Thank goodness for Medicare (and supplements). The program, though costly to the Federal government, has provided peace of mind about healthcare to millions of seniors. But there are some traps in the program that can be costly.

Every fall, I write an advice column, geared to the annual Medicare re-enrollment period. It typically explains the difference between Medicare Advantage (all-in-one) programs with their headlined lower monthly premiums, and the traditional Medicare program, which requires a supplement and Part D drug coverage.

I’ve noted that if you stay healthy, the lower Medicare Advantage premiums save you money. However, they also come with restrictions on access to in-network physicians and testing services. And since you don’t fully appreciate those restrictions until you have an illness, you’ll find it’s tough to go back to original Medicare with a good supplement at that point.

But there’s one Medicare “trap” common to both of these plans. And it can be expensive if you don’t understand it. Even worse, the trap springs at your weakest moment – typically when you are transported to the hospital by ambulance, and brought into the emergency room.

The Observation Trap
You are quickly transferred from ambulance to an examination room, surrounded by doctors and nurses dealing with the immediate medical need. You’re asked briefly about your insurance, and likely give them your Medicare and supplement cards.

In the best of cases, you’ll be sent home after a few hours of observation and testing, with advice to follow up with your physician. But perhaps the doctors are worried and want to keep you around for a while. You may stay in the ER overnight, or be sent to an “observation” area, to be monitored constantly.

But, you have not been admitted to the hospital at this point. And that is a critical distinction – especially if –after a few days of observation – the hospital decides you need to be transferred to a skilled nursing facility, where you can receive IV treatments or injections. You weren’t sick enough to be admitted to the hospital – but you do need further care.

Medicare covers the first 100 days of this kind of skilled nursing care. But what you don’t know, or may have forgotten, is that Medicare only covers this care if you are transferred directly from an in-patient status after at least three days (covered under Medicare Part A) in the hospital.

Yes, you were in the hospital – but you weren’t an admitted inpatient. That means your skilled nursing care isn’t covered. And you’ll receive a very expensive bill for that care!

Hospitals get penalized for Medicare “readmissions.” So they are incented to keep you in observation status until they decide on your plan of care.

If the hospital wants to keep you around, you or your advocate should demand you be specifically admitted to the hospital — even if they say they must “wait for a room” to become available. And get your admitted status in writing.

Getting Medicare Help
This “admission” issue was the focus of an article posted on HealthcareNavigation.com. They provide advocacy services to help families dealing with large and uncovered Medicare bills, or when claims are denied or when options are restricted in Advantage plans.

While the fees for this service start at $1200 a year, they lift the entire burden at an important moment in time. They also have a program to help you compare and choose among Medicare plans when you first sign up, or during the open enrollment period. This help could be the least expensive part of your decision, over the long run.

If that fee sounds steep, each state has a State Health Insurance Assistance Program, or SHIP, that offers one-on-one counseling and assistance to state residents as well as appealing a coverage or payment decision.

If you’re among the healthy, who have only used your Medicare coverage for routine checkups and minor health issues, you have no idea how complex and tangled the process can be for making sure your healthcare bills are paid correctly.
But when that moment comes, you’ll be glad you have help. And that’s The Savage Truth.