What is Medicare Part A?

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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 may 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 may 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 have to buy Part A, and don’t buy Part A when you are first eligible for Medicare, your premium may go up by 10%. The penalty is imposed for twice the number of years you didn’t sign up. Find out more about the Part A penalty here.

If you worked 30 to 39 quarters, your premium for 2024 would be $278 a month. If you worked less than 30 quarters, your monthly premium would be $505 a month for 2024.

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 have end-stage renal disease or ALS (Amyotrophic Lateral Sclerosis).

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 $1,632 to pay for the room and board.

After those 60 days expire, you would have a per-day copay of $408 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 $816 per day. After day 150, then you pay all costs.

Some 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 2023 cost for Part B is based on your income. Today, a monthly Part B premium varies from $164.90 or higher depending on your 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 January 1 – March 31. If you don’t sign up for Part B when you’re first eligible, you may have to pay a late enrollment penalty for as long as you have Part B.

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 some 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 $278 monthly if you worked 30 to 39 quarters or $505 monthly if you worked fewer than 30 quarters. If you don’t buy Part A when you’re first eligible for Medicare (usually when you turn 65), you might pay a penalty.

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 how to receive your Medicare coverage. You can also change between Original Medicare and a Medicare Advantage during an open enrollment period.

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

Does Medicare Part A provide prescription drug coverage?

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

Source:

Medicare.gov. “Costs.” Accessed August 2022.

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Erik Martin

Contributing Researcher

Erik J. Martin is a Chicago area-based freelance writer whose articles have been published by AARP The Magazine, The Motley Fool, The Costco Connection, USAA, US Chamber of Commerce, Bankrate, The Chicago Tribune, and other publications. He often writes on topics related to insurance, real estate, personal finance, business, technology, health care, and entertainment. Erik also hosts a podcast and publishes several blogs, including Martinspiration.com and Cineversegroup.com.