Be Careful with Medicare's Conflicting Hospitalization Rules

As people age, the need for some type of long-term care service increases dramatically. The need for shorter rehab services also increase. However, Medicare’s confusing rules regarding hospital stays can cost individuals large sums of money for some of this care that is paid by Medicare.

Most people know Medicare, and Medicare supplements will only pay for skilled long-term nursing services, including rehab. They will not pay for anything beyond 100 days or for custodial or memory care services. What people are less aware of are the hospital stay rules which will impact if Medicare will pay for their 100 days.

The Medicare rules require patients must spend three nights as a hospital inpatient to qualify for inpatient rehabilitation or skilled nursing care once they're discharged. However, another regulation encourages hospitals to keep patients on observation status or risk being audited. This would place the cost of the care on the individual. If the person has Long-Term Care Insurance, that policy will pay if the care is expected to last at least 90 days. However, many policies have a 90 day elimination period or deductible. Those days would normally be “eliminated” as health insurance or Medicare pay their days. If Medicare isn’t paying then the full costs are placed on the person.

Read this first-hand experience on Medicare.

You and your family should be aware of what these rules are and be an advocate for yourself or your loved one. Always remember that Medicare is not designed to pay for long-term care but will pay for a limited amount of skilled care but only if you, and your doctor and hospital, follow the rules.

Prior to retirement be sure you put in place a plan to address the financial costs and burdens of aging. Since the need for extended care is likely an expensive an affordable Long-Term Care policy will become a key part of your retirement planning. 

Start by seeing what the cost of care is in your state. Your state might be one of 44 who participates in the Long-Term Care Partnership Program. These qualified policies provide additional dollar-for-dollar asset protection. Tax incentives may also be available.