affects only coverage in a skilled nursing facility. If you’re discharged from the hospital to another kind of facility for specific ongoing care, such as a rehabilitation hospital, Medicare provides coverage under different rules. *the previous information provided by

When Medicare was first enacted, life expectancy in the U.S. for women was 73.8 years and 66.8 years for men. In 2019 that number has increased to 81.6 and 76.9 respectively**. So as we’re living longer and relying more on Medicare for health costs, careful planning is needed to protect all you have worked for and accumulated.

With the help of your Strategic Tax and Retirement planner, and utilizing our patent-pending planning Retirement Positioning Software (RPS) we will work together to create a plan involving comprehensive Medicare planning. Call us today to schedule your no-obligation consultation.



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