What is Medicare Part A?

Medicare Part A (hospital insurance), is one part of Original Medicare, which helps cover inpatient care in a hospital, inpatient care in a skilled nursing facility (not custodial or long-term care), hospice care, home health care, and inpatient care in a religious non-medical healthcare institution.

Medicare Part A, along with Part B (medical insurance) was established by the federal government in 1965 to provide basic health insurance for seniors who otherwise would not be insured. The Medicare program has changed over the years and is now for people 65 or older, some younger people with disabilities, and people with end-stage kidney disease.

Medicare Advantage plans (Part C) are an alternative to Original Medicare. They offer the same benefits as Medicare Part A and B, plus other things that are not covered by Original Medicare such as dental, vision, and hearing benefits. Medicare Advantage plans’ payment structure for benefits that are covered under Part A, such as inpatient hospitalizations and skilled nursing facility care are different, but the benefits are similar. Of note, if you access hospice care, Original Medicare will pay for everything you need related to your terminal illness.

Medicare Part A is hospital insurance for Medicare beneficiaries that helps pay for hospital, facility, hospice, and home health care services. In order for Medicare Part A to cover costs, inpatient hospitalizations and care that is received in facilities or at home must be deemed medically necessary and skilled, and must be received from a Medicare-certified provider.

Most people get Part A for free, that is, there are no monthly premiums to pay; however, if you access your Part A benefits, you will incur some out-of-pocket costs in the form of deductibles and potentially, coinsurance.

Part A covered services are as follows:

• Blood: If you are hospitalized and need blood, your cost depends on whether or not the hospital gets the blood from a blood bank. If so, there is no charge to you. If the hospital has to buy blood you must either pay the hospital costs for the first three units you get in a calendar year or have someone else donate the blood.
• Home health services: If you have a qualifying hospital or skilled nursing facility stay, Part A will pay for up to 100 days of doctor-ordered home health services, including intermittent skilled nursing care, physical therapy, speech-language pathology, and/or occupational therapy services. Home health care may also include medical social services or intermittent home health aide services. You must be considered homebound, that is you have considerable trouble leaving your home without help because of an illness or injury, or leaving your home isn’t recommended because of your condition.
• Hospice care: Medicare has a hospice benefit that pays for all services related to the care you need if you have a terminal illness (a life expectancy of six months or less). The care is given wherever you live, at home or in a facility.
• Inpatient hospital care: Medicare covers semi-private rooms, meals, general nursing, drugs, and other hospital services and supplies for care you receive in acute care, critical access, and long-term care hospitals, as well as care you receive in inpatient rehabilitation facilities and psychiatric facilities.
• Religious non-medical health care institutions (inpatient care): If you qualify for inpatient hospital or skilled nursing facility care, Medicare will only cover inpatient, non-religious, non-medical items and services like room and board and services that don’t require a doctor’s order.
• Skilled nursing facility care: Medicare covers services that are considered skilled and medically necessary, including a semi-private room, meals, nursing and therapy services and supplies. Typically, Medicare requires an inpatient hospital stay of at least three days before it will pay for a skilled nursing facility. However, if you have a Medicare Advantage Plan, you may not need the three-day minimum hospital stay.

The primary difference between Part A and Part B is what each part covers. Part A helps pay for care and services you need related to inpatient hospitalizations and subsequent care you need in a facility or at home, for a limited time. Part B is for healthcare that is typically received when you are not admitted to a hospital, except for doctor’s visits that occur when you are inpatient. Part B helps pay for healthcare that you receive as an outpatient, such as, urgent care visits, visits to your doctor, durable medical equipment (DME), and preventive care.

Another difference between Part A and B is the out-of-pocket costs associated with each. Most people receive premium-free Part A, but must pay a deductible, and potentially daily coinsurance, if benefits are accessed. Part B always charges a monthly premium ($148.50 for 2021) even if you have a Medicare Advantage Plan. There is also an annual deductible ($203 for 2021), in addition to coinsurance of 20% for most Part B services.

Something that Part A and Part B have in common is that care, services, and supplies must be deemed medically necessary, ordered by a healthcare professional, and received from a Medicare-approved provider in order to be paid for by Medicare.

Most people have premium-free Part A because they or their spouse have worked and paid Medicare taxes, but if you don’t qualify, you can buy Part A. If you paid Medicare taxes for less than 30 quarters, the Part A monthly premium is $471. If you paid Medicare taxes for 30 to 39 quarters, the Part A monthly premium is $259. If you don’t buy Part A when you are first eligible, your monthly premium may go up 10%.

If you access your Part A benefits in 2021 for a hospital inpatient stay, you pay $1,484 deductible for each benefit period. Days 1 to 60 require no coinsurance, but days 61 to 90 include a daily coinsurance charge of $371. Inpatient hospital stays longer than 90 days require a coinsurance of $742 per day for up to 60 days over the course of your life.

If you need hospitalization after using your lifetime reserve days, you are responsible for all costs. Costs for a mental health inpatient stay are the same if you get care in a general hospital, but if you receive care in a psychiatric hospital, there is a lifetime limit of 190 days.

If you qualify, Part A will cover the first 20 days of a skilled nursing facility stay with no coinsurance. Days 21 to 100 incur a coinsurance charge of $185.50 per day. You are responsible for all costs after 100 days.

Part A covers home health care at no cost to you, but you pay a Part B coinsurance of 20% for DME. It also covers hospice care at no cost to you, but you may have a copay for prescription medications and five percent of the Medicare-approved rate for inpatient respite care, depending on your hospice provider. Part A hospice benefits do not include room and board or pay for your caregiver.

If you have a Medicare Advantage Plan in lieu of Original Medicare, your benefits will be similar, but instead of a deductible for hospitalization, you may have a daily copay for the first several days. You may pay a monthly premium and an annual deductible, depending on the plan. Medicare Advantage plans cannot charge more for services like skilled nursing facilities. These plans also have an annual limit for out-of-pocket costs. Check your plan for details.