A Costly Medicare Surprise Awaits Retirees

Days spent in the hospital as an outpatient, rather than being officially admitted, can leave Medicare patients with bigger bills.

Doctor holding clipboard
(Image credit: Getty Images/Wavebreak Media)

It's bad enough spending three or more days in a hospital -- undergoing a barrage of medical tests and procedures. Brace yourself for even more pain at discharge if the hospital tells you that you were actually never admitted but were on Medicare "observation status." That designation could cost you big time.

Hospitalized Medicare beneficiaries who are under observation are considered outpatients, even if they spend many days in the hospital. If you find yourself in this boat, there's a chance you'll pay more for services than if you had been formally admitted. Observation patients are also ineligible for certain extended-care benefits.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription


Why am I seeing this? Find out more here

Susan B. Garland
Contributing Editor, Kiplinger's Retirement Report
Susan Garland is the former editor of Kiplinger's Retirement Report, a personal finance publication whose subscribers are retirees and those approaching retirement. Before joining Kiplinger in 2006, Garland was a freelance writer whose work appeared in the New York Times, the Washington Post, BusinessWeek, Modern Maturity (now AARP The Magazine), Fortune Small Business and other publications. For 12 years, Garland was a Washington-based correspondent for BusinessWeek, covering the White House, national politics, social policy and legal affairs. Garland is a graduate of Colgate University.