End of the Line on Medicare with Spending Spikes

The CDC estimates that about half (that is 50 percent) of all American adults have at least one chronic illness, such as diabetes, high blood pressure or arthritis.

Overall, chronic illnesses account for more than 75 percent of healthcare costs for Medicare. See the infographic for more details.

infographic on medicare spending

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How Part A Works: Benefits Vs Premium

Medicare Part A is one of the most popular Medicare segments. Inpatient care in a hospital or skilled nursing facility fall under coverage in this section, but that’s not the only benefits you’ll receive from it.

Deductibles (typically an expense incurring once a year) are included within cost sharing for Part A. On the first day of January, you cover all costs for your medical expenses. After you’ve spent the money necessary to satisfy the quota of the deductible, Medicare kicks in and provides coverage for additional expenses throughout the entire year. When the next January rolls around, this starts over.

When it comes to Medicare A, deductibles are not laid out in this typical fashion. As opposed to having the requirement of filling the quota once a year, you have to fill it once every benefit period. A benefit period is marked on the calendar the moment you set foot into a hospital/skilled nursing facility. The benefit period dissipates once you’ve been home for sixty consecutive days.

Throughout the benefit period, you may find yourself in the hospital/skilled nursing facility multiple times. Staying in treatment, going home, and then returning the next week because of the same ailment – this means two hospital visits within the same benefit period. You would only have to provide funds for one deductible, not two.

However, if sixty days have passed before you return to the hospital for the same ailment, a new benefit period takes place. You would then have to pay dual deductibles this article at Able Medicare does over it.

Part A has no limit cap on how many benefit periods one can experience throughout the year. It also helps provide coverage for up to ninety days of hospital/skilled nursing care per benefit period. Lifetime reserve days are also a factor which comes into play, which are like a bank account of additional hospital days falling under Medicare coverage. These can be used if you find yourself in a hospital/skilled nursing facility post-ninety days within Medicare Part A’s benefit period. Sixty bonus days exist in this account
which can be pulled out throughout your entire life span.

Understanding how the gears turn on Medicare Part A’s coverage policies when it comes to benefit periods, the time allotments and lifetime reserve days can help you preserve the hard earned cash in your wallet.

Paul Ryan on Medicare and Other News

Our first presidential election with unlimited corporate spending has seen campaign ad funding exceed half-a-billion dollars. One of the things they’re talking about is Medicare. So, what’s going to happen to Medicare?

Paul Ryan’s budget proposal switches traditional Medicare to a voucher-like credit or premium-support system. People under 55 would no longer enroll in Medicare. They’d have to buy private insurance plans – See this blog at

The nonpartisan Congressional Budget Office (CBO) found that would cost Medicare beneficiaries about $6,000 more because voucher credits were to increase with the rate of inflation. The actual cost of health care has been rising much faster.

In Ryan’s second plan (even he realized that his original plan wouldn’t work), voucher credits would cover the two cheapest health plans (which will be the equivalent to Medicare and may even compete against it) unless costs grow faster than GDP plus 0.5 percentage points. If that happens, we don’t know what Congress would do to help. Even if it doesn’t, the CBO says, “beneficiaries might face higher costs,” according to Although, his latest plan will most likely lower healthcare costs and that isn’t taken into account. See PolitiFact.

Can you Retire with just Medicare?

When to retire is a personal decision, but an overall trend has emerged. In the 90s, the average retirement age for men was between 62 and 64. For women, it was a little earlier at 60 to 62. Now, a significant number of senior workers (over 25 percent) say they plan to continue working at least until age 70. And, health care costs are a big factor.

What (Obama) HealthCare Reform Means

Healthcare reform is rolling out as planned. So, what’s going to happen to Medicare and Medicare plans?

The federal subsidies for generic prescriptions to get you through the “donut” hole are good to go. Pharmaceutical manufacturers will be giving 50-percent discounts on brand-name prescriptions. Generics are discounted at 14 percent.

The other very popular healthcare reform – preventive care with no out-of-pocket costs – made it, too. If you prefer to get your Medicare benefits through an Advantage plan, you’ll get those free services and all of the other guaranteed benefits of original Medicare.

It’s not all good news, though. When the AARP Public Policy Institute looked at what beneficiaries spend for healthcare, it reported more than four million spent over $8,300 every year. Median spending for those who had Alzheimer’s, cancer or congestive heart failure took about one-fourth of their income.

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