Limits on mental health benefits
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.
Outpatient psychiatric services
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. If you have Medigap insurance, these co-pays are covered. If you’re in a Medicare Advantage plan, you pay what your plan requires.
Psychiatric care in a hospital
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.
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.
Mental health benefits in Medicare Advantage plans
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.
Limits on therapy services
Medicare limits the amount of coverage you can get for therapy services in any given year as an outpatient or in a hospital outpatient department or emergency room. In 2015, the limits were $1,940 for occupational therapy and $1,940 for physical therapy and speech-language pathology combined. 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 $3,700 in a year, Medicare automatically reviews your case.
Chapter 3
Understanding What You Pay Toward Your Costs in Medicare
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
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 because of age and poor health, you couldn’t buy insurance at any price? 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 talk about the instances when you need to pay Medicare taxes while receiving Medicare benefits.
❯❯ 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.
❯❯ Co-payment: This amount is what you pay as your share of the cost of each service you receive. Strictly speaking, co-pays are fixed dollar amounts (such as $20), whereas coinsurance is the correct term when your share is a percentage of the cost (such as 20 percent). But because coinsurance is too wonky for words, I use co-pays in these pages.
If you had insurance in the past, you probably paid a single premium for all your health care and a single deductible for the whole year (maybe a hefty one if you were in a high-deductible plan), with co-pays for each service. But Medicare, of course, is divided into four parts, each with its own costs and charges. The following sections explain each set of costs under Part A, Part B, Part D, and Medicare Advantage plans. Finally, Figure 3-1 shows the costs for Parts A, B, and D at a glance. Note: The costs in the chart are for people enrolled in traditional Medicare plus stand-alone Part D drug plans. Medicare Advantage plan costs are different and vary among plans.
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