Medicare comes in four parts: A, B, C (Medicare Advantage) and D. Together, Parts A and B form Original Medicare. About 60% of people with Medicare get their benefits this way. The remaining 40% choose private Medicare Advantage plans instead.
As you near eligibility for Medicare, you’ll need to make a choice about how you get your coverage. In this overview, we’ll talk about Medicare Part A, the hospital portion of Original Medicare.
What does Medicare Part A cover?
Medicare Part A generally covers hospital care. That includes:
- Inpatient hospital care
- Inpatient mental health care
- Skilled nursing facility care
- Nursing home care (inpatient skilled care, not custodial or long-term)
- Home health care
- Hospice care
And when you’re in an inpatient setting covered under Medicare Part A, coverage includes: semi-private rooms, meals, general nursing care, necessary inpatient drugs, and any other hospital services and supplies that you need as part of your inpatient care.
“Covered” doesn’t mean free, of course. Covered care just means the insurance plan — in this case, Original Medicare or Medicare Advantage — will pay a portion of your bill.
By law, Medicare Advantage plans have to cover at least everything that Original Medicare covers. So if you have a private Medicare plan, rest assured that your plan will cover these same benefits under Part A. Costs may differ, though. Jump down to the section on costs for more info on the cost of Medicare Part A.
What does Medicare Part A not cover?
Medicare Part A is pretty straightforward in terms of what it covers, but there are some things you should know about what it doesn’t. There are also some rules about coverage under Part A that can make coverage trickier than it seems at face value.
For example, in order for Medicare Part A to cover your hospital stay, all of these things have to be true:
- You’re actually admitted to the hospital (i.e., not in “observation status,” which we’ll talk about in a second), and you’re there because of a doctor’s order saying you need to be there.
- The hospital you’re in accepts Medicare.
- Your stay is approved by the Utilization Review Committee (in some cases).
“Observation status” happens when you’re in the hospital but not as an inpatient. You may be in a hospital room, wearing a gown and everything, but still not be officially admitted to the hospital.
In these situations, Medicare Part A will not cover your hospital costs.
Because this can be such a problem for people, Medicare does require hospitals to give patients a heads up. If you’re under outpatient observation status for more than 24 hours, the hospital is required to give you the Medicare Outpatient Observation Notice (MOON). This tells you why you haven’t been admitted and alerts you to the fact that Part A may not cover your care.
But don’t rely on the hospital to give you notice, even if it’s required. When you’re in the hospital — because you planned to be or because there’s been an emergency — always ask your doctor whether you’re inpatient or not. Doing this up front might save you a headache and a larger bill later.
We should also mention that while Medicare Part A covers inpatient services, this may not extend to doctor’s services while you’re in the hospital. You would need to have medical coverage, such as Medicare Part B, to cover any charges that go beyond your covered Part A care.
With health insurance, you might be familiar with the concept of the deductible. This is a set amount of money that you have to pay out of pocket before your health plan pays its share of your bills. Typically, there’s only an annual deductible. That means you pay one deductible for the whole year of coverage. After that, your insurance company pays a portion of your bills while you pay the rest.
The Medicare Part A deductible works differently. With Part A, the deductible is per benefit period, not per year. It works like this:
- The benefit period starts from the day you get admitted as an inpatient into the hospital or a skilled nursing facility.
- Your benefit period continues until you’ve gone 60 days in a row without receiving any hospital or skilled nursing facility care.
This means that you might have multiple deductibles to meet in the same year. And for each of those benefit periods, you’ll have to pay a deductible up front before Medicare Part A covers any of your care.
There’s no limit to the number of benefit periods you can have in a single year.
Medicare Part A Costs
Nearly every Medicare member gets Medicare Part A for free, meaning there’s no monthly premium. You might even see Part A referred to as “premium-free Part A” because very few people have to pay for this coverage.
For those who do have a Medicare Part A premium, the cost in 2022 is:
- $274 a month if you have 30 to 39 work credits
- $499 a month if you have fewer than 30 work credits
“Work credits” refers to the way Social Security tallies your work history over the course of your working life. If you’ve got 40+ work credits by the time you’re eligible for Medicare, you won’t have a premium for Part A. If you don’t, you may have to pay the applicable premium.
- Tip: Check with your local Social Security office if you have questions about your work credits. You can also reach the national agency at 1-800-772-1213 or set up a free “my Social Security” account here.
But even if you don’t have a premium, you’ll still have out-of-pocket costs. In 2022, expect to pay the following under Medicare Part A:
- A $1,556 deductible per benefit period
- $389 per day for days 61 to 90 as a hospital inpatient
- $778 per day for days 91+ as a hospital inpatient
- $194.50 per day for skilled nursing facility (SNF) care for days 20 to 100
- All costs of SNF care for days 101+
Important note: once you hit day 91 as a hospital inpatient, you’ll start using up “lifetime reserve days.” You only get 60 of these total, spread across your lifetime (not per benefit period). After you’ve used them up, you’ll pay the full cost of your hospital care.
And keep in mind that under Original Medicare, there is no annual cap on how much you can pay out of pocket, like there is with Medicare Advantage. You’ll pay your portion of your bills regardless of how high they get.
When can I enroll in Medicare Part A?
Original Medicare is open to people age 65 or older, or younger people with certain disabilities. For some, enrollment in Medicare Part A is automatic. Once you’re eligible, you’ll be enrolled without having to do anything. This applies to:
- People who are already drawing Social Security or Railroad Retirement Board benefits for at least 4 months before turning 65;
- Those under the age of 65 who have been receiving Social Security disability benefits or certain disability benefits from the Railroad Retirement Board for 24 months; or
- People with amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease).
If you’re drawing Social Security or Railroad Retirement Board benefits, you’ll be automatically enrolled into Original Medicare (Parts A and B together) and benefits start the first day of the month you turn 65. If your birthday falls on the first day of the month, your benefits will start on the first of the previous month.
For people who receive disability benefits, you’ll get a Medicare card in the mail 3 months before your 25th month of disability benefits starts. And for people with ALS, a card will arrive in the mail the same month disability benefits begin.
If these automatic enrollment scenarios don’t apply to you, then you’ll need to sign up on your own for Part A when you’re first eligible. This mainly means people who aren’t getting Social Security (or Railroad Retirement Board) benefits, but it also includes people with end-stage renal disease (ESRD).
For people who have to enroll themselves, there’s a window of opportunity to do it. It’s called the initial enrollment period (IEP), and it works like this:
- Your IEP runs for 7 full months, including the 3 months before the month you turn 65, the month you turn 65, and the 3 months following that month.
- For example, if your birthday is June 8th, your IEP will run from March 1st through September 30th.
- During the IEP, you can sign up for Medicare Parts A and/or Part B. This is the best time to do it, since you might owe a penalty fee if you don’t enroll when you’re first eligible but later decide to sign up.
Important note about enrollment: if you’re eligible for premium-free Part A, then you can actually enroll anytime after your IEP starts, even if it’s past the initial deadline. There’s no penalty because there’s no cost to you. And whenever you do enroll, coverage will be retroactive to 6 months before you sign up (but no further back than when your initial eligibility window opened).
However, those who have a premium for Part A may face a penalty if they sign up later. If you don’t enroll in Part A when you’re first eligible and don’t qualify for the premium-free version, then you’ll have to wait until a set enrollment period to sign up. And once you enroll, you might have a penalty on top of your premium.
- Note: to actually enroll in Original Medicare, you’ll need to contact Social Security. You can apply for Parts A and/or B online, through your local Social Security office or via phone. (Railroad retirees can call the Railroad Retirement Board at 1-877-772-5772.)
Other Enrollment Periods
Missed your initial enrollment period for Medicare Part A or didn’t think you needed it? As we said in the last section, those who get premium-free Part A can enroll anytime. Coverage will be backdated 6 months (or no further than the start of your IEP).
But if you’ve missed your IEP and you have to pay a premium for Part A, then you’ll have another chance to sign up from January 1st through March 31st of each year. This is called the General Enrollment Period (GEP) for Medicare, and it’s specifically for people who didn’t use their IEPs to enroll in Parts A and/or B.
If you use the GEP to enroll in Medicare Part A, then your coverage will start on July 1st. You also may have to pay a penalty, which will last for twice the number of years you could have had Part A but didn’t.
This all assumes, of course, that you don’t meet any special enrollment criteria. For example, if you’re still working when you become eligible for Medicare, you can keep any job-based coverage you have instead and delay Medicare enrollment. (Talk to your company’s HR or benefits department for more info.)
Barring a special signup window, though, you’ll need to enroll in Part A when you’re first eligible if you don’t get it premium free.
By the time you reach Medicare eligibility, you might have a nice nest egg set aside to enjoy your retirement. Or you might not. Either way, the cost of Medicare can be high, maybe even higher than you were planning for. If you need help paying premiums for Medicare Part A — assuming you don’t get it for free — then there are options.
Contact Medicare directly to talk about financial assistance programs. You might qualify for Medicaid in addition to Medicare, for instance, or there may be other options available. It doesn’t hurt to ask.
As for the Medicare Part A deductible and coinsurance, a Medigap policy may help you offset some of these costs. While Medicare supplement plans do come with their own premiums, the monthly cost may save you money in the long run on actual care.
There’s also the option to switch to a Medicare Advantage plan. By law, these private Medicare plans must cover at least everything that Original Medicare covers. That means you get the same coverage as you would under Part A (and Part B) but with the potential for broader coverage, like an unlimited number of inpatient hospital stays or a lower per-day Part A coinsurance.
Medicare Advantage plans vary widely in cost and coverage. Medigap plans are standardized in almost every state, but the cost can differ significantly. In any case, make sure you compare different policy types carefully so you can get the right coverage for your needs and budget.