Medicare Part A explained

Key points

• Medicare Part A, also known as hospital insurance, covers expenses related to hospital care, including inpatient hospital care, skilled nursing facility care, home health care and hospice care.
• It’s available to anyone age 65 or older or who has a disability or end-stage renal disease.
• Medicare Part A is free for most retirees, but those without enough work history may be required to pay monthly premiums.
• It’s just one part of the government health insurance program for seniors — there’s also Part B and Part D, while private companies offer supplemental plans known as Part C.

The U.S. government has several social safety nets to help older individuals live comfortably during retirement. One of the most well-known of these programs is Medicare, which is a health insurance program provided by the federal government and funded by payroll tax dollars.

The program is broken up into a few different components, each of which addresses a different set of health needs retirees are likely to have. One of those components is Medicare Part A.

What is Medicare Part A?

Medicare Part A, also known as hospital insurance, covers a variety of expenses related to hospital visits. It’s part of what’s known as Original Medicare, which consists of Medicare Part A and Medicare Part B.

“Medicare Part A is what I refer to as your ‘room and board’ coverage,” said Brannon Lambert, a certified financial planner with Canvasback Wealth Management. “Should you require admittance to a hospital, Medicare Part A will help pay for the cost of the room.” You’ll also be covered for your care while you’re at the hospital.

You qualify for Medicare Part A if you meet one of three criteria:

• You reach age 65.
• You’re younger than 65 with a disability.
• You’re younger than 65 with end-stage renal disease.

What does Medicare Part A cover?

Medicare Part A covers expenses related to four different types of hospital care: inpatient hospital care, skilled nursing facility care, home health care and hospice care.

Inpatient hospital care

If you’re admitted to the hospital by a physician, Medicare Part A will cover your expenses. Insurance covers up to 90 days per benefit period, with a total of 60 lifetime reserve days. Each hospital stay is a separate benefit period, starting the day you’re admitted and ending once you leave.

You’ll pay a deductible for each benefit period, as well as coinsurance after the first 60 days of the benefit period, as long as you stay in a hospital that accepts Medicare insurance.

Types of hospitals generally covered include:

• Acute care hospitals.
• Critical access hospitals.
• Inpatient rehabilitation facilities.
• Inpatient psychiatric facilities.
• Long-term care hospitals.
• Inpatient care as a part of a qualifying clinical research study.

Among the services included in Medicare Part A are semi-private rooms, meals, general nursing, drugs as a part of your treatment and other hospital services and supplies. Services that are not included are private-duty nursing, private rooms, televisions and phones and personal care items.

Skilled nursing facility care

Medicare Part A also covers short-term skilled nursing care if you have days left in your benefit period and have a qualifying hospital stay. This type of coverage applies if your doctor indicates you need daily skilled care.

You’ll be covered as long as you have either a hospital-related medical condition treated during a qualifying three-day hospital stay or a condition that started while you were getting hospital care.

For skilled nursing care, you’ll pay coinsurance for each day after your first 20 days of care, up to 100 days. After 100 days, you’re responsible for paying for your own care.

Tip: Skilled nursing care coverage includes the same things covered under inpatient care, along with physical or occupational therapy, speech-language pathology services, medical social services, dietary counseling and more.

Home health care

Medicare Part A covers certain in-home health care for patients with part-time or intermittent needs. To qualify, you must be under the care of a doctor who certifies you need this care and you must be homebound. Services covered for home health care include:

• Physical therapy.
• Occupational therapy.
• Speech-language pathology services.
• Medical social services.
• Part-time or intermittent home health aide services.
• Injectable osteoporosis drugs.

If a service is covered, you’ll pay $0 for it and 20% of the cost of any durable medical equipment. Certain expenses aren’t covered under home health care, including 24-hour care, meal delivery, homemaking services and custodial care.

Hospice care

This type of coverage applies when you’re terminally ill with a life expectancy of six months or less and you’ve agreed to palliative care instead of treatment to cure your illness. Hospice care coverage includes:

• Items and services for pain relief and symptom management.
• Medical, nursing and social services.
• Durable medical equipment.
• Aide and homemaker services.

There is no deductible or coinsurance for hospice care, but you will pay a $5 copayment for each prescription, as well as 5% of the approved amount of inpatient respite care. You can choose to receive this care either in your home or in a nursing facility.

Note that if you choose to receive hospice care, Medicare Part A will no longer cover any treatment or drugs intended to cure your illness and its related conditions.

How to sign up for Medicare Part A

You can start using Medicare when you turn 65. If you sign up to start receiving coverage before your 65th birthday, your coverage will start in the month you turn 65. If you wait to sign up, there may be a waiting period before your coverage starts. But the enrollment period only lasts up to seven months after your 65th birthday.

If you don’t sign up during the initial enrollment period, you’ll have to sign up during the general enrollment period, which is between Jan. 1 and March 31 each year, with coverage starting July 1. However, you may qualify for a special enrollment period if you are still working and have health insurance through your job. In that case, you can sign up any time, as long as you do so within eight months of you or your spouse leaving your job or losing your group health insurance coverage.

Just because you still have employer-sponsored health insurance doesn’t mean you can’t sign up for Medicare once you reach age 65. You are allowed to have both, but there are some special rules to know about, including how Medicare enrollment affects your HSA eligibility.

“There is a little-known aspect of Part A that could affect more and more people as employer-sponsored health plans continue to evolve,” Lambert says. “HSAs can be great vehicles for putting away extra money for future medical expenses that can be carried into and used in retirement.” Lambert said, although you can’t contribute to an HSA once you’re on Medicare.

If you meet the criteria above and it’s within your initial or special enrollment period or the general enrollment period, you can sign up for Medicare on the Social Security website by creating or logging into your “my Social Security” account. The application takes just 10 minutes and doesn’t require any documentation, in most cases.

Tip: If you’ve applied for or already receive Social Security retirement benefits, you won’t need to sign up for Medicare Part A. You’ll automatically be enrolled when you reach age 65.

Medicare Part A costs

Medicare Part A coverage is free for individuals age 65 and older who meet one of the following requirements:

• You already receive Social Security retirement benefits.
• You are eligible for Social Security retirement benefits but haven’t filed for them yet.
• You had Medicare-covered government employment.
• You’re younger than 65 and have a disability.
• You’re younger than 65 and have end-stage renal disease.

If you haven’t filed for Social Security benefits yet, you might be wondering if you’re eligible. You are generally eligible for Social Security retirement benefits — and therefore free Medicare Part A coverage — if you’ve earned at least 40 worker credits, meaning you’ve worked for at least 10 years.

If you don’t meet the criteria above, you’ll have to pay premiums for your Medicare Part A coverage. Premiums cost either $278 or $506 per month, and the amount you’ll pay depends on how long you (or your spouse) worked and paid Medicare taxes, according to the Centers for Medicare and Medicaid Services (CMS).

Other components of Medicare

Medicare Part A is just one of several components of the government-sponsored health insurance offered to older Americans. The other parts are:

Medicare Part B

Medicare Part B is known as medical coverage and pays for many of the expenses a standard health insurance policy pays for. Services covered under Medicare Part B include preventive care, ambulance services and medically necessary services and supplies needed to diagnose or treat a medical condition.

As is the case with Medicare Part A, you can qualify for free Medicare Part B with a long enough work history. There’s a monthly premium required if you don’t meet those requirements, with amounts ranging from $164.90 to $560.50 per month, according to CMS.

Medicare Part C

Medicare Part C isn’t technically a part of the federal health insurance program, but it’s often referred to as Medicare because it supplements those government plans. These plans — also known as Medicare Advantage plans — are available through private companies.

They’re designed to fill the gap and cover things that regular Medicare doesn’t cover, including vision, hearing, dental and services above and beyond the limits of Medicare. Medicare Part C plans may have premiums, deductibles, copayments and coinsurance. The amount you’ll pay depends on the plan and provider you choose.

Medicare Part D

Medicare Part D, also known as drug coverage, pays for prescription drugs. Each plan has a list, or formulary, of drugs that are covered. Costs associated with Medicare Part D may include an annual premium, deductible, copayments, and coinsurance.