All You Need To Know About Original Medicare Part A

Medicare Part A seems to be stuck in the shadow of Part B. People always want to know what the Part B premium is, or is going to be. Many of the people I help with Medicare are worried that they’ll miss their Part B deadline. No one seems to worry about Part A.

Medicare Part A is a crucial part of your coverage, however, so today we’ll dive deep into it, and review what Part A is, what it covers, and what it costs.

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What Does Medicare Part A Cover?

Although Part A is often overlooked, it provides a very valuable part of your Medicare benefits – hospital insurance. Medicare Part A covers the more emergency types of coverage. Part A covers:

• Hospital stays
• Skilled nursing services
• Hospice care
• Home health care

You can almost think of Part A as major medical coverage; you’re not likely to need Part A services very often. However, if you didn’t have this coverage, you’d be exposed to ruinous medical bills if you suffered a major health emergency.

Medicare Part A Hospital Coverage

The hospital coverage of Medicare Part A helps pay for the cost of inpatient hospital stays. You will pay the Part A deductible ($1,484 for 2021) before Part A begins paying benefits. Once you’ve met the deductible, Medicare Part A will cover:

• Up to 60 days in the hospital for $0 co-pay per day
• Days 61 to 90 for $371 co-pay per day
• Days after 90 for $742 co-pay per day for up to 60 “lifetime reserve days”
• Full cost for every day beyond your lifetime reserve days

The co-payments for hospital stays are calculated based on benefit periods. A benefit period begins when you first receive covered Part A services. It ends when you have not received related care for 60 consecutive days.

For example, if you’re admitted to the hospital on July 1st, and stay for three days, your 60 days begin on July 4th (your first day out of the hospital). Unless you receive Part A services (like being re-admitted to the hospital, or getting skilled nursing or home health care), your benefit period will end August 2nd.

In this example, your total stay was three days, so after paying the deductible, you paid $0 in co-pays since your stay was less than 60 days. You can have an unlimited number of hospital stay days in your lifetime as long as none of them last more than 90 days.

Lifetime reserve days are like bonus days that can be used if any hospital stay exceeds 90 days. As soon as you have a stay longer than 90 days, you begin using your lifetime reserve days. These don’t reset; once they’re used, they’re depleted for ever.

However, if you have another hospital stay in a new benefit period (meaning that 60 or more days have passed since you last received Part A services), you only pay the deductible and the daily co-payment. But, if you have another stay longer than 90 days, you’ll use any remaining lifetime reserve days before paying full price.

Medicare Part A Skilled Nursing Coverage

Original Medicare Part A will cover you for skilled nursing services after you’ve been admitted to a hospital for inpatient care. You must first pay the deductible before Medicare begins covering the cost of your skilled nursing services.

It’s important to note that Medicare will not pay for custodial care. If you stay in a skilled nursing facility because you need help with activities of daily living, Medicare won’t help you pay for it.

On the other hand, if you need skilled nursing care while you’re staying in the hospital, Part A will cover this. Once you’ve met the deductible, Medicare Part A will cover you for:

• 20 days at $0 co-pay per day
• Days 21 to 100 for $185.50 co-pay per day
• Days over 100 you pay full cost

There are no lifetime reserve days for Skilled Nursing coverage.

Medicare Part A Hospice Coverage

When it comes to hospice coverage, Part A will cover the cost for hospice care:

• At home, or
• At a Medicare-approved inpatient facility

There is no additional daily co-payment for Medicare-approved hospice care. However, Medicare won’t cover things like:

• Room and board
• Medications intended to cure your illness
• Medical treatments intended to cure your illness

Costs for treatments and necessary medications are limited to no more than $5, and you do not have to pay the Part A deductible for hospice care.

Medicare Part A And Home Health Services Coverage

Part A will cover a number of health services received in your home. There are three requirements to receive services in your home:

• You must be under the care of a doctor as part of a plan of care
• Your doctor must certify that you need intermittent skilled nursing care like physical, speech, or occupational therapy
• You must be homebound

You’ll have to pay the Part A deductible first; after that, you pay $0 for home health services. You will pay 20% of the cost of any durable medical equipment needed for your treatment (think walkers, braces, insulin pumps).

What Are The Medicare Part A Eligibility Rules?

There is only one requirement for becoming eligible for Original Medicare:

• You must be a United States citizen, or
• You must be a Permanent Legal Resident

If you’re a Permanent Legal Resident, you must have lawfully resided in the United States for five consecutive years.

This is the basic rule in order to gain eligibility for Medicare. This rule doesn’t tell you when you’ll actually enter the program and start getting benefits.

As long as you meet the citizenship or legal resident requirement, you can expect to enter Medicare Part A and B when one of these events occurs:

• You turn 65 years old (ageing-in to Medicare)
• You receive disability payments from Social Security or the Railroad Retirement Board for 24 consecutive months
• You’re diagnosed with A.L.S. (Lou Gehrig’s disease)
• You’re diagnosed with End Stage Renal Disease (ESRD)

You can think of these events as the triggers that activate your benefits. Until one occurs, you’re not in the program receiving benefits.

When one of these events does happen (for most people, its turning 65), your entry into Medicare Part A is automatic in some cases. In others, you’ll have to manually enroll.

How Much Does Medicare Part A Cost?

We’ve already reviewed the costs for Part A services – the deductible and various co-payments. Here, we’ll talk about paying for Part A coverage.

Most people I speak with about Medicare know that Part A is “free.” Nothing is truly free, of course. Most people get Part A without paying a premium for the coverage. This is because you’ve been paying for Medicare Part A since you started working.

Part A is paid for through payroll taxes known as FICA. FICA taxes are the amounts that are taken out of your paycheck each pay period. Your employer matches your FICA taxes. If you’re self-employed and don’t receive W2 wages, you pay for both the employee and employer portion of FICA.

As long as you pay these payroll taxes for 40 quarters (which is ten years of full-time work) you’ll receive Medicare Part A for no additional premium. Note that this is the same requirement to receive Social Security Income in retirement. If you’re eligible for Social Security, you’ll get premium-free Part A, too.

What if you don’t work enough, though? You may still qualify for Premium-free Part A based on marriage. If your spouse worked long enough, you’ll also get Premium-free Part A, even if you’re divorced or your spouse has died, as long as you meet these criteria:

• You’ve been married for at least 1 year
• You were married for at least 9 months before your spouse died, and you’re currently single
• You were married for at least 10 years before you divorced, and you’re currently single

If you don’t meet these criteria either, you can choose to enroll in Part A and pay the premium. For 2021, the cost is $471 per month. Note that if you do have some payroll tax history, this amount will be reduced.

What Is The Difference Between Medicare Part A and Part B?

Now that we know how Part A works we’ll compare it against Part B. For starters, Original Medicare Part B covers you for outpatient services. These tend to be more day-to-day, non-emergency things. Think of doctors appointments, routine lab work, and x-rays.

Another key difference is in how you pay for your coverage. We know that you pay for Part A during you working career and that most people don’t pay a premium for it when they enter Medicare.

For Part B, it’s just the opposite. You don’t start paying for Part B until you actually enroll in the program. Once you’re in, you pay a monthly premium for coverage. For 2021, the base premium is $148.50 per month. This amount is adjusted based on your income levels.

Medicare Part A And Private Insurance

The various out of pocket costs associated with Medicare Part A can add up. If you need Part A services, you can expect to pay, at a minimum:

• The Part A deductible ($1,484 for 2021)
• Daily co-insurance for hospital stays over 60 days or skilled nursing care lasting longer than 20 days

You also need to know that you might pay the Part A deductible more than once in a year. This is totally different from private health insurance. People are always surprised when I tell them about this. You pay the Part A deductible every time you begin a new benefit period.

As we talked about earlier, a benefit period begins when you’ve gone 60 consecutive days without using Part A services. So, if you have two or more hospital stays separated by at least 60 days, you’ll pay the deductible multiple times.

Also, there’s no out of pocket limit on you spending with Original Medicare Part A or B. This is also very different from private insurance. You have unlimited liability for medical bills with Original Medicare. If you have multiple hospital stays, or a very long stay (more than 60 days) you could easily owe tens of thousands of dollars.

In order to protect themselves from these gaps in Original Medicare, I help my clients find private insurance options. The two main choices are Medicare Supplement Insurance plans and Medicare Advantage plans.

With either of these plan-types you can put a hard cap on your total out of pocket costs for each year. In addition, and depending on which plan type you choose, your deductible and co-payment costs could be substantially lowered as well.

If you know you need to do something about your Medicare coverage, reach out to me today. By phone or email, I can answer any questions you might have. We’ll review the plans in your area and find one that meets your needs. We can even enroll you in the plan of your choice online or over the phone.


Let’s start today with a free, no-pressure consultation. Still have questions? Leave me a comment below and I’ll answer it. Or, let me know what other topics you’d like to see covered.