SHORT TERM CARE INSURANCE
Here are the details:
1) Remember that a Medicare Supplement only supplements what Medicare pays.
2) Remember also that Medicare Advantage plans must pay the same or better benefits than what Medicare pays, but the structure of the payments is different.
3) That means for MS or MA plans to pay a Skilled Care benefit to policyholders or enrollees, the client must first be eligible to receive Skilled Care benefits from Medicare.
4) Eligibility for the Skilled Care benefit of Medicare requires that the patient:
A) Be admitted (admitted, admitted, admitted) as an inpatient to the hospital. Being in the hospital under “observational care” does not qualify the patient for the Skilled Care benefit.
B) The stay must be for three days for a medically necessary need.
C) The day of discharge is not counted in the three days, so that, in essence, becomes a fourth day—for which the patient must have been admitted.
D) The patient then can be eligible for Skilled Care in a Skilled Care facility—but only for skilled care—not intermediate or custodial.
E) The patient’s doctor must certify that the patient needs daily skilled care or physical therapy.
So far, so good, but hold the phone!
Insurance agents have become accustomed to telling their clients that skilled care is covered by their policy. What they don’t remember to tell them is that there are qualifying regulations to receive skilled care (and skilled care only) after a hospital stay—and particularly, that the patient must have been “admitted.” An “Observational stay” simply will not qualify the patient for the Skilled Care benefit of Medicare.
Now, for the disappointing news:
CMS (Medicare) has been tightening down on hospitals for something they call “upcoding.” CMS pays hospitals more for “admitted” patients than they do for “observational” patients. So, CMS has for several years now been diligent in monitoring hospitals to see if they have been “upcoding” hospital stays from “observational” patients to “admitted” patients, in order to receive higher Medicare payments. That has caused a real paranoia in billing departments at hospitals—to make sure that they don’t improperly code hospital stays because they can lose CMS payments if they do.
So, where does that leave Medicare patients?
Well, believe it or not, over a million patients in 2009 found out they were not eligible for the Skilled Care benefits of Medicare, when they were dismissed from the hospital,
because they were classified (coded) as being there on “observational” status. And…that number has since grown as CMS tightens the rules even more.
Hmmm. Let’s see… I go to the hospital for what I feel is a serious need, get a wrist band, am taken to the sixth floor for the needed care, and stay there for four days. Whether or not I am there as an “admitted” patient or under “observational” care is the furthest thing from my mind. In fact, I probably won’t even know how I was coded until dismissal from the hospital.
(This situation has been described in many news articles over the past few years, and gained the attention of Congressional lawmakers in 2012—because of patients unknowingly losing their Medicare Skilled Care benefits through “non-admitted” hospital stays. Likewise, agents have to change their thinking about what they are saying during their Medicare presentations, and be more specific in regard to this problem)
Now, consider that CMS is continually monitoring this “admittance-observation” dilemma. For that reason, more hospitals are paying special attention to their coding classifications. Which means, that more people are not receiving what they thought would be available to them in the form of skilled care once they leave the hospital. In other words—no qualification—no skilled care benefit. Therefore, more people are leaving a hospital not entitled to what we have unconsciously assumed was pretty much an automatic coverage.
So, what’s the answer?
There’s only one. Short Term Care Insurance. The Short Term Care Insurance policy makes no reference to Medicare (does not need to coordinate with Medicare Skilled benefit qualifications). It pays regardless of Medicare. And it pays skilled, intermediate, or custodial care, or care in an Assisted Living facility with no hospitalization required. Although there may be a 20-day elimination period, benefits can be chosen up to 360 days, and the client can choose a 5% simple interest inflation rider.
The solution is simple. Medicare recipients should coordinate their Medicare purchase and needs, with an STCI policy. It is time to consider how STCI can eliminate the problems of strict Medicare qualifications.
This “inpatient—outpatient” problem is only one of the more recent examples. Long Term Care Insurance company withdrawals from the LTCI market, steep rate increases in LTCI, and uncertainty in the market are other recent examples.
At this point in America’s history, STCI has been America’s best-kept insurance secret—the “missing link”—so to speak. Change that for yourself.