If you need medical care, it is typically categorized as either an inpatient procedure or an outpatient procedure. An inpatient procedure means that you need to stay in the hospital for one or more days. An outpatient procedure is one where you visit a clinic or doctor’s office and then go about your day afterward.
Knowing how Medicare handles inpatient vs. outpatient care will help you know what to expect when it comes to costs. How much does Medicare pay, and how much will you cover?
This guide will help you understand the inpatient and outpatient costs when you use Medicare for health coverage. Let’s get started!
What does it look like to have an inpatient or an outpatient hospital stay? Let’s look at some examples.
Scenario 1: You’ve been struggling to walk without pain, and your doctor looks over your joints. She realizes that you’re having a lot of pain in your knee, and after some testing, tells you that you’ll need knee replacement surgery. Knee replacement is an inpatient hospital procedure, so if you have Original Medicare, Part A applies. You’ll have an annual deductible of $1,556 (in 2022), and then a $0 coinsurance for days 1 - 60 of inpatient care.
Scenario 2: Your vision has been seeming cloudy lately, and your optometrist refers you to your doctor for cataract testing. Your doctor confirms cataracts and assures you that cataract surgery is very routine. Your procedure will be an outpatient process and with Original Medicare it will be covered by Medicare Part B. You can expect an annual deductible of $233 (in 2022) and then you’ll pay 20% of the remaining Medicare-approved cost. Medicare will cover the rest.
Scenario 3: You need physical rehabilitation after a fall. Depending on your needs and the severity of the injury, the rehab may be either outpatient or inpatient. For example, if the fall required surgery your rehab might be inpatient, while a simple fall that was treated at a quick care clinic might only need outpatient rehab. If you have inpatient rehab, Medicare Part A will apply, and outpatient rehab is covered by Medicare Part B.
If you have Original Medicare, Medicare Part A (hospital coverage) applies as long as you’re at a Medicare-enrolled facility and using doctors who accept Medicare assignment.
It depends on the medical needs the patient has. After the annual deductible is paid, Medicare Part A covers 100% of the cost for inpatient days 1 - 60 in a single year. So if you’re curious about what Medicare covers for a 3-day hospital stay, you’ll have 100% coverage after your deductible as long as you’re within the first 60 days of inpatient care in the year.
People often want to know “Does Medicare cover the full cost of hospitalization?” If you have a short hospital stay, you can expect a $0 coinsurance payment after your deductible. If you get to day 61 and beyond, you will have a daily coinsurance charge. So for patients with less than 60 inpatient days in a year, the answer to “Does Medicare cover 100 percent of hospital bills?” is yes, after the deductible.
Medicare covers the medically necessary care at Medicare-approved rates. After your deductible, you don’t pay anything until the 61st inpatient day within a year. From day 61 - 90, you pay $389 per day, and for day 91 and beyond you’ll need to use your lifetime reserve days. You only get 60 of those over your lifetime, and the coinsurance is $778 per day (in 2022).
Keep in mind that a Medicare Advantage plan will have different deductibles, copayments, and other stipulations. You’ll need to talk to your insurance provider to get the details on what they pay and how much you can expect to pay.
With Original Medicare, outpatient care is covered by Medicare Part B (medical coverage).
Does Medicare pay for outpatient surgeries? Absolutely — if you have a medically necessary outpatient surgery, and it’s performed at a Medicare-enrolled facility by doctors who accept Medicare assignment, you’ll have coverage through Medicare. If you have a Medicare Advantage plan, the facility and doctors will need to be in the plan's network.
You might be surprised to find out how many medical procedures are outpatient. Doctors have found less-invasive ways to perform a variety of medical processes, which allows the patient to recover at home without needing an inpatient stay.
With outpatient care, you’ll have an annual deductible, which is $233 in 2022. Then, you’ll pay 20% of the Medicare-approved costs while Medicare covers the rest.
Understanding whether your upcoming medical procedure is inpatient or outpatient will make a big difference in how you budget for the process. It’s important to ask your doctor the right questions so you know what to expect.
Also, keep in mind that Medicare Advantage plans have different arrangements for inpatient and outpatient care, so you’ll want to check with your insurer to plan for the costs.
Medicare can be challenging to understand, but we’re here to make it easier. If you have more questions about Medicare coverage of inpatient or outpatient costs, or you want to compare Medicare plans to find the right one for your needs, contact us to talk to a licensed insurance agent today!
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