Social Security benefits were increased by 1.7% for 2013. Of course, the costs associated with Medicare also increased for 2013, taking away most of the benefit of that 1.7% increase. What the government gives with one hand it takes away with the other.
Medicare is a federal health insurance program for elderly and disabled individuals. Medicare has several co-pays and deductibles. In this article, I want to discuss the skilled nursing facility co-payment.
A skilled nursing facility is, what most of us would call, a nursing home. There are two, primary reasons that people go to nursing homes. They either go for rehabilitation or for long-term custodial care.
Long-term custodial care is a nursing home stay that is indefinite in duration. In other words, the resident will, in many cases, live in the nursing home until the day he dies.
Rehabilitative care is typically short term care. In many cases, the patient is progressively getting better during his rehabilitation and expects to leave the nursing home in short order. For instance, Mr. Smith breaks his hip. After his surgery at the hospital, Mr. Smith enters a skilled nursing facility (or nursing home) and receives rehabilitation for his newly-mended broken hip. He may receive rehabilitation for a week or two before going home.
Medicare will pay for rehabilitative services in a nursing home. Per spell of illness, Medicare will pay for up to 100 days of rehabilitation in a nursing home.
A “spell of illness” is a term of art used in the Medicare law. A Medicare beneficiary can have many spells of illness during his life, but in order to start a new spell of illness, there must be a sixty day period of time during which the Medicare beneficiary is not receiving Medicare services.
For example, Mr. Smith breaks his hip, has surgery at the hospital, and rehabilitation at the nursing home. Mr. Smith then goes home. Four months later, Mr. Smith breaks his other hip (or perhaps the same hip). Since there has now been a greater than sixty day lapse in Medicare coverage, Mr. Smith has entered a new spell of illness and is entitled to a new 100 days of rehabilitation coverage.
If Mr. Smith broke the other hip (or the same hip) thirty days after leaving the nursing home and going home, he would not have a full 100 days of coverage. The 100 days would be reduced by however many days Mr. Smith already utilized in the same spell of illness. If, for instance, he was in the nursing home for fourteen days during his first stay, he would only have eighty-six days of rehabilitation remaining in this spell of illness, even though the second injury may be completely unrelated to the first injury.
The 100 days of coverage is a maximum. A Medicare beneficiary may or may not receive the full 100 days of coverage. The only guarantee is that he will not receive more than 100 days per spell of illness because that is the maximum amount of coverage.
For days one through twenty, Medicare pays 100% of the costs of the rehabilitation. For days twenty-one through one hundred, there is a co-insurance payment that the Medicare beneficiary is responsible to cover.
The co-payment typically increases every year, and 2013 is no exception. This year, the co-payment increased from $144.50 per day to $148 per day, meaning that in days twenty-one through one hundred the Medicare beneficiary must pay $148 per day for his care.
Many policies of health insurance pick up this co-payment. There are several policies of health insurance called Medigap policies that are specifically designed to fill in the gaps (co-payments and deductibles) of the Medicare program. Many Medigap policies cover the skilled nursing facility co-insurance payment.
Changes to Medicare costs can catch people off‑guard, especially when planning for health and long‑term care. Staying informed about how premiums and out‑of‑pocket costs work helps you make smarter decisions — now and in the years ahead.