Did you know you could spend the night in the hospital, or even several days, and Medicare would not cover the bill like it would if you were officially admitted? “Observation stays” or being held for observation switches you from being covered under Medicare Part A to Part B coverage.
These observation stays are most common if you go in through the emergency room, but they can occur in other situations, too. So, what difference could the way Medicare covers your time in the hospital make?
If the hospital bills Medicare for you as an “inpatient” who has been officially admitted, you have to meet the $1,156 2012 Part A deductible before you have coverage. After that, Medicare will pay for 60 days of hospital care without requiring you pay a portion of the daily bill. If you’re covered as an outpatient under Medicare Part B, you only have to meet the $140 annual deductible before Medicare starts paying bills, but it only pays 80 percent of most bills under Part B.
A study published in the Journal of Health Affairs shows that this observation stays increased by 34 percent from 2007 to 2009. And, Medicare patients were held in observation for longer periods of time, like three to five days, which is well past Medicare’s recommended 24 to 48 hours.
Hospitals are not required to tell you any of this, so you’ll have to ask whether your care is being handled as an inpatient or an outpatient. If you need more information about what Medicare covers, check our All About Medicare page. You can also call us if you want to discuss your health care options. Our personal advisors never charge you for a consultation.

Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.