Everything You Need To Know About Medicare Part A

Updated: Jul 17, 2022

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You hear Medicare talked about in many ways. Original Medicare. Medicare Part A, B, C and D. Sometimes people just refer to Part A or B. But, what does it mean? What do these letters represent? This guide will begin with the basics, focusing first on Part A of Original Medicare.

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Original Medicare consists of two “parts”: A and B. The main difference between parts A and B is the type of coverage they provide. Part B covers outpatient services and procedures, such as doctors’ visits, laboratory tests, and medical supplies like oxygen tanks.

Part A covers inpatient, hospital-type services, such as:

  • Hospital stays
  • Skilled nursing care
  • Inpatient skilled nursing care
  • Hospice care
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How Does Medicare Part A Work?

Your experience with Part A can be split into three main areas:

  • Becoming eligible for Part A coverage
  • Paying for Part A coverage
  • Paying for individual services that are covered under Part A

Medicare Part A covers inpatient, hospital-type services, such as hospital stays, skilled nursing care, inpatient skilled nursing care, and hospice care.

Becoming Eligible For Medicare Part A

There are two main areas of eligibility for Medicare Part A. The first area deals with citizenship status. In order to enroll in Medicare Part A, you must be either a US citizen or a permanent legal resident. Permanent legal residents must have lived in the US for at least five consecutive years.

The other eligibility area involves age. Generally, you cannot enroll in Part A until you turn 65. However, there are a few exceptions to this rule, which are listed below. You can enroll in Medicare Part A at any age if any of the following criteria applies to you:

  • You receive Social Security disability or Railroad Retirement Board Disability payments for 24 consecutive months
  • You are diagnosed with ALS (Lou Gehrig’s disease)
  • You are diagnosed with ESRD (end-stage renal disease)

Paying For Part A Coverage

How much does Part A coverage cost? You are actually probably paying for it right now. This is because if you work or own a business, your Part A is paid for by your payroll taxes. So, if you work long enough, you will qualify for premium-free Part A coverage.

With premium-free coverage, you can be enrolled in Part A at age 65, or even earlier if you meet the criteria, and you will be covered without paying any monthly premiums. Generally, if you qualify for Social Security, you will be covered by Part A without paying an additional premium.

You can also get premium-free Part A if you are married to someone who has earned it by working for a long enough duration of time. This criteria applies even if your spouse has passed away, or if you are divorced.

If you do not qualify for premium-free Part A coverage through work or marriage, you can still get coverage, but you will have to pay the Part A premium. For 2021, the monthly premium for this coverage is $458. This amount is reduced if you have some work history.

Paying For Part A Services

Once you’re enrolled in Part A, you might be surprised to learn that you will still have to pay some out-of-pocket costs for coverage. For instance, if you have to go to the hospital, Part A coverage will only kick in once you have paid the deductible. For 2021, the deductible is $1,408.

Unlike with traditional health insurance, Medicare’s Part A deductible is not assessed on an annual basis. Instead, the deductible applies for each benefit period.

A benefit period can be thought of as an episode of care that is separated from any prior episode by at least 60 days. For example, if you go to the hospital twice within 60 days, that is considered as being a single benefit period. If you stay in the hospital in March, and then are admitted again in June, that would be seen as two benefit periods. In this case, you would have to pay the deductible twice.

Also unlike traditional health insurance, there is no cap on the amount of money you can spend for coverage. This lack of an out-of-pocket maximum cap is one of the prime concerns for people on Original Medicare.

The Part A deductible, and similar expenses in Part B, are often called coverage gaps. Another major gap in Original Medicare Part A and B is prescription drug coverage. Original Medicare does not cover prescription drugs. Instead, you must pay for them out of your own pocket. To avoid this expense, you will need to enroll in a private prescription drug plan.

Enhancing Medicare Parts A and B

The gaps in Part A and B concern many people. To combat these out-of-pocket costs, people often supplement their Original Medicare coverage with private insurance.

Medicare Supplement insurance works with Original Medicare by paying for some, or all, of the out-of-pocket costs that you would normally encounter. To this coverage, add a prescription drug plan to help pay for medications.

Medicare Advantage plans must provide all the benefits that Original Medicare Parts A and B provide.

Another popular option is the Medicare Advantage program. Medicare Advantage plans are actually an alternative to Original Medicare. Also known as Part C, Medicare Advantage plans are contracts between the Medicare program and private insurance companies.

Medicare Advantage plans must provide all the benefits that Original Medicare Parts A and B provide. Many of these plans provide more comprehensive benefits, like vision, hearing, and prescription drug coverage. They also all come with a clear out-of-pocket maximum spending limit, which means that you are protected from being responsible for any sky-high medical bills.

Getting Help with Medicare Parts A and B

Medicare is a valuable benefit that lowers the cost of healthcare for millions of Americans, but an enrollee in this program still has the potential to rack up high out-of-pocket costs. In order to protect yourself, consider adding to supplemental coverage to Part A and B. The best way to go about doing this is by working with a licensed professional to shop for plans, compare quotes, and see which plans your doctors accept.