Medicare provides insurance coverage to seniors 65 and over. Unfortunately, there are problems with the coverage.
Medicare doesn't pay for many services that seniors need. It also leaves retirees with substantial coinsurance costs unless they buy optional additional coverage through Medigap or opt for a Medicare Advantage plan as an alternative.
These aren't the only issues, either. A new study from Brown University highlighted an outdated Medicare rule that has serious consequences for retirees. Here's what it is, along with details on how this rule ends up hurting seniors.
Image source: Getty Images.
This outdated Medicare rule leads to unnecessary hospitalizations for retirees
According to Brown University's research, the outdated Medicare rule leading to unnecessary hospitalizations is known as the "three-day rule." This rule restricts Medicare coverage of skilled nursing care facilities. Specifically, these facilities are covered by Medicare only if the patient spent at least three consecutive days in the hospital.
The rule was first established in 1965, but things were very different back then. In fact, Dr. Amal Trivedi, a professor of health services, policy, and practice, and professor of medicine at Brown University and the study's co-author, stated, "When the policy was created, typical hospital stays were close to two weeks, and requiring three inpatient days may have helped ensure appropriate use of post-acute care."
Now, however, as Dr. Trivedi explained: "[H]ospital stays are far shorter, and hospitals can quickly assess patients' need for skilled nursing care. In that context, it has been difficult to justify a rigid three-day threshold."
The three-day rule was actually suspended from March 2020 to May 2023 as a result of COVID-19, so researchers used data from that time to investigate the potential economic effects of the policy. Based on their findings, it turns out that the three-day rule doesn't reduce skilled nursing care use but, instead, results in patients being kept in the hospital longer so they can meet Medicare's requirements for getting nursing care paid for.
Once the Medicare three-day rule was reinstated after the COVID-19 pause, there was an increase of more than 1% in the proportion of hospital stays lasting for three or more days, and the increase was more than 5% among traditional Medicare patients who were released to nursing care rehab facilities. In just the first month alone, there were at least 2,000 additional hospital days among seniors.
Retirees need to be aware of the impact of the three-day rule
Unfortunately, there's very little seniors can do about the effects of the three-day rule -- other than to be prepared for its impact. Retirees may also wish to consider incorporating long-term care planning in their retirement planning process, as the fact is that Medicare only covers skilled nursing care in very limited situations. Seniors who don't want to drain their retirement plan funds need to make sure they have a plan to pay for this care if it becomes needed.
