Insights:

Medicare Part A is offered by the federal government and is part of Original Medicare that helps pay for inpatient hospital care and other services. 

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Health insurance coverage can be expensive for retirees and seniors. And as we age, we tend to have a greater need for health care services. Thankfully, hospital coverage can be available with no premium costs to eligible individuals. 

This is called Medicare Part A and it can cover important services and treatment like inpatient hospital care.

Take the time to learn more about the parts of Medicare, what Part A covers, the Medicare Part A deductible, and Part A eligibility.

Key Takeaways

  • Medicare Part A is free to most Medicare beneficiaries.
  • People who didn’t pay at least 40 quarters’ worth of Medicare taxes have to pay a monthly premium for Part A.
  • Part A has out-of-pocket costs when you need services, including a deductible and coinsurance.
  • Medicare beneficiaries with Original Medicare need to get a Part D plan to have Medicare prescription drug benefits.

Medicare Part A eligibility

If you’re age 65 or older or have certain disabilities, you’re likely eligible for Medicare, a form of government-sponsored medical insurance. Part A is paid via Medicare payroll taxes withheld from your paychecks over your working life.

There are actually two parts to Original Medicare: Part A and Part B. Part A is hospital insurance that covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and certain home health care services. 

Medicare Part B covers outpatient services, including doctor's visits, outpatient surgical procedures, and ambulance services.

"Once you turn 65 or have been deemed disabled for 24 months by Social Security, you typically become eligible for Medicare Part A," says Amanda Reese, supervisor of the Medicare Department at Hafetz and Associates in Linwood, New Jersey.

You qualify for Part A without having to pay a premium if you’re age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. 

What does Medicare Part A cover?

Medicare Part A covers:

  • Inpatient care in a hospital
  • Skilled nursing care
  • Nursing home care (inpatient care in a skilled nursing facility that's not custodial or long-term care)
  • Hospice care
  • Home health care

If in doubt, you can ask your primary care doctor or another health care provider if Part A will cover their services, treatment rendered, or supplies prescribed.

"Medicare Part A does not cover any custodial or long-term care. You would need a separate long-term care insurance policy for those needs," adds Reese.

Part A also doesn't cover physician services like office visits and outpatient surgical procedures, durable medical equipment, ambulance services, lab work, inpatient and outpatient mental health services, home health care, some preventive services such as flu shots, or specific drugs given in a clinical setting like insulin. All of these services and items are covered instead by Medicare Part B.

How much is Medicare Part A?

The good news is that you typically don't have to pay a monthly premium for Part A. That's true so long as you or your spouse paid sufficient Medicare taxes over your lifetime.

"If you have worked 40 or more quarters -- 10 years or more -- your premium is zero dollars a month," Reese notes.

If you or your spouse didn't pay sufficient Medicare taxes over your career and you are age 65 or older and a citizen or permanent resident of the U.S., you have to pay a monthly premium for Part A.

"If you worked 30 to 39 quarters, your premium for 2021 would be $259 a month. If you worked less than 30 quarters, your monthly premium would be $471 a month for 2021," notes Reese.

Also, if you’re under age 65, you can get Part A without having to pay premiums if:

  • You’re entitled to Social Security or Railroad Retirement Board disability benefits for 24 months. (Note: If you have Lou Gehrig's disease, your Medicare benefits begin the first month you get disability benefits.)
  • You’re a kidney dialysis or kidney transplant patient.

Medicare Part A deductible

Aside from premiums, Medicare Part A recipients may also pay out-of-pocket costs, including a deductible and coinsurance

If you’re admitted to a hospital with Part A as your only insurance coverage, "your deductible would be $1,484 to pay for the room and board," says Scott Maibor, managing director of Boston-headquartered Senior Benefits Boston.

After those 60 days expire, you would have a per-day copay of $371 for days 61 to 90.

"After day 90, the only Medicare Part A coverage you would have left would be 60 lifetime reserve days that would cost $742 per day," Reese says.

Maibor notes that, if you needed to spend extended time in a skilled nursing facility or rehab facility, "in 2021, you would pay $185.50 for days 21 through 100."

How to sign up for Medicare Part A

Most people eligible for Medicare Part A and B are enrolled automatically. 

According to the Medicare.gov website, when you apply for retirement or disability benefits from Social Security (or the Railroad Retirement Board), it also serves as your application for Medicare. After you get approved for Social Security or Railroad Retirement Board benefits, you automatically receive Part A coverage (without having to pay a premium for it) once you're eligible for Medicare.

If you're receiving Social Security benefits (or Railroad Retirement Board benefits) a minimum of four months before turning age 65, you automatically get Part A coverage during the initial enrollment period. You're enrolled in Part B coverage, too (unless you reside in Puerto Rico or beyond the U.S.). Because you pay a monthly premium for Part B coverage, you can choose whether to keep it or drop it.

If you’re within three months of turning age 65 or older and not ready to initiate your monthly Social Security benefits yet, you can use Social Security's online retirement application to sign up just for Medicare and wait to apply for your retirement or spouse's benefits later.

Medicare Part A vs. Part B

Part A and Part B are both components of Original Medicare, but they cover different health care services.

As stated earlier, Part A provides coverage for inpatient care in a hospital, skilled nursing facility care, nursing home care (inpatient care in a skilled nursing facility that's not custodial or long-term care), hospice care, and home health care.

Part B provides Medicare coverage for outpatient care, doctor visits, outpatient surgical procedures, durable medical equipment, ambulance services, lab work, inpatient and outpatient mental health services, home health care, certain preventive services, and particular medications administered in a clinical setting.

Unlike Part A, Medicare Part B charges premiums based on your annual income earned two years prior, as reported on your IRS tax return. In other words, the 2021 cost for Part B is based on your earnings from 2019. Today, a monthly Part B premium varies from $148.50 to $504.90 monthly per person. Most people pay $148.50, but you may pay more for Part B if you have a higher household income.

In addition to paying premiums for Part B, you also pay approximately 20% of the costs of medical services after you meet your Part B deductible. That’s called coinsurance. Medicare covers the first 80% of eligible expenses and you cover the remaining costs.

Frequently Asked Questions

How do I sign up for Medicare Part B if I already have Part A?

If you already have Medicare Part A but need Medicare Part B, there are forms you and your employer (if applicable) need to complete to enroll in Part B without having to pay penalties, according to Reese. If you missed your qualifying window, there’s a general enrollment period between Oct. 15 and Dec. 7. 

How do I sign up for Medicare Part A only?

To enroll in Medicare Part A, you can visit the Social Security website or do so during the general enrollment period each year. You can also wait until you sign up for Medicare Part B and enroll in Part A at that time. Note that most people eligible for Medicare Part A and B are enrolled automatically. When you apply for retirement or disability benefits from Social Security (or the Railroad Retirement Board), it also serves as your application for Medicare.

What are the differences between Medicare Part A and Part B?

Medicare Part A covers inpatient care in a hospital, skilled nursing facility care, nursing home care (inpatient care in a skilled nursing facility that's not custodial or long-term care), hospice care, and home health care. 

Medicare Part B covers doctor visits, outpatient surgical procedures, durable medical equipment, ambulance services, lab work, inpatient and outpatient mental health services, home health care, certain preventive services, and particular medications administered in a clinical setting.

Is Medicare Part A free?

You won't have to pay a monthly premium for Medicare Part A if you or your spouse worked 40 or more quarters -- 10 years or more -- over your career. 

If you or your spouse didn't pay sufficient Medicare taxes over your career, and you are age 65 or older and a citizen or permanent resident of the U.S., you may be able to purchase Part A for $259 monthly if you worked 30 to 39 quarters or $471 monthly if you worked fewer than 30 quarters.

What is a Medicare Advantage plan?

Medicare Advantage, also called Part C, is offered by private health insurance companies as an alternative to Original Medicare.

When you become eligible for Medicare, you can decide between either Original Medicare or Medicare Advantage. You can also change between the two types of Medicare later during an open enrollment period. 

Medicare Advantage costs are on top of Part A and Part B premiums. Medicare Advantage plans often have supplemental coverage not found in Original Medicare, such as prescription drug, dental, and vision insurance. 

Does Medicare Part A provide prescription drug coverage? 

Part A doesn’t include Medicare prescription drug coverage. Instead, beneficiaries with Original Medicare must get a Medicare Part D prescription drug plan to help pay for those costs.