Medicare’s Hospital Insurance Plan

Medicare was originally initiated to provide health benefits and coverage for America’s senior citizens. The original program contained two parts, Medicare Part A and Medicare Part B. Medicare was designed to cover individuals 65 years or older with medical insurance for doctor and hospital visits. Medicare Part A was specifically designed to cover hospital expenses and can be difficult to understand.

Medicare Part A covers inpatient hospital procedures that include at least an overnight stay. Beneficiaries are covered for semiprivate rooms, meals, required tests, and doctor’s fees. Part A will also cover brief stays in a skilled nursing home for convalescence, provided that certain criteria are met. Those criteria include:

• A hospital stay beforehand of at least three days and three nights, not including the discharge date.

• A stay in a nursing home must be the result of a problem diagnosed at the hospital or the cause of the hospital visit.

• A patient has another ailment that requires skilled nursing attention.

• The stay must be at a nursing home that provides skilled supervision and attention. Custodial, non-skilled, and long-term care facilities and programs are not covered.

Medicare Part A’s coverage of nursing homes is not all inclusive however; there are guidelines to the coverage that are important to understand to avoid costly charges. Part A will help cover up to 100 days in a skilled nursing facility, but there are out of pocket costs for patients. Part A will fully cover the first 20 days of a stay in a nursing home. After the first 20 days, the remaining 80 days will be partially covered by Medicare Part A along with the patient having to make a co-payment out of pocket. As of 2009 the average co-pay was $133.50 per day. Medicare Part A’s 100 day clock can be reset if a patient goes 60 days between stays in a skilled nursing facility.

While Medicare Part A provides senior citizens with vital health insurance coverage and assistance, it does not remove all the costs involved with health insurance. Individuals covered under Part A face premiums, deductibles, and coinsurance that must be paid out of pocket. Recent studies, notably one from the Kaiser Family Foundation in 2008, have found that Medicare’s benefit package is less generous than those provided by large employers or the Federal Employees Health Benefits Program. However, under Medicare Part A the majority of those eligible do not pay a premium as a result of already paying taxes under the Federal Insurance Contributions Act for at least 10 years. Individuals eligible for Part A who have not met the 10 year requirement can purchase Part A coverage for a monthly premium. The following premiums would apply to those who have not met the 10 year requirement:

• A $254.00 per month premium applies to those who made contributions under FICA during 30-39 previous quarters.

• A $461.00 per month premium applies to those who made contributions under FICA in less than 30 quarters.

Part A coverage does contain deductibles and co-payments that must be made by the individual receiving the insurance coverage. Eligible individuals must pay a deductible of $1,068 (as of 2009) for the first 60 days of hospital service. Beyond that point, co-payments apply on a per-day basis for different periods of the stay. Days 61-90 of a hospital stay require a $267 per day co-pay (as of 2009) and days 91-150 require a $534 per day co-pay (as of 2009). Beyond 150 days Medicare Part A will not cover hospital stays, leaving the payment fully the responsibility of the individual.

The Medicare Part A system is an imperfect system, like many, and is capable of being defrauded. Part A uses a prospective payment system to pay hospitals and skilled nursing facilities for the services rendered to Medicare recipients. Hospitals are paid a set amount of money per each instance of hospital care a covered individual receives, regardless of the amount of money required. The amount of money given to the hospital is dependent upon a list of diagnosis-related groups, with the primary diagnosis at the hospital determining the actual amount. If a less serious diagnosis is made, and therefore less money is spent by the hospital rendering services, the institution retains the extra money instead of returning it to Medicare. If the individual is diagnosed with a more serious condition while in the hospital, the hospital is responsible for covering any extra costs that Medicare does not. This can often lead to doctors making an extreme diagnosis from the outset to guard against the hospital being left to pay for the rest of the services that will be rendered.

Medicare Part A is a portion of a greater Medicare program that is designed to provide senior citizens with quality, reliable health coverage they can afford during their golden years. As a program, Medicare covers not only hospital stays and related costs (Part A), but also covers general medical insurance for check-ups, exams, and testing (Part B) as well as prescription drug charges (Part D). While Medicare has been slammed as a step closer to Socialism taking root in America, it was a necessary step to take to provide senior citizens with health insurance. Medicare arose in the 1960s as a result of senior citizens being unable to afford increasingly expensive health coverage from private companies. A publicly funded program was seen as the best option to provide for those who could not afford to provide for themselves.