What is It?
Many of our The Boeing Company clients have questions regarding Medicare Part A. Medicare Part A is the portion of Medicare that is available premium free to all eligible individuals*. Medicare Part A provides services associated with the hospital, hospice, skilled nursing care, and home health care.
Albeit Part A's free nature for most individuals, it's important that our The Boeing Company clients know that those who need to buy coverage could pay near $499 per month. Furthermore, there are potential additional costs we'd also like our The Boeing Company employees to be aware of, such as:
- $400 per day coinsurance payment in 2023 for in-patient hospital stays for days 61 to 90 (an increase of $11 from $389 in 2022).
- 20% copay for Medicare-approved durable medical equipment (DME).
- $200 in 2023 coinsurance payment for days 21 to 100 for a skilled nursing facility stay (an increase of $5.50 from $194.50 in 2022).
- 20% copay for mental health services connected with a hospital stay. (1)
What does Medicare Part A cover?
Another question we receive a lot from our The Boeing Company clients is in regards to what Medicare Part A covers. Part A covers the costs associated with these types of health care:
- Inpatient hospital stays
- Stays at a skilled nursing facility (i.e., where medically necessary skilled nursing and rehabilitation care are provided), in contrast to a nursing home providing custodial care
- Home health care
- Psychiatric inpatient care
- Hospice care
Medicare Part A Coverage is Based on Benefit Periods
How Are Benefit Periods Determined?
Now some of our The Boeing Company clients may be wondering, how are benefit periods determined? Medicare Part A coverage is tied to a benefit period of 60 days for a spell of illness. A spell of illness benefit period commences on the first day of your stay in a hospital or in a skilled nursing facility and continues until 60 consecutive days have lapsed and you have received no skilled care. Medicare does not cover care that is or becomes primarily custodial, such as assistance with bathing and eating. A deductible applies for each benefit period.
Your benefit period with Medicare, the spell of illness, does not end until 60 days after discharge from the hospital or the skilled nursing facility. Therefore, if you are readmitted within those 60 days, you are considered to be in the same benefit period. On the other hand, Medicare considers it a new spell of illness if you are readmitted more than 60 days after discharge. The good news is that this means that if you are readmitted within 60 days, you are not charged another deductible; the bad news is that your previous admission is tacked on to the second one in calculating the percentage amount Medicare will cover since Medicare full coverage is only for 60 days. There is no limit on the number of spells of illness Medicare will cover in your lifetime.
Example(s): Uncle George goes into the hospital June 1 and is discharged July 31. On November 1, he is readmitted to the hospital. Once he pays his deductible again, Medicare will pay all his costs until December 30. If, however, George is readmitted to the hospital within 60 days of his July 31 discharge, there is no additional deductible.
Coverage for Inpatient Care in a Hospital
For inpatient hospital stays, Medicare will pay:
- 100 percent of costs for up to 60 days of inpatient care, after you pay the deductible. You pay $1,556 per benefit period in 2022.
- After 60 days, beneficiaries are responsible for coinsurance costs. In 2022, beneficiaries must pay $389/day.
- Beneficiaries are also entitled to a lifetime reserve of 60 additional days. If those reserve days are also used, beneficiaries must pay $778/day in 2020 for days 91 to 150.
- If you choose not to use your lifetime reserve, all Medicare coverage stops after 90 days of inpatient care or after 60 days without any skilled care for this spell of illness. (2)
Tip: Part A coverage pays for all Medicare-approved inpatient hospital costs except for your physician bills, which are covered under Part B. Medicare approves costs considered reasonable and medically necessary.
Specific Services Covered Under Part A
We'd like our The Boeing Company clients to be aware of specific services covered under Part A, these include:
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- A semi-private room
- Meals
- General and skilled nursing services, including nursing in special care units such as intensive care
- Medications administered while in the hospital
- Clinical laboratory tests
- X-ray and radiotherapy
- Medical supplies, such as dressings and intravenous lines
- The use of equipment such as wheelchairs
- Operating room and recovery room charges
- Rehabilitation services, such as physical therapy and speech pathology, provided in the hospital.
It's important that these The Boeing Company employees note that Medicare will not pay for items considered luxuries, such as a television in your room or for a private room, unless your condition renders it medically necessary.
Coverage for Skilled Nursing Facility Care
What is a skilled nursing facility? The short answer is--not a nursing home. Medicare does not cover nursing home care but does cover care in a skilled nursing facility, which may be housed in a nursing home or in a hospital or may be freestanding. The significant attribute is the kind of care provided. A skilled nursing facility provides medically necessary nursing and/or rehabilitation services.
To receive Medicare coverage for care in a skilled nursing facility:
- A physician must certify that you require daily skilled care that can only be provided for an inpatient in a skilled nursing facility
- You must have been an inpatient in a hospital for at least three consecutive days for the same illness or condition before being admitted to the skilled nursing facility
- Your admission to the skilled nursing facility must be within 30 days of discharge from the hospital to receive Medicare
- The facility must be Medicare-approved to provide skilled nursing care
Coverage is limited to a maximum of 100 days per benefit period. $194.50 is charged per day between days 21 - 100, and all costs are charged beyond day 100 in 2022. (3)
Coverage includes:
- A semi-private room
- Meals
- Rehabilitation services
- Prescription drugs administered while in the facility
Coverage for Home Health Care
Home health care is care provided to you at home, typically by a visiting nurse or home health care aide. Medicare Part A covers medically necessary home health care offered by an agency certified by Medicare to provide home health care. The home health agency agrees to be paid by Medicare and to accept only the amount Medicare approves for their services.
To receive home health services under Medicare, the following rules apply:
- You must be confined to your home
- Your physician must certify the care as medically necessary and approve the treatment plan
The Boeing Company employees should also be aware that:
- Medicare does not cover care that is primarily custodial, such as assistance in performing daily tasks
- Medicare will cover services such as nursing service, physical therapy, speech therapy, occupational therapy, and 20 percent of the cost of durable medical equipment, such as a wheelchair
- Currently, there are no benefit periods, deductibles, co-payment, or coinsurance requirements for home healthcare
Coverage for Psychiatric Hospitalization
For inpatient psychiatric care, Medicare Part A will pay for the same kinds of services as if you were hospitalized in a general hospital:
- Semi-private room
- Meals
- Nursing care
- Rehabilitation services, such as physical or occupational therapy
- Prescription drugs administered in the hospital
- Medical supplies
- Lab tests, X-rays, and radiotherapy
An important distinction from care in a general hospital is that you must use a facility that accepts Medicare assignments on all claims. Deductibles and coinsurance costs are the same as for a regular inpatient hospital stay. In the course of your life, Medicare will only pay for 190 days of inpatient psychiatric care (lifetime limit).
Coverage for Hospice Care
Hospice care is care for the terminally ill. Hospice care covered by Medicare Part A is comprehensive coverage, at home or in a facility where you live, for symptom management and pain control for the terminally ill. To receive coverage:
- The healthcare provider must be certified by Medicare to provide hospice care
- The patient's doctor and the hospice care director must certify that the patient is terminally ill (i.e., has a life expectancy of six months or less)
- The patient must elect hospice coverage for the terminal illness instead of standard Medicare benefits, although Medicare will continue to cover care provided that it is not related to the terminal illness
Services include nursing care, medical appliances and supplies, prescriptions, home health aide and homemaker services, medical social services, and counseling.
There are two categories of costs for which a Medicare hospice patient may be responsible:
- A co-payment of up to $5 for each outpatient prescription for pain relief or symptom management.
- Respite care. The hospice may arrange for the hospice patient to be moved to an inpatient facility for up to five days at a time to provide respite to the hospice care personnel. The Medicare beneficiary may be charged a nominal daily fee for the inpatient care (5 percent of the Medicare-approved amount for in-patient respite care).
We'd also like our The Boeing Company clients to note that Medicare does not cover room and board when you get hospice care in your home or a facility where you live.
1. 'How much does Medicare cost in 2022 and 2023? Parts A, B, C and D' (humana.com, 2022)
2,3. 'What is Medicare Part A?' (policygenius.com 2022)
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The Boeing Voluntary Investment Plan (VIP) integrates with other Boeing retirement plans, such as the Boeing Pension Value Plan and other defined benefit plans. Recently, changes like the addition of a Roth contribution option and a shift toward enhanced defined contributions have been made to improve benefits for certain employees, particularly those who previously participated in both defined benefit and defined contribution plans. These changes enhance retirement planning flexibility but may require employees to adjust their strategies depending on their long-term financial goals.
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Key eligibility requirements for the Boeing VIP include no minimum age or service requirements, though certain groups, such as union employees and non-resident aliens, may be excluded. These criteria align with industry standards, making the plan accessible to a broad range of employees. The inclusivity of eligibility supports employees at various career stages, though exclusions may affect unionized employees or contractors differently from their non-union counterparts(Boeing_Voluntary_Invest…).
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Boeing VIP allows catch-up contributions for employees aged 50 and over, aligning with IRS guidelines for retirement savings. This option benefits employees nearing retirement by enabling them to contribute more toward their savings. However, the increased financial burden of larger contributions could pose a challenge for employees with tighter budgets, potentially limiting their ability to maximize catch-up contributions(Boeing_Voluntary_Invest…).
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The investment strategy of Boeing VIP emphasizes risk management and diversification, offering a wide range of options, including lifecycle funds, index funds, and company stock. These choices provide flexibility for employees with varying risk tolerances, helping them manage retirement savings effectively. The availability of different fund types ensures that employees can align their investment choices with their retirement timelines and risk preferences(Boeing_Voluntary_Invest…).
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Boeing VIP offers loans and withdrawal options, including hardship withdrawals and in-service distributions at age 59½. These features provide flexibility in accessing retirement funds but come with conditions that could affect long-term savings. For example, taking a loan or withdrawal may reduce the funds available for retirement and may lead to penalties, making it important for employees to carefully consider the implications before accessing their funds(Boeing_Voluntary_Invest…).
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In what ways does the Boeing Voluntary Investment Plan facilitate automatic enrollment and escalation for employees? Assess the impact of these features on employee participation rates and retirement savings at Boeing Company.
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Boeing ensures compliance with IRS regulations by regularly updating its plans and conducting compliance audits. Maintaining adherence to regulations is essential for protecting the plan's tax-qualified status, and Boeing also focuses on employee education to ensure they understand the requirements and benefits of the plan(Boeing_Voluntary_Invest…).
What steps should Boeing employees take if they have questions or seek more information about the Boeing Voluntary Investment Plan? Outline the available channels for communication and the types of inquiries that can be directed to Boeing's human resources department.
Boeing employees with questions about the VIP can contact the Boeing Retirement Service Center or their human resources department. These channels provide assistance with inquiries related to plan features, contributions, and withdrawals, offering personalized guidance to help employees manage their retirement planning effectively(Boeing_Voluntary_Invest…).
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