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Mental Illness and Medicare
Jan L. Warner & Jan Collins

Question: My mother, a widow, is nearly 80 and is covered by Medicare. She also has a Medigap policy. Recently she began to deteriorate mentally quite rapidly, which was a real surprise to my wife and me. At first her doctor thought she had dementia, and when she began to fall at home, he hospitalized her. But, after several days, he decided that she did not have dementia but instead was severely depressed. To get her stabilized, he kept her in the hospital for a few more days and called in a psychiatrist who put her on prescription anti-depressants. When he sent her home, he prescribed outpatient visits with the same psychiatrist and a psychologist. Since Mom has very limited income and resources, we have been concerned about whether Medicare and her supplement will pay for her outpatient treatment -- $150 per visit – because the cost of her prescriptions is so high. We understand that her hospitalization was covered.


Answer: Despite the growing number of elderly people with mental disorders, and despite medical evidence that major depression and other mental illnesses are biological disorders of the brain, the federal law governing Medicare coverage – which has not been changed since 1965 when Medicare was born – continues to discriminate against seniors and others who have been diagnosed with mental illness.

Here's how: Medicare beneficiaries who are diagnosed with physical illnesses pay 20 percent of their outpatient treatment, but those with mental disorders are required to pay 50 percent of the cost of their outpatient treatment. And for those whose conditions require inpatient treatment for mental health diagnoses, Medicare enforces a 190-day lifetime limit that is not placed upon any other type of in-patient treatment.

Since we can find no legitimate justification for the Congress to continue to treat individuals with mental illness differently than those with other medical ailments, we must presume that cost containment and cost-cutting incentives have kept mentally ill Medicare beneficiaries from receiving parity with other Medicare beneficiaries.

We believe that requiring a 50 percent co-payment from mentally ill seniors is not only unfair, but also prevents many from receiving the help they need. This causes potentially manageable conditions to become chronic and even life-threatening.

We also believe that if the Medicare Mental Health Modernization Act of 2001 (HF 599) and its Senate companion bill (S 841) are enacted, they will provide needed modernization of an antiquated Medicare coverage system. Since older Americans tend to vote in larger numbers than younger people, seniors have considerable clout with elected officials. If seniors and their organizations begin lobbying heavily for passage of these bills, it might speed their approval. Baby boomers, too, whose oldest members are now in their late 50s, need to remember that they, too, will soon be relying on Medicare. The voices of this large cohort should also be raised.

Taking the NextStep: How does Medicare decide what to pay for In-patient hospital care? Using the Prospective Payment System (PPS), Medicare pays predetermined rates to hospitals for each discharge of a Medicare beneficiary who has received inpatient services. These rates are based on categories that are known as “Diagnosis Related Groups” (DRGs).

Based on the type of illness covered by the DRG (there are more than 470 of them), Medicare may pay more of the hospital’s cost. In certain situations where the cost of care is inordinately high or the stay in the facility is inordinately long, Medicare will provide the hospital with additional payments.



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Planning Your Future with 20-20 Vision™


Today, more than 36 million Americans are age 65 or over. There are more than 22 million family-member caregivers. Then there are the Baby Boomers. All are grappling with the major decisions that accompany the latter stages of life. This book is for them. Written by two experts with decades of experience between them, it is a comprehensive guide that instructs readers about how to create a plan to deal with all aspects of aging, helps maximize options and ensure wishes are carried out.

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