Medicare is a US-based health insurance program for people aged 65 or above, younger people with certain disabilities, and people with end-stage renal disease.
Medicare uses the term “benefit period” to refer to the organized coverage it offers for inpatient hospitals and skilled nursing facilities.
However, the concept of a benefit period often causes confusion. Before you enroll yourself into a Medicare plan, it’s crucial to understand a benefit period and how it impacts your health insurance bills and out-of-pocket costs.
Let us look into the Medicare benefit period, how it impacts services, and how you can make wiser decisions to make the most of your Medicare coverage.
Medicare Benefit Period
Medicare benefit period is the way Original Medicare measures the use of inpatient hospitals and skilled nursing facility services by beneficiaries.
The beginning of your benefit period is marked by the day you enter a hospital or skilled nursing facility (SNF), and it ends when you haven’t received inpatient care or skilled nursing services in SNF for 60 days in a row.
Conclusively, your benefit period is not tied to a calendar year. Instead, it starts upon entering a hospital and ends when you don’t receive care in the hospital or nursing facilities.
If you’re required to go into a hospital or an SNF after your benefit period ends (more than 60 days after you left), then a new benefit period begins.
Thus, Medicare has unlimited benefit periods but they renew upon leaving the hospital or facility and not returning upon 60 days.
How Does the Benefit Period Work?
Since the benefit period measures inpatient hospital and skilled nursing facility services received by beneficiaries, it also impacts the cost. Before each Medicare benefit period, you must pay for your Part A deductible.
Once you pay your Part A deductible, the following 60 days of your inpatient hospital care is covered with no daily coinsurance. But after the 60 day period, you must pay a daily coinsurance depending on the number of days you stay at the hospital.
For example, you are admitted to a hospital on October 3rd, and you are discharged on October 12th, spending a total of 9 days at the hospital. Then, after a period of recovery at home, you find yourself needing inpatient hospital care again, so you are admitted on December 2nd (50 days after your first discharge within the same benefit period), and you stay at the hospital for 5 days, until December 6th.
Since you did not exceed the 60-day threshold outside of the hospital, you remain within the same benefit period. Consequently, you do not have to pay for another Part A deductible to start a new benefit period.
Also, your hospital stay from December 2nd to December 6th counts as days 10-14 of in-hospital care. Thus, you are not subjected to paying a daily coinsurance that typically applies for days 61-90 of your hospital stay.
Medicare’s Benefit Period Coverage & Cost
The timing of hospital stays has a significant impact on the cost incurred by Medicare beneficiaries. Therefore, it’s vital for you to understand the scope, coverage, and cost of a benefit period to manage your out-of-pocket costs.
Coverage
Medicare’s benefit period provides the following coverage in case of inpatient hospital care and skilled nursing facility (SNF) services.
| Skilled Nursing Facility (SNF) | Hospital |
|---|---|
| Skilled nursing care services | Semi-private room |
| Physical/occupational therapy | Meals |
| Speech-language pathology services | General nursing |
| Medical social services | Hospital services |
| Medication | Hospital supplies |
| Medical supplies | |
| Medical equipment | |
| Dietary counseling | |
| Ambulance transportation |
Costs Associated With Benefit Periods
At the beginning of your benefit period, you have to pay Part A deductible for your hospital stay. In 2023, the Medicare Part A hospital deductible was $1556, which covered the cost of the first 60 days of Medicare-covered inpatient hospital care per benefit period.
After the 60 day period, a daily coinsurance applies for days 61-90. Beneficiaries have to pay this coinsurance as an out of pocket expense everyday.
Beyond the 90-day period, an even higher daily coinsurance payment applies to each “lifetime reserve day” per benefit period.
When you use all your lifetime reserve days, you cover the entire cost of your hospital stay. Here is a summary of the payments you make per benefit period in 2024.
| Beginning of Benefit Period | $1,632 Part A deductible |
| Days 1–60 | $0 after meeting your Part A deductible. |
| Days 61–90 | $408 as daily coinsurance. |
| After day 90 | $816 coinsurance amount everyday while using your 60 lifetime reserve days. |
How Do 60 Lifetime Reserve Days Work?
If you want to extend your Medicare benefit period, Medicare offers you 60 lifetime reserve days. For example, if you have used your 90 days of inpatient hospital care but need to stay longer, Medicare will cover a total of 60 lifetime reserve days.
For these reserve days, you pay a daily coinsurance. But these days are not replenished, meaning once used, you will not regain them upon entering a new benefit period. Thus, any hospital stay for more than 91 days is counted as a lifetime reserve day.
In 2024, this costs $800 per lifetime reserve day. Once your lifetime reserve days are exhausted, you have to make out-of-pocket payments for your hospital stays.
But you can have access to extra lifetime reserve days through a Medicare Supplement plan, also called Medigap.
These are private health insurance plans that don’t directly pay for medical services, but they assist in cost coverage for medical needs through deductibles, copays, and coinsurance. Every Medicare supplemental plan provides 365 extra lifetime reserve days.
How Does a Benefit Period Help Medicare Beneficiaries?
Since the Medicare benefit period is a structured and organized way to manage the cost associated with inpatient hospital care and skilled nursing facilities, it provides assistance to beneficiaries in resetting their deductible under Medicare Part A multiple times a year.
Moreover, the benefit period also helps beneficiaries plan their healthcare needs effectively. This ensures that the beneficiaries are financially prepared for the coinsurance, deductibles, and copayments associated with their future hospital stays, providing beneficiaries with more clarity.
Planning for Healthcare Services With Silveredge
As the concept of the benefit period is unique to Medicare, it’s crucial for beneficiaries undergoing medical treatments to understand how it works. Frequent hospitalizations can increase out-of-pocket costs.
But a comprehensive understanding of Medicare benefit periods, deductibles, and coinsurance can not only help save your money but also provide you with the peace of mind regarding future healthcare services.
But with the evolving policies, it’s more important than ever to stay informed about benefit periods. Silveredge provides guidance through the maze of Medicare, leveraging industry expertise through licensed agents to help you make more cost-efficient informed decisions. Seamlessly optimize your healthcare coverage through Silveredge’s assistance!
