Medicare Out of Pocket
Original Medicare provides broad healthcare coverage for senior citizens and those with certain disabilities in the United States. It consists of Part A, which is hospital insurance, and Part B, which is medical insurance. It is a fee-for-service health plan managed by the federal government. Learn what Medicare out of pocket expenses beneficiaries should expect.
For many people, it is a relief to qualify for Medicare. It is guaranteed healthcare coverage and the costs do not increase based on age like so many other insurance plans. The ability to get coverage also does not change based on any pre-existing conditions. However, there are costs associated with this service. Deductibles, premiums, co-insurance, and more can all cost a surprising amount. For people on a fixed income, it is particularly important to be aware of the following 5 out-of-pocket Medicare expenses.
Doctors who do not participate in Medicare
While it is rare, there are doctors who do not accept Medicare insurance plans for payment. This becomes a problem when beneficiaries need to see a specialist, as there are often fewer of those to choose from in their area. This issue is compounded if they need to see one sooner rather than later. These providers will nearly always cost more out-of-pocket than a participating provider in Medicare.
Providers that do not accept assignment
There are also providers and facilities that do accept Medicare for payment but they do not accept assignment. Assignment is the agreed-upon amount that Medicare will pay for a service, exam, or procedure. Doctors or other healthcare providers who do not accept assignment do not accept Medicare’s standard rates and may charge up to 15% more for their services.
Doctors who operate outside of a Medicare Advantage plan network
While Original Medicare has a nation-wide network of providers that are covered, Medicare Advantage plans are far more local. That means that if a provider does accept Medicare but is not within the beneficiary’s Medicare Advantage network, the beneficiary could still be paying more in cost-sharing for any services they receive. There are protections in place that do not allow those doctors who are out-of-network to charge more than they would under Original Medicare, however.
Inpatient versus observation stays in a hospital
Contrary to popular belief, staying overnight in a hospital does not mean that someone is admitted to a hospital, meaning they are not inpatient. Inpatient hospital stays are covered under Original Medicare through Part A (hospital insurance) and 20% Part B coinsurance for any physician services. If someone is placed under observation, however, they are responsible for 20% of any services they receive. That can add up very quickly.
Three day rule
Leaving the hospital does not mean someone is ready to go home. Often, people are transferred to a skilled nursing facility (SNF). If the beneficiary was in the hospital for three days as an inpatient, then Medicare will only cover a short-term stay in a SNF. If the person’s stay does not meet those requirements, they could be required to pay for a SNF stay on their own, out-of-pocket.
These are some of the possible unexpected major costs for Medicare beneficiaries. It makes financial sense to learn more about these and take steps to plan for the possibility that out-of-pocket costs could be higher than originally thought.
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