What Is Medicare Part A?
Medicare Part A is one of 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 inpatient hospital stays, skilled nursing facility care, inpatient care in a skilled nursing facility, hospice care, and home health care. It covers expenses such as semi-private rooms at skilled nursing facilities, inpatient care, supplies, 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.
- 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 for 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
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. Copays kick in after the 61st day. Patients are responsible for a $352 copay for the 61st to 90th day in the hospital.
Medicare Part A Eligibility
In general, you're eligible for Medicare Part A if you meet the citizenship and residency requirements and you:
- Are age 65 or older.
- Get disability benefits from Social Security or the Railroad Retirement Board for at least 25 months.
- Get disability benefits because you have Amyotrophic Lateral Sclerosis (ALS), also called Lou Gehrig's disease.
- Have end-stage renal disease (ESRD) and meet certain requirements.
How to Sign Up for Medicare Part A
Many people are automatically enrolled when they qualify, and others have to sign up for it. In general, it depends on whether you're receiving Social Security benefits. For example, you may be enrolled automatically in Medicare Part A and Medicare Part B if you:
- Have received benefits from Social Security or the Railroad Retirement Board for at least four months before you turn 65.
- Have received Social Security benefits for at least 24 months.
- Have Amyotrophic Lateral Sclerosis (ALS), also called Lou Gehrig's disease. You will automatically get Medicare Parts A and B when your disability benefits start.
If you have end-stage renal disease (ESRD), you're eligible for Medicare and can enroll in Parts A and Part B. You will need both parts to get the full benefits available with Medicare to cover certain dialysis and kidney transplant services.
If you aren't automatically enrolled in Medicare and you'll be eligible when you turn 65, you should sign up through Social Security during your Initial Enrollment Period. This is a seven-month period that:
- Starts three months before the month you turn 65.
- Includes the month you turn 65.
- Ends three months after the month you turn 65.
In most cases, if you don't enroll in Part B when you first become eligible, you'll owe a late enrollment penalty each month for as long as you have Part B and could have a gap in your health insurance.
Enrollment can be done online, by phone, or at a Social Security office.
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 medical needs for Medicare to cover your stay at a nursing home.
The CARES Act of 2020
On March 27, 2020, President Trump signed into law a $2 trillion coronavirus emergency stimulus package called the CARES (Coronavirus Aid, Relief, and Economic Security) Act. It expands Medicare's ability to cover treatment and services for those affected by COVID-19. The CARES Act also:
- Increases flexibility for Medicare to cover telehealth services.
- Authorizes Medicare certification for home health services by physician assistants, nurse practitioners, and certified nurse specialists.
- Increases Medicare payments for COVID-19-related hospital stays and durable medical equipment.
For Medicaid, the CARES Act clarifies that non-expansion states can use the Medicaid program to cover COVID-19-related services for uninsured adults who would have qualified for Medicaid if the state had chosen to expand. Other populations with limited Medicaid coverage are also eligible for coverage under this state option.