Q: Are there limits to how much of my own money I will have to spend in a year for care?
A: No. There is no limit to how much money you may have to spend on your care, which is why Medigap plans -- which pick up the cost of co-pays, deductibles, and other expenses -- are so important.
When it comes to understanding the potential for out-of-pocket costs, seniors should be aware of something called benefit periods, or what is often referred to as “spell of illness,” Stein says.
A benefit period starts on the day you enter the hospital or skilled nursing facility and ends after you have had no such care for 60 consecutive days. Each new benefit period requires you to pay an inpatient hospital deductible, which in 2011 is $1,132 (the amounts change each year).
There is no limit to the number of benefit periods a person can have. “It could happen more than once a year that you have to meet the deductible,” Stein says. “But once you’re in the hospital you’ll have no co-pays for 60 days and not owe anything to the hospital if your stay is considered medically necessary.”
If your stay in the hospital lasts between 61 and 90 days, however, you’ll pay $283 a day. Days 91 though 150 will cost you $566 a day in co-pays and also draw from your 60-hospital day lifetime reserve.
Medicare allows for 100 days in a nursing home during a benefit period, during which you’ll pay no co-pay for the first 20 days. But in 2011, a stay between 21 and 100 days will require a co-pay of $141.50 each day.
Q: Is the "donut hole" for prescription drugs going away, and if so, when?
A: Yes, but it's going to be a gradual process.
Effective January 2011, seniors who buy Medicare Part D covered brand-name prescription drugs will receive a 50% discount and a 7% discount on generics once they reach the gap in prescription drug coverage known as the donut hole.
In 2012, the discount for brand name drugs will be 75%, and each year following, seniors will pay an increasingly smaller amount until the donut hole closes completely in the year 2020.