What Is Medicare Part A, Hospital Insurance?

Medicare Part A is one of the four components of the federal government’s health insurance program for senior citizens and other eligible people. Medicare Part A helps pay for bills related to hospital care, skilled nursing facility or nursing home care, hospice care, and home health services. It covers expenses such as semi-private rooms at skilled nursing facilities, inpatient care, supplies, and drugs during a hospital stay as well as physical and occupational therapy in your home if you are home-bound. Doctor’s services, medication, and grief-and-loss counseling for terminally ill patients are also covered. 

Key Takeaways

  • Medicare Part A pays for care at a hospital, skilled nursing facility or nursing home, and for home health services.
  • Most people receive Part A free because they’ve paid the Medicare payroll tax during their working years.
  • If you haven’t started collecting Social Security at age 65, you need to enroll in Medicare online, by phone, or at a Social Security office.
  • Medicare doesn’t cover all services, such as simple custodial care in a nursing home if the patient doesn’t need other types of care. 

Understanding Medicare Part A, Hospital Insurance

Enrollees who paid Medicare taxes during their working years or people whose spouse paid these taxes don’t pay premiums for Medicare Part A once they’re 65 years old. This means you've already paid your premiums through the 1.45% Medicare payroll tax that you and your employer each paid on all of your wages.

If you didn’t pay this tax during your working years, the premiums are several hundred dollars per month. This can be as high as $458 in 2020. Younger people who receive long-term Social Security disability benefits also qualify for premium-free Part A. Even when Medicare Part A is premium-free, however, most people will still have out-of-pocket expenses for co-payments and coinsurance.

People insured under Medicare still have to pay deductibles, too. For 2020, deductibles for inpatient hospital stays are $1,408. This payment covers the first 60 days of a patient's stay in the hospital. Co-pays kick in after the 61st day. Patients are responsible for a $352 co-pay for the 61st to 90th day in the hospital.

Medicare Part A complements Medicare Part B, so most people who get one are required to get the other. Many people will be automatically enrolled when they qualify. A common situation where people need to enroll manually is if they are 65 years old but haven’t started claiming Social Security benefits yet. Enrollment can be done online, by phone, or at a Social Security office.

People who enroll in Medicare Part A must also get Part B.

Special Considerations for Medicare Part A, Hospital Insurance

Although Medicare Part A covers many hospital-related services, it doesn’t cover everything. Providers must ask patients to sign a notice before receiving treatment when a service may not be covered. This procedure allows the patient to choose whether to accept the service and pay for it out of pocket or to refuse the service.

To be proactive about keeping your medical bills down, it’s a good idea to find out before using a Part A service if Medicare will cover all, part, or none of the cost. If Medicare won’t cover enough of the expense, find out why. There may be an alternative that is covered that would still help you, or you can file an appeal to try to get the coverage decision changed in your favor.

The three reasons why Medicare Part A might not cover something are:

  • General federal and state laws
  • Specific federal laws about what Medicare covers
  • Local Medicare claims processors’ assessment of whether a service is medically necessary

One example of a service Medicare does not usually cover is custodial care in a skilled nursing facility—help with basic activities of daily living, such as getting dressed, bathing, and eating—if it’s the only care you need. You must have more serious needs for Medicare to cover your stay at a nursing home.