Medicare 101: Understanding Part A

Medicare is the federal health insurance program that helps people aged 65 and older to access free or reduced-cost healthcare. Medicare is designed to ensure that seniors in the US can get the care they need once they retire and their employer-sponsored health insurance ends. People may be eligible to apply for Medicare earlier if they have a disability.

Every US citizen qualifies for Medicare, but there are some individual choices to make about which parts you want and need. In this article, we’ll go further into detail about Medicare Part A, and be sure to check out the rest of the Medicare 101 series to learn about Medicare Part B, Medicare Part C, and Medicare Part D.

Medicare Part A: The Basics

Also known as hospital insurance, Medicare Part A helps older Americans cover the cost of inpatient care in hospitals, as well as care received in skilled nursing facilities. Home health care, including medical equipment such as wheelchairs and hospital beds, is also covered; as is hospice care, which provides quality of life services to people in the final phases of life.

Services not covered under Medicare Part A include outpatient visits to the doctor, preventative care such as flu shots, lab tests or annual exams, mental health services, or therapy services such as speech, physical or occupational therapy. Ambulance services to and from the hospital are also not included under Medicare Part A. Instead, all of these outpatient services fall under Medicare Part B. Prescription drugs, on the other hand, are covered by Medicare Part D.

Seniors are first eligible to sign up for Medicare 3 months before they turn 65, and have seven months to enroll, this is called the initial enrollment period. Missing the enrollment period may result in a penalty fee that increases the longer you wait to enroll.

However, seniors who are already receiving Social Security benefits when they turn 65 will automatically be enrolled in Medicare. You can sign up for Medicare at www.medicare.gov

Premiums

Most people do not pay a monthly premium for Medicare Part A. This is because premiums are not required for anyone who has paid Medicare taxes for at least 10 years, which most employers automatically deduct from their workers’ salary or people pay directly if self-employed. The spouse of a paid-in employee is also counted and won’t need to pay monthly premiums for Medicare Part A. Also, if you qualify for Medicare before reaching age 65, you’re not required to pay a premium; assuming you’ve paid into the system for the requisite number of years.

If you or your spouse has paid into the Medicare system for fewer than 10 years, you may need to budget funds for a monthly premium; between $278 and $506 in 2023, depending on the number of years with a Medicare-covered employer.

Deductibles & Copays

A deductible refers to the amount of money a patient must pay, before insurance kicks in. Regardless of your number of years worked and monthly premiums, Medicare Part A recipients are also responsible for deductible payments. In 2023, the Medicare Part A deductible is $1,600 per benefit period. A benefit period begins when you are admitted to the hospital, and ends after 60 consecutive days of not receiving any inpatient care.

Depending on the length of hospital treatment needed, you may be responsible for a copay while utilizing Medicare Part A coverage. In 2023, the copayment is $400 per day for stays over 60 days but under 90 days, and $800 per day for hospital stays that last 90 to 150 days. More information on long stays and copayment costs is available online.

If you’re concerned about the cost of deductibles and copays, you might consider purchasing Medicare supplement insurance, sometimes known as Medigap. These policies are specifically designed to help cover out-of-pocket costs for Medicare recipients, although be aware that policies will still have a separate (and usually, much smaller) deductible or copay of their own.

Do I Need Medicare Part A?

Medicare Part A is one half of what’s known as “Original Medicare”. By enrolling for Medicare, you are automatically signed up for Medicare Part A and Part B. There’s no need to opt in to Medicare Part A, although depending on your unique healthcare needs, you may choose to additionally apply for Medicare Part C (an alternative to Parts A and B, which is offered through private insurers), Medicare Part D (prescription drugs coverage), or Medigap (to potentially reduce the financial burden if you expect to face frequent deductibles or copays).