Medicare Part A

One Dollar Down

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Also happiness, health, and chance distress.

by Purdy Conrad

Medicare Part A: Hospital

Part A of Medicare covers inpatient services such as the hospital and the nursing home. Most people receive Part A of Medicare automatically when they turn age 65. Generally, there is no charge for Part A because it was paid for during ones working years by paying into the Social Security fund. Each of us pays Medicare taxes when we work. For those who did not work, they may collect Medicare Part A through their spouses work record.

For those who did not work and do not have a spouse that worked, they may still be able to buy Part A.

In the hospital, Medicare will pay for:

{ A semiprivate room

{ Operating and recovery rooms

{ Intensive care units

{ General nursing care by the hospital staff

{ Laboratory tests, X-rays and other radiology services

{ Radiation therapy

{ Drugs furnished by and taken in the hospital

{ Medical supplies, such as casts, splints and surgical dressings

{ Appliances, such as a wheelchair

{ Rehabilitation services, such as physical and occupational therapy

{ Speech pathology

{ Costs of special units, such as coronary care

All of these in-hospital services must, of course, be in a Medicare approved facility.

Part A of Medicare, called Hospital Insurance, will pay no more than 190 days for psychiatric care in a participating hospital. Those 190 days are a lifetime benefit, which means that, once used, the benefit never renews. In other words, once used, the benefits are gone. There are additional benefits available through Part B of Medicare for psychiatric care.

Not Covered by Medicare Part A

There are types of services that will not be covered under Part A of Medicare. Some of these items may be covered under Part B of Medicare. Not covered under Part A of Medicare:

Doctors fees

Private duty in-hospital nursing care

Extra charges for a private room if it is not medically necessary

Personal convenience items, such as a TV rental

The first three pints of blood

Expenses often incidental to hospitalization, such as domestic help at home

Custodial or personal care services in or out of a hospital or nursing home.

The amounts covered are specific regarding Part A of Medicare. In a hospital, Medicare will pay the full bill after a deductible amount is met. Those deductible amounts do change from year to year.

The first day deductible, once met, is good for 60 days. That means that a person could enter a hospital, be discharged a few days later, be readmitted within that 60-day period and be released again from the hospital all on that first deductible payment.

Less than one percent of the Medicare population will ever stay in the hospital continuously for more than 60 days. As a result, even though the deductible and co-payments continue through 150 days, few people will use those benefits from the 61st day through the 150th day. Even so, those benefits do exist.

Benefits under Medicare in the hospital:

Benefit Period:	Medicare Pays:
1-60 days	All except the first day deductible
61-90 days	All except the daily co-payment
91-150 days	All except the daily co-payment
Beyond 150 days	Nothing

To have the hospital stay covered by Medicare, the following conditions must be met:

1) The doctor must prescribe the hospitalization.

2) The type of care required can only be met in a hospital.

3) The hospital is Medicare approved (most hospitals are).

4) The Peer Review Organization (PRO) does not deny the stay.

Medicare Part A: Home Health Care

Medicare Part A also pays for home health care services. There is often much confusion regarding this type of care. In order for Medicare to cover care at home, a patient must qualify under Medicare's guidelines. If these guidelines are met, Medicare will cover:

Part-time skilled nursing care

Physical therapy

Speech Therapy

If one or more of these items are required, then Medicare Part A will also pay for:

Part-time services of home health aides for skilled nursing care

Medical social services

Medical supplies and equipment provided by a Medicare contracted agency

Occupational therapy

Some items are not covered by Medicare's Part A home health care services. These items include:

Doctor fees

Full-time nursing care at home

Drugs and biologicals

Meals delivered to the home

Homemaker services, such as cleaning or cooking

Blood transfusions

Generally daily maintenance care, such as bathing or getting dressed

The amount of visits are unlimited if the patient meets all the Medicare requirements. The patient pays nothing since Medicare will cover all eligible costs. There are conditions, which must be met before care will be given. Those conditions include:

1) A doctor must certify the need for home care.

2) The treatment requires only part-time (not full-time) skilled (not custodial or intermediate) nursing care, physical, speech or occupational therapy.

3) The patient is housebound, unable to do an outside normal routine of shopping and so forth.

4) A doctor sets up a home health care plan which is provided by a Medicare contracted home health care agency.

Everyone Wants To Stay at Home

If you were to take a poll, it is likely that the majority of our elderly population would tell you that they would prefer to stay at home as opposed to entering a nursing home. This is not hard to understand. Unfortunately, this is not always a realistic option. Sometimes it is not realistic due to health conditions, but all too often it is not realistic simply because there is no one available to help out. Staying at home often requires some type of help with daily chores, such as cooking and cleaning, as well as some types of personal care.

Is care at home an option for most people? US News and World Report magazine reports that nursing home admissions have gone up 40 percent since the DRGs were put into effect in 1983. Another aspect of the quicker hospital discharges is an increase in families and friends who are attempting to take care of the patients at home. Often spouses are at an age where they, as the major caregiver, are not strong themselves. While it may begin with just one sick person, the situation can quickly become one of two sick people, neither spouse able to care for the other one.

Millions of Americans are doing everything they can to keep at home chronically ill parents, spouses or even children. Most do succeed. Seventy percent of home care is provided by family and/or friends. However, many of these people desperately need some sort of help. As family members become increasingly tired and perhaps even frail, the physical work of taking care of a sick person becomes more than the family can bear, reports Bruce Fried, who is the director of citizen coalition groups seeking health care reform.

Government Paid Home Care

There has grown a national debate over the role of paid home care in the nation's long-term care system. While many people would like to expand the availability of home care services through federal health care programs, the biggest block to such a move is the cost. The debate sharpened during the summer of 1988 when Congress wrestled with the Long-Term Home Care Act introduced by Representative Claude Pepper (D-Florida). Pepper hoped to expand Medicare to provide a range of home care and social services for chronically ill people.

The bill ran into numerous problems. It was finally sidetracked in the House. Part of the problem was procedural. The bill had by-passed two committees and gone directly to the House floor for a vote. Many lawmakers were concerned with the lack of review of potential costs and administrative problems.

A Big Price Tag

The bill's troubles also reflected deeper concerns that still exist today. The biggest concern was money. The bill was projected to cost $28 billion over five years, which would have been from 1989 to 1993. Many critics said it would have run even higher. Even so, there is much support for some type of bill, which would cover care at home. Americans overwhelmingly want to stay in their own homes rather than going to a nursing home. Averting institutionalization is not easy when the family's energy finally runs out.

Over 11,000 agencies nationwide are licensed to give paid home care. There are many more people who are paid home-care givers that are not licensed. It is a rapidly growing industry. The groups provide services ranging from high-technology care, such as kidney dialysis to simple custodial care and personal care. Homemaking services may also be provided. Such care is costly. It may easily run $2,000 per month or higher, depending upon the level of care that is required.

Buying An Insurance Policy

Although there are some excellent policies, which will help defray the costs of care at home, not many consumers own them. Most health care professionals feel it is important to first have a good policy, which will cover the costs associated with care in a nursing home. Then, if there are extra funds available in the family budget, purchasing a home care policy might make sense.

For those who want the protection of care both in an institution and at home, an integrated policy is probably the best choice. This type of policy deals with a pool of money. That pool of money may be directed to whatever type of care is covered under the policy and that the attending physician approves. There may be daily limits imposed, such as $100 per day. Integrated policies are more expensive, but since they cover a wide variety of options, the extra cost is generally considered worthwhile.

Medicare Will Only Pay For Part-Time Home Care

Medicare is little help with home care. Medicare picks up the tab only for intermittent (part-time) skilled nursing care, physical therapy or speech therapy, which is prescribed by a doctor for homebound persons. Home care advocates feel Medicare would pay less money, keeping people at home versus the amount Medicaid (Medi-Cal in California) eventually pays to keep people in the nursing home. Once a person has spent all of their own assets, Medicaid steps in and picks up part or all of the costs in the nursing home. Advocates for home care point out that a nursing home will cost at least $36,000 per year where part-time home care might be maintained for as little $12,000 to $15,000 per year, depending upon necessary services.

The Woodwork Effect

Not everyone agrees on these figures. Some researchers say home care can be just as costly as a nursing home; especially where a hospital setting must be provided at home with the type of equipment that is sometimes required. This is especially true when a person needs around the clock care rather than part-time care (which is the only type currently provided through Medicare). Other critics also point out that the costs of a federally funded home care program would be very unpredictable financially. The reason is something called the "woodwork effect." Families and friends that are now handling the care of an ill person (and therefore do not show up as currently needing federal help) would "come out of the woodwork" to apply for paid federal help replacing the currently unpaid family care.

How Medicare will pay for home care is always a concern for senior citizens. Medicare will cover home health care for part-time (intermittent) skilled nursing care, occupational therapy when used as part of a rehabilitative program, physical therapy and speech therapy. To receive this type of home care, the patient must be classified as homebound. "Homebound" is often referred to as "housebound." Both terms are correct and interchangeable. Only when the patient is homebound may home care be received. The classification is quite strict. The patient must be really confined to their home, unable to get out even to go grocery shopping. A doctor must prescribe the home care; the patient or the patient's family may not simply call and request it for convenience.

Many things do not qualify for home care. General household services such as cleaning, meal preparation, and shopping are not covered by Medicare. Neither is custodial nursing care at home. Only the level of care called skilled is covered by Medicare.

If the classification of homebound is met and the patient does qualify for home care, other items are then covered. Social services, medical supplies and 80 percent of durable medical equipment, such as walkers and crutches, are covered. Home health care agencies must be certified by Medicare in order to be covered. Many home care agencies are NOT Medicare certified, even though they may provide excellent care. As an agent, when offering a home care policy for sale, be certain that the area has a certified home care agency available. Most insurance policies also require that the agency giving the care be certified by Medicare in order to be covered under the terms of the policy.

Caregivers

The skills and experience of home caregivers can and do vary widely. Home care is not always the best medical solution. For some people, a nursing home really is the best answer. If, however, home care is a workable course of action, careful assessment of the home care needs will make the transition from the hospital to home go smoother. The needs of one person may vary greatly from the needs of another person. Types of care may include a licensed professional nurse, a licensed therapist for occupational, speech therapy or physical therapy, consultations with a dietitian, or a specialist in respiratory or ostomy care. For those patients with chronic conditions, a home health aide or homemaker to help with bathing, dressing and eating may be all that is needed.

A patient has the right to choose his or her own home health care service organization even when Medicare or Medicaid is paying the bill. Even when the patient chooses the agency, however, that agency must sill meet Medicare's and Medicaid's requirements in order for the bill to be covered.

Ultimately, home care advocates say, expansion of home care cannot be avoided. That may be, but the cost still remains as the major block to any federally funded program for home care. When Congress again looks at the issue (and it seems to come up often), the question will still be "What benefits for whom and who is going to pay for it?"

Medicare Part A: Hospice Care

Also covered under Part A of Medicare is Hospice care, which is care for the terminally ill. There is a co-payment for the beneficiary of up to $5 for outpatient prescription drugs and 5% of the Medicare-approved payment amount for inpatient respite care. Respite care is short-term care given to the patient by another care giver so that the regular care giver may have a break. The costs of respite care can change each year.

Any services received under Hospice of Medicare must meet the requirements set forth by the Department of Health and Human Services. Services provided include:

Medical social services

Nursing care provided by a registered professional nurse

Physical or occupational therapy

Speech-language pathology

Short-term inpatient care, including respite care (respite care is limited by Medicare's guidelines of no more than five days in a row and the patient must pay five percent of the cost)

Drugs, including outpatient drugs for pain and symptom control. The patient must pay for a small portion of the costs.

Medical supplies

Services of a home health aide

Physician services

Counseling services are covered only when it is part of a "core service" provide directly by a hospice certified agency.

As with all benefits under Medicare, certain requirements exist. To be eligible for Hospice care under Medicare, the patient must:

1) Have been diagnosed as terminally ill, having only six months or less to live, and

2) Receive the care from a Medicare contracted Hospice program.

Medicare Part A: Skilled Nursing Home Care

Medicare will only pay for nursing home care if the level of care required is skilled. When the care level is skilled, Medicare will pay for a semiprivate room, meals, skilled nursing personnel and rehabilitative services. There must first be a hospital stay of no less than three days in order to qualify for skilled nursing home care under Medicare.

Although Medicare will pay up to 100 days of skilled nursing care in a skilled nursing facility, there are co-payments which either the patient or the patients insurance company must cover from the 21st day through the 100th day. Medicare offers no benefits following the 100th day. During the first 20 days, there are no co-payments under Medicare.

To qualify for nursing home care under Medicare, the following conditions must be met:

1) The doctor must certify that the care is necessary.

2) Skilled nursing or skilled rehabilitation services are received on a daily basis.

3) The facility is Medicare approved.

4) The stay may not be disapproved by the facility's Utilization Review Committee or a designated Peer Review Organization (PRO).

5) The care must be "rehabilitative." In other words, the care must be designed to improve the patient's physical condition.

In reality, Medicare is not designed to pay benefits for a long-term confinement in a nursing home. This is made obvious by the fact that only 100 days has any coverage at all, and then only for skilled nursing care. Neither Intermediate nor custodial care is covered at all by Medicare or by Medicare supplemental insurance policies. In fact, only two percent of the time will Medicare actually pay anything, since they only pay for skilled care. Many people in nursing homes require intermediate or custodial care, which is not covered at all by Medicare.

Average Nursing Home Stays

According to the US Department of Health and Human Services, the average length of stay in a nursing home is 456 days. Some sources may state as long as two and a half years and this is understandable. Fifty percent of all nursing home stays are for just three months or less, which has pulled down the "average" figure used by the Department of Health and Human Services.

Long term care, while a very real threat to many Americans, is still something many consumers are just now considering. Long-term care policies are, therefore, a relatively new market. This is rapidly changing as more and more people become aware of the financial dangers.

Nursing Home Riders In Life Insurance Policies

Since runaway costs are a concern to the families of our senior Americans, as well as to the elderly themselves, we are seeing some new variations in other types of policies attempting to benefit from the opening market. Some of the more recent marketing riders are offered through life insurance policies.

For a two percent to ten percent higher premium, the insurer will pay part of the death benefit to the policy-owner each month until the benefit is exhausted or a preset maximum is reached. If the policyholder dies before the benefit is exhausted, the remainder of the benefits will go to the beneficiaries named in the life insurance policy.

Many companies are joining this concept in marketing their life insurance. These riders, however, do not often take effect immediately and sometimes put a limit on how much can be collected. One product requires premium to be paid in for at least three years first and then only delivers 48 percent of the death benefit. Some insurers require hospitalization first or even three to six months in a nursing home before the policyholder can begin collecting benefits.

A Growing Consumer Interest

Long-term care insurance is now becoming one of the fastest growing insurance markets. The coverage offered, however, can be very confusing. Some states have set minimum standards for nursing home policies, but many states have not yet done so. Since the federal government has now entered the picture by creating tax qualified policies, the coming years should see many changes in how policies are structured.

Medigap policies supplement Medicare.

If Medicare does not cover the medical service,

the Medigap policy will not cover it either.

Medigap policies that supplement Medicare will cover in a nursing home only if Medicare does. That means that Medigap policies, like Medicare, will only cover skilled care, not intermediate or custodial. That is precisely why it is necessary for consumers to purchase long-term nursing home policies.

Expected Long-Term Care Needs

Ten years ago they were estimating that about 7.7 million Americans over the age of 65 would need some type of long-term care. As we continue to lengthen our lives, that figure continues to grow. Long-term care refers to the type of maintenance care given on a day-in, day-out basis. People who are chronically ill or disabled are especially likely to need this type of care. Those over the age of 85 are the highest risk group. In fact, statistics show that 22 percent in this age group are already in a nursing home. At the same time, it is estimated that two out of five people who are 65 or older risk entering a nursing home. This is a risk that simply cannot be ignored. More than half of those who enter a nursing home will need to stay only 90 days or less, with about 40 percent remaining in the facility for approximately 2.5 years. Insurance is, by definition, a way to share the risk with other people. Sharing the risk of a nursing home confinement makes a lot of sense. To enter a nursing home uninsured is very costly indeed.