Why inpatient or outpatient matters with Medicare coverage

Dear Toni: I have original Medicare with a supplement. In March, I was taken by ambulance to the emergency room for heart issues. I had a big surprise when a hospital employee asked me to sign a Medicare form to see if I was to be admitted as an inpatient or sent home. I was lucky that the doctor sent me home.

Did I do the right thing by signing the Medicare form? My sister said she did not have to do this when she had cataract surgery last summer. — Sandra, Sugar Land, Texas

Dear Sandra: Your hospital situation was different from your sister: She was having outpatient surgery, and you were in the emergency room for a health issue. Original Medicare has two situations in which someone is asked to sign a Medicare form.

The first one concerns Medicare’s outpatient observation notice. It affects only those who are enrolled in original Medicare, with or without a supplement. The second is Medicare’s lifetime reserve days policy, which gives someone on Medicare an extra 365 days during a hospital stay — this is only for people covered by a Medicare supplement.

Those two Medicare rules apply only with original Medicare, not a Medicare Advantage plan.

■ Medicare outpatient observation notice, or MOON: Page 28 of the 2025 “Medicare & You” handbook explains this rule under “Am I an inpatient or outpatient?” It states: “Each day you have to stay, you or your caregiver should ask the hospital and/or your doctor, a hospital social worker, or a patient advocate if you’re an inpatient or outpatient.” Know whether you are an inpatient or outpatient, because it affects what is covered in the hospital.

■ Lifetime reserve days: Page 27 of the handbook explains how the reserve days work. For 2025, Medicare Part A covers an inpatient hospital stay with a $1,676 deductible for days 1 to 60, six times a year. For days 61 through 90, Medicare pays all but $419. For days 91 and thereafter, Medicare pays all but $838 with the 60 lifetime reserve days to be used. Once you reach the end of the reserve days, the inpatient hospital benefits are exhausted and you will pay the full cost.

Sandra, you have a Medicare supplement Plan G, and your Part A inpatient hospital costs are paid for by the plan with an extra 365 days of inpatient hospital coverage. During those 365 days, the hospital is forbidden to bill you for the balance. It must bill the Medicare supplement and sign off on specific Medicare/hospital forms.

Toni King is an author and columnist on Medicare and health insurance issues. If you have a Medicare question, email info@tonisays.com or call 832-519-8664.