Ask any Medicare beneficiary about observation status, and you’ll likely receive a four-letter word response.
Medicare observation status can be sticker shock. It’s on the one hand mirage, on the other a kick in the gut.
Here’s how it works. You are sick, laying in a hospital bed. Doctors and nurses are checking on you regularly. You figure since you are in a hospital bed, you are “in the hospital” or inpatient care status. Your Medicare plan says that hospitals cover inpatient care on a co-pay basis. In your case, that is $350 per day for the first 4 days and then $0 thereafter. To your surprise, however, you find out you are under “observation care” (also known as Medicare observation status).
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