Patricia Barry - Medicare For Dummies

Like many other insurance plans, Medicare treats care for mental health disorders differently from other health problems. This kind of discrimination is less common than it used to be in Medicare, but some limits are still placed on mental health benefits, as described in the following sections.

In the past, traditional Medicare charged more than twice as much for seeing a mental health professional as an outpatient than for seeing any other kind of doctor — co-pays of 50 percent of the cost of a visit rather than 20 percent. But since 2010, under a law passed in 2008, those co-pay costs have gradually come down. Today, you pay the standard 20 percent co-pay for outpatient psychiatric care, and Medicare pays the rest, as long as you see a participating provider. If you have Medigap insurance, these co-pays are covered. If you’re in a Medicare Advantage plan, you pay what your plan requires.

The 2008 health-care law didn’t change a discriminatory situation in which Medicare patients are limited to 190 days over their lifetime for receiving inpatient treatment in psychiatric hospitals — those that specialize in mental health conditions. Yet Medicare places no such limit on care in general hospitals. So any days you spend in a non-psychiatric hospital — even if you’re being treated for a mental health condition — don’t count toward the 190-day lifetime limit.

Whether you receive mental health care in a psychiatric or a general hospital, the Part A hospital deductible and co-pays are the same as those for other medical conditions. These costs are explained in Chapter 3.

In some circumstances, Medicare covers partial hospitalization, which means receiving treatment at a hospital’s outpatient department or clinic or at a community mental health center during the day, but not spending the night there. Your costs for this type of service vary according to the treatment provided, but under Medicare rules it can’t be more than 40 percent of the Medicare-approved amount.

For more details, see the publication “Medicare & Your Mental Health Benefits” at www.medicare.gov/Pubs/pdf/11358-Medicare-Mental-Health-Getting-Started.pdf .

Because mental health benefits may vary among Medicare Advantage plans, look at the evidence of coverage documents for your plan. But most plans stick to the same limit of 190 lifetime days for inpatient care in a psychiatric hospital.

Medicare Part B covers physical therapy (PT), speech-language pathology (SLP), and occupational therapy (OT). Previously, Medicare limited the amount of coverage you could get for therapy services in any given year as an outpatient or in a hospital outpatient department or emergency room, known as the therapy cap; however, in 2019, Medicare removed the cap, covering outpatient therapy at 80 percent of the Medicare-approved amount. When you receive services from a participating provider, you pay a 20 percent co-pay after you meet your Part B deductible, which in 2020 is $198.

These dollar limits are the total cost of the services received in a year — including what Medicare pays (80 percent of the Medicare-approved amount) and what you pay (20 percent). Medicare may continue to cover these services beyond the annual limits if you have a condition that requires ongoing therapy, such as extensive rehabilitation for stroke or heart disease. To get this exception, your therapist must justify the need when she bills Medicare. If the total cost reaches $3,000 in a year, Medicare automatically reviews your case.

For specific information, see the publication “Medicare Coverage of Therapy Services” at www.medicare.gov/Pubs/pdf/10988-Medicare-Limits-Therapy-Services.pdf .

Chapter 3

IN THIS CHAPTER

Getting the scoop on Medicare premiums, deductibles, and co-payments

Shelling out higher premiums if your income is over a certain level

Understanding why you may pay higher premiums than other people in certain years

Continuing to pay Medicare taxes when you’re already receiving Medicare benefits

What will Medicare cost you, and how much will it save you? That’s the killer question for people just coming into the program. In a way, the answer really depends on where you started out. Did you have low-cost insurance from an employer when you were working? Then Medicare may seem expensive in comparison. Were you paying through the nose for an individual policy that didn’t actually provide much coverage? Or perhaps you just couldn’t find insurance that you could afford? In those cases, Medicare probably seems like the promised land.

This point bears repeating: Medicare isn’t free. Some people do think that the Medicare payroll taxes they pay while working will net them totally free health care after they hit 65. Sorry, not so. In fact, on average, Medicare is said to cover only about half of beneficiaries’ total health-care costs if they have no extra insurance.

In this chapter, I explain the way in which all the various costs of Medicare — premiums, deductibles, and co-payments — may hit your pocket in each of the parts of Medicare. I also go into detail about the higher-income premiums for Part B and Part D because you need to know whether they affect you and, if so, by how much. (However, you may be able to lower some of those costs, a topic I delve into in Chapter 4.) Finally, I explain why some people may pay different premiums than others in certain years and the instances when you need to pay Medicare taxes while receiving Medicare benefits.

What Medicare pays toward your medical care is coverage. What you contribute out of your own pocket can be several kinds of expenses: premiums, deductibles, and co-payments. If you’ve had U.S.-style health insurance before, you know exactly what these terms mean. If not, here’s a quick primer:

Premium: A premium is an amount you pay each month to receive coverage. In other words, it’s your entrance ticket to the program.

Deductible: A deductible is an amount you pay before coverage kicks in. You can think of it as a kind of down payment before getting the goods.