Medicare is a multipart, government-sponsored health insurance plan. The costs of Medicare Part A vary, depending on factors specific to each person.
Part A covers inpatient hospital services, some aspects of emergency treatment, and end-of-life care.
An estimated 60 million people in the United States receive Medicare benefits.
This article describes how much a person can expect to pay for Medicare Part A, including any out-of-pocket costs that apply.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
For most people aged 65 years and older, the premium for Medicare Part A is $0.
According to the Centers for Medicare & Medicaid Services, an estimated 99% of Medicare beneficiaries do not pay a Part A premium.
This $0 premium applies to people who meet at least one of the following requirements:
- They have worked 40 quarters or more while paying Medicare taxes.
- They have received disability benefits from the Social Security Administration or Railroad Retirement Board for at least 24 months.
- They have end stage renal disease or amyotrophic lateral sclerosis, also known as ALS or Lou Gehrig’s disease.
If a person or their spouse is at least 65 but has not completed the 40 quarters, they can still qualify for Medicare Part A.
In this case, they may have to pay one of the following premiums for Part A in 2021, depending on how long they have worked while paying Medicare taxes:
- 30–39 quarters: They and their spouse may have to pay a monthly premium of $259 for Part A.
- Under 30 quarters: They and their spouse may have to pay a monthly premium of $471 for Part A.
Around 1 in 7 of people who receive Medicare benefits are under 65 years of age and have a long-term disability, according to the Kaiser Family Foundation.
Even for people who pay no premium for Part A, this component of Medicare is not always free — a person may face out-of-pocket costs, including deductibles and coinsurance payments. These can change from year to year.
The following are costs of Medicare Part A:
- Inpatient deductible: $1,484 per benefit period
- Daily coinsurance when a person has been an inpatient for 61–90 days: $371
- Daily coinsurance for lifetime reserve days: $742
- Skilled nursing facility (SNF) coinsurance: $185.50
A benefit period starts when a hospital admits a person as an inpatient. The period ends 60 days after discharge, either from the hospital or an SNF.
If the person requires care for longer than 60 days, they will have to pay coinsurance for up to 90 days.
If the person later requires another hospital stay, the benefit period will restart.
Many people refer to Medicare Part A as “hospital coverage.” Examples of the services that Medicare Part A covers include:
- home care for certain medical issues
- a stay at a hospital or SNF for treatment
- hospice care
Part A covers inpatient treatment and services to address active health problems that medical care can improve over time.
For example, if a person has broken a hip, they require inpatient treatment, possibly including surgery. Afterward, the doctor may recommend a transfer to an SNF, which will provide physical therapy and changes of surgical dressings, for example. Medicare Part A covers these services.
However, Part A only covers the costs of treatment for active health problems.
This component of insurance would not cover services at an SNF if the person only requires assistance with bathing, feeding, or dressing. Medicare does not consider these services to be medical treatments.
A person can contact Medicare to ask about coverage of specific services and treatments. Doing so can help minimize out-of-pocket costs.
If a doctor thinks that Medicare may not cover a specific service, they may require the person to sign a notification of possible costs.
In 2016, people with Medicare parts A and B spent an estimated $5,806 in out-of-pocket expenses, according to the Kaiser Family Foundation.
An estimated 32% of this amount — or $1,014 — accounted for costs of stays at long-term care facilities.
Around 22% ($712) of the out-of-pocket expenses went toward medical providers and supplies. Prescription drug costs accounted for 21% ($651) of these expenses.
Some people choose to reduce out-of-pocket costs associated with Medicare Part A by purchasing Medicare supplement insurance, or Medigap. Private insurers administer Medigap plans.
A person must have Medicare parts A and B to qualify for Medigap. People with Medicare Advantage cannot purchase a Medigap plan. Medicare Advantage is a combination plan, often providing the coverage of parts A, B, and D.
Medicare requires that the various private providers offer consistent Medigap plans. Each plan is assigned a letter, from A to N.
Medigap plans can help offset certain costs of Medicare Part A, including:
- the coinsurance
- hospice care coinsurance or copayments
- the deductible
Costs of Medigap plans vary, based on:
- where a person resides
- whether they have preexisting health issues
- the time of year that a person applies
However, these policies are likely to be most affordable during the Medigap open enrollment period.
A person can enroll in a Medigap plan within 6 months of the original enrollment period. During this time, an insurer cannot refuse to offer a person a Medigap policy based on preexisting medical conditions.
Most people do not pay a premium for Medicare Part A. However, they may still face out-of-pocket expenses, including deductibles and coinsurance payments.
If a person has worked and paid Medicare taxes for at least 40 quarters, they and their spouse are eligible to receive Part A with no premium.
Anyone with questions about coverage or the best time to enroll in a plan should ask their doctor or contact Medicare directly.