Medicare Part A: Coverage and Costs for 2020
What is Medicare Part A?
Medicare is a U.S. federal government program that provides health insurance for seniors 65 and older, and younger people who meet certain qualifying conditions.
It is divided into four parts:
Medicare Part A and Part B are also known as Original Medicare. Medicare Part C is also known as Medicare Advantage (private health plans). Medicare Part D specifically focuses on prescription drug coverage.
Part A covers costs associated with costs billed by hospitals or other similar inpatient settings. That may include hospice, skilled nursing facilities, and some home-based health situations.
Medicare Part A coverage
Medicare Part A provides the following coverage:
Part A hospital benefits are broken into 60-day periods.
Everyone will start by paying the deductible, which is $1,408 in 2020. Once you reach the deductible limit, your first 60 days in the hospital are completely covered.
If you have to stay in the hospital for more than 60 days in a row, you will be responsible for coinsurance ($352 per day in 2020) for days 61-90.
If you have to stay even longer, you will be responsible for coinsurance of $704 per day (2019) for days 91 through 150. Your Part A coverage will end after day 150.
Once you have been out of the hospital for 60 days, your “day count” will reset to 0. The next time you’re admitted to a hospital, you will have 60 days of coverage once again.
Medicare also covers up to 190 days per lifetime for inpatient psychiatric hospital care. If you are already hospitalized when you enroll in Medicare, you can be reimbursed for up to 150 hospital days.
Your hospital coverage includes a semi-private room, hospital meals, nursing services, intensive care, drugs and medical supplies used during your stay, lab tests, and x-rays, operating and recovery services, some blood transfusions, rehabilitation, and symptom management.
Part A does NOT include non-medically necessary amenities like completely private hospital rooms, private nurses, and personal care items that hospitals may provide (shower supplies, TV, etc.).
In some cases, an overnight hospital stay does not automatically make you an inpatient. You might assume you’re an “admitted” patient if you are brought to a private or semi-private room, but that may not be the case.
For example, if you’re getting emergency care, same-day surgery, x-rays, or lab tests, you may be considered an outpatient even if you stay overnight. To be considered an inpatient and therefore eligible for Part A benefits, a doctor has to purposely keep you there overnight and then formally admit you as such.
A doctor may keep you for several hours under observation before deciding to admit you. You are considered an outpatient during that observation period and would be covered under Medicare Part B if you have that coverage.
Skilled nursing and nursing home care
Part A covers 100 days of skilled nursing care related to a hospital stay.
Days 1-20 are covered completely, but days 21 through 100 require coinsurance of $176 per day (2020).
If you’re hospitalized for any reason, you have 30 days from your hospitalization to enter a nursing facility (for the same condition) to have that care covered. You must require a level of care that cannot be provided at home or from your outpatient doctor.
Also, the nursing care must be ordered by a doctor and must be administered daily by a professional nurse or therapist.
Like hospital stays, benefit periods last for 60 days. If you leave the facility and are back home for at least 60 days, the next time you enter a facility, your “day count” will reset to 0.
Nursing homes must monitor your condition and your coverage and to report to Medicare whether or not you require Medicare-covered care.
Medicare Part A and Part B do not cover custodial care, which includes daily activities such as bathing, grooming, dressing, meals, and so forth. Part A only covers skilled nursing. You may need to shop for a Medicare Advantage plan that includes long-term nursing care if you require those services.
Part A hospice care is for people who are terminally ill and require counseling, prescriptions, medical equipment, and other supplies for comfortable living.
If you are terminally ill and qualify for hospice care, you and your caregiver or family member will work with a doctor to establish a care plan which often takes place in the home with a family caregiver or private nurse.
When you begin hospice care, you sign off that you are accepting palliative care instead of other Medicare-covered treatments. That means that you have been given six months or less to live, and you are only seeking assistance to live comfortably until you pass. Hospice coverage does not include any further treatment to cure your illness or conditions and does not include room and board.
Your coverage occurs in 90-day periods. After 90 days, your doctor will have to re-certify that you are terminally ill and that you still require hospice care.
If you enter recovery during your hospice care and would like to switch from hospice back to regular treatments, you can do that at any time without losing coverage.
Your coverage includes some doctor and nursing services, medical equipment, prescription drugs for pain and discomfort, homemaker services, some therapy services, counseling, and other related services.
There is no deductible for hospice care, but you will have to continue to pay your Part A and B premiums that you paid before. However, you may be responsible for up to a $5 copay for any pain medications. You could also be responsible for up to 5% of the Medicare-approved amount for inpatient respite care (for your caregivers).
Home health services
If you are housebound or a doctor orders home health care for you, you may be covered by a combination of Part A and Part B benefits.
Medicare does not cover personal care services like bathing, dressing, and using the toilet. It does include home therapy services, certain home medical supplies and equipment, and skilled nursing services such as tube feedings, catheter changes, injections, etc.
Medicare usually pays 100% for nursing and therapy services and 80% for medical equipment.
What’s not covered by Part A?
In many cases, a combination of Part and Part B coverage will meet medical insurance needs in most situations. However, there are some services and items that neither part covers. You’ll have to bear these costs on your own unless you get additional coverage or a Medicare Advantage plan that specifically covers exclusions.
Some of the things Parts A and B do not cover include:
- Cosmetic surgery
- Eye exams for prescription glasses
- Hearing aids and related exams
- Long-term custodial care
- Most dental care
- Routine foot care
- Most prescription drugs coverage
It’s always best to check with Medicare in advance regarding coverage of specific services if you’re not sure about coverage. If you are a low-income individual or family, you may be dual eligible for coverage under Medicaid, which provides added benefits.
Medicare Part A vs. Medicare B
Many people sign up for both Part A and Part B coverage to provide a more comprehensive safety net for their healthcare needs. It’s essential to understand the differences between the two parts of Original Medicare.
Part A covers the services listed above, while Part B coverage includes outpatient medical services, some of which include:
- Ambulance services
- Doctor’s office visits
- Durable medical equipment (DME), such as wheelchairs or walkers
- Bloodwork and lab tests
- Mental health and substance abuse treatment
- Outpatient surgery
- Preventive care services such as flu shots, diabetes screenings, cancer screenings, HIV and STD screenings, wellness visits, nutrition therapy, and others.
Eligibility for Medicare Part A
In general terms, you’re eligible for Part A if you’re 65 or older, a U.S. citizen or permanent legal resident. You’re also eligible if you have qualifying disabilities, or you suffer from End-Stage Renal Disease or Amyotrophic Lateral Sclerosis (ALS, Lou Gehrig’s disease).
You also qualify if you are eligible to receive, or you’re currently receiving Social Security or Railroad Retirement Board benefits.
You can check your eligibility by going to the Medicare Eligibility and Premium Calculator.
In some cases, you’ll have to pay a premium for Part A coverage. In other cases, Part A coverage is free.
Who qualifies for free Medicare Part A?
You are eligible for premium-free Medicare Part A if you meet the following criteria:
- You are a U.S. citizen or legal permanent resident, and;
- You are 65 or older, and you sign up during your Initial Enrollment Period or a Special Enrollment Period, and;
- You or your spouse paid Medicare taxes during your working life for at least 40 calendar quarters (10 years).
If you have very low income, you may also be eligible to have Part A and Part B premiums paid as part of the Qualified Medicare Beneficiary program.
You may also qualify if you were a federal employee at any time after December 31, 1982, or a state or local employee at any time after March 31, 1986.
You have received SSDI benefits for 24 months (except if you have ALS, in which case there is no two-year waiting period).
You already get retirement benefits from Social Security or the Railroad Retirement Board, or you’re eligible for these benefits but haven’t filed for them yet.
Am I eligible for Medicare Part A if I’m younger than 65?
In some cases, the answer is yes.
You are eligible for Medicare benefits under 65 if:
- You have been receiving Social Security Disability Insurance benefits for at least 24 months. This is known as the two-year waiting period. It begins the first month you receive SSDI benefits. You will be automatically enrolled in Medicare starting on your 25th month.
- If you are receiving SSDI benefits because you have Amyotrophic Lateral Sclerosis (ALS, Lou Gehrig’s disease), you will automatically get Medicare benefits the first month you receive SSDI benefits. There is no two-year waiting period.
- You may qualify for End-Stage Renal Disease Medicare (ESRD) if you have been diagnosed with kidney failure, and you’re getting kidney dialysis treatments, or you’ve had a kidney transplant. You must also be eligible to receive SSDI or Railroad Retirement Board benefits, or you or your spouse have paid Medicare taxes long enough as determined by the Social Security Administration.
Medicare Part A Costs
If you qualify, you will be entitled to premium-free Part A Medicare. However, most beneficiaries are still responsible for paying a deductible and coinsurance costs.
If you or your spouse worked and paid Medicare taxes for at least 40 quarters (10 years), you would pay $0 in premiums as long as you sign up during your IEP.
If you paid Medicare taxes for 30 to 39 quarters, your premium would be $252 per month in 2020. If you worked and paid Medicare taxes for less than 30 quarters of your life, your premium will be $458 per month in 2020.
How to apply for Medicare Part A: Enrollment for Original Medicare
If you’re receiving Social Security or Railroad Retirement Board benefits when you first become eligible, you will be automatically enrolled in Original Medicare.
If you’re not currently receiving benefits, like most people, you should apply during your Initial Enrollment Period. This is a 7-month window that starts three months before you turn 65, the month you turn 65, and three months afterward.
You can still enroll in Parts A and B after that time, but you’ll probably have to pay an enrollment penalty, and you won’t be able to enroll until a General Enrollment Period takes place (January 1 through March 31 every year). In some cases, if you qualify, you’ll be able to enroll during a Special Enrollment Period as well.
You can apply in several ways:
- Call Social Security at (800) 772-1213.
- You can apply online.
- Apply in person at a Social Security office. Use this tool to find locations near you.
When am I automatically enrolled in Medicare Part A?
If you are receiving Social Security or Railroad Retirement Board benefits, you will automatically be enrolled in Medicare Parts A and B the month you turn 65. You do not need to do anything
If you are not receiving Social Security benefits during your Initial Enrollment Period, you will have to sign up for Medicare online, over the phone or at your nearest Social Security office. Social Security will send you specific instructions on how to apply for about three months before you turn 65.
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Important deadlines for enrolling in Medicare parts A and B
Unless you qualify for Medicare benefits before 65 due to qualifying health issues, you have several opportunities to apply for Original Medicare, but you can only sign up during a valid enrollment period.
Most of the time, it makes the best sense to apply during your Initial Enrollment Period (IEP). This is a 7-month period that begins three months before the month you turn 65, the month you turn 65, and three months after the month you turn 65.
If you don’t sign up during your IEP, you’ll have other opportunities, but you may incur a late enrollment penalty that you’ll have to pay for the duration that you’re enrolled in Medicare.
If you didn’t sign up during your IEP, and you aren’t eligible to enroll during a Special Enrollment Period, you can sign up during Medicare’s General Enrollment Period (GEP). This takes place from January 1 through March 31 each year.
You will pay a premium for Parts A and B when you enroll during a GEP. Your coverage will not start until July 1 of the year you sign up.
After your IEP ends, you may be able to sign up for Medicare during a Special Enrollment Period (SEP).
If you have coverage under a group health plan through your current employer or union based on that line of work, or you, your spouse (or a family member if you’re disabled), are working, you are covered by a SEP.
You also qualify for a SEP for eight months starting the month after your employment ends or the month after your group health insurance based on your current employment comes to an end.
In some cases, you can also qualify for a SEP if you’re a volunteer serving in a foreign country.
Most of the time, you don’t have to pay a late enrollment penalty if you enroll during a SEP.
What if I don’t want Medicare Part A?
If you qualify for premium-free Part A coverage, there’s not much downside to enrolling. Remember, you’ve already paid for it through taxes while you were working.
Even if you’re still working and health coverage, Medicare can serve as secondary insurance and could pay for services not covered by your work plan.
The only time it may make sense is if you’re still working when you’re enrolled in Medicare and if you have a high deductible health plan along with a health savings account (HSA) that is funded by pre-tax dollars. The IRS says you can’t continue to contribute to a HAS if you’re enrolled in Medicare, which will automatically happen if you are receiving Social Security benefits.
Also, keep in mind that you can’t enroll in a Medicare Advantage plan for enhanced benefits if you do not maintain your Part A and Part B coverage.