Among all of the Medicare plans available, Part A is the part that people misunderstand the most. One of the biggest misunderstandings is whether or not you have to pay for Medicare Part A health care at all. You may have heard of premium-free Part A, but does that mean that Part A is actually free?

Unfortunately, there is no way to get Part A insurance in a way that is truly free. Even if you don’t pay for Medicare Part A premiums, there are still costs associated.

What is Medicare Part A?

Medicare Part A covers your hospital stays and other inpatient care at skilled nursing facilities as well as some in-home care. Unlike most health insurance plans you may have had in the past, Part A only covers your inpatient care. Ordinary doctors visits are covered by Medicare Part B, and prescription drug coverage is offered by private Medicare Part D plans.

Remember, the following discussion is only relevant to your Part A hospital insurance.

How do I get Medicare Part A?

Part A, along with Part B, is part of Original Medicare. This consists of basic Medicare coverage that most people obtain when they turn 65. Original Medicare covers both inpatient and outpatient health care, with the exception of vision and dental.

Medicare Part A eligibility

Original Medicare (Parts A and B) is available to people who fulfill one or more of the following conditions:

• 65 and older
• Disabled
• Dealing With End-Stage Renal Disease (ESRD)

If you fulfill one of these qualities, you will be able to get Medicare Part A and Part B insurance. However, getting premium-free Part A has distinct qualifications.

How can I get premium-free Part A?

In order to qualify for premium-free Part A, there are a few additional things that you need to do. Notably, you or your spouse must have worked and paid Medicare Taxes for 40 quarters, which amounts to ten years. If you don’t fulfill this requirement, you will still be able to get Medicare Part A, but you will not get premium-free Part A.

If you or your spouse paid Medicare Taxes for under 30 quarters, you will have to pay $505 per month in Medicare premiums. If you paid Medicare Taxes for 30-39 quarters, then your Part A premium will be $278 per month. In these situations, Medicare Part A will certainly not be free and will cost you more per month than most other parts of Medicare will.

Do I need Social Security?

If you enroll in Social Security, you will be able to automatically enroll in Medicare Part A and Part B medical insurance when you turn 65. One of the benefits for making sure you are enrolled in Social Security is that you can have your Medicare Part B premiums deducted from your Social Security benefits.

If you are eligible to receive Social Security or Railroad benefits, you will automatically be eligible for premium-free Part A.

Premium-free Part A: Lower Medicare costs, but not free

In some sense, premium-free Part A may seem free. However, there are two important ways in which premium-free Part A is not free.

First, receiving premium-free Part A is dependent on your tax history. You can think of paying the Medicare Tax for over 40 quarters as your way of paying for premium-free Part A later on. Although you won’t have to pay monthly premiums, you can’t get premium-free without paying for it gradually over a ten year period through your taxes.

Second, it is important to note that premium-free Part A still requires you to pay the Medicare coinsurance. This can amount to quite a lot of money in some circumstances, and we’ll go over the details later on. The main thing to remember is that although you won’t pay premiums, you will still have other fees to pay, both under other parts of Medicare and under Part A specifically.

Part A: Deductible, coinsurance, and other costs

If you have premium-free Part A, then you won't pay anything for Part A on a monthly basis. However, you will start paying for your medical care once admitted to an inpatient care facility, if your Part A deductible applies. More fees will apply the longer your hospital stay goes on.

Part A deductible

The Medicare Part A deductible is $1,632 in 2024. You will be responsible for all of your inpatient medical costs up to this amount, in each benefit period. Once you reach your deductible, Medicare will start paying for your medical care.

How does the Part A coinsurance fee work?

The Medicare Part A coinsurance works a bit differently from other coinsurance structures you may have seen. Most of the time, coinsurance fees are a percentage of your overall bill or your insurance-approved amount. In the case of Part A, they are a flat fee per day of inpatient care, and in that sense almost function like a copayment.

For the first 60 days that you spend in an inpatient facility in each benefit period, you will pay $0 per day once you have met your deductible. For days 61-90 of your inpatient care in the same benefit period, you will pay a coinsurance of $408 per day.

Lifetime reserve days: Day 91 and beyond

Once you reach day 91 of your hospitalization in a given benefit period, each day will count as a “lifetime reserve day”. Each Medicare beneficiary receives 60 lifetime reserve day, and these do not “reset” at the beginning of each new benefit period. As their name indicates, these are one-time-use days that are intended to cover a given beneficiary’s lifetime.

Once you start to use your lifetime reserve days, you will pay a $816 per day coinsurance. After all of your lifetime reserve days are used in that benefit period, you will be responsible for all of the hospital fees.

Example

Let’s take a look at an example to see how this can work in practice.

Suzy gets admitted to the hospital towards the end of her benefit period. She has 30 lifetime reserve days.

Suzy covers her deductible of $1,632 in one day and then has her medical bills covered by Medicare Part A.

For the first 60 days that she spends in the hospital, she spends $0 out-of-pocket.

For days 61-90, Suzy pays $408 per day.

After day 90, Suzy spends another 40 days in the hospital, spending $816 per day for 30 days, and using up all of her lifetime reserve days.

For the last ten days that Suzy spends in the hospital, she must pay all of the costs out-of-pocket. Once a new benefit period starts, Suzy will again have to pay towards her Part A deductible and pay $0 out-of-pocket until she reaches day 61 of that new benefit period.

Part A coverage under Medicare Advantage

Medicare Advantage, also known as Part C, is a way of getting your Original Medicare coverage through a private insurance company. Basically, private insurance companies can sell insurance plans that cover at least what Original Medicare covers, although many plans cover more. You will be able to get your Medicare coverage through these companies instead of through the government if you decide that this is what’s right for you.

Medicare Advantage plans are not free and will have monthly premiums just like any other private insurance plan. Although Medicare Advantage provides the same coverage that Original Medicare does, it functions like any other private insurance plan, including familiar things like provider networks and copayments.

Medicare Advantage plans are a complex topic on their own, but needless to say, they are not free.

So, do I Really have to pay?

No matter what your situation is, you will have to pay for Medicare Part A in some way or other. However, most people do qualify for premium-free Part A, which can take a large part of the financial burden off. If you have premium-free Part A, this is the closest to free that Medicare Part A can get, but there is no way to remove or reduce your coinsurance payments or deductible. For many people, premium-free Part A can still result in entire years where they pay no Part A fees at all, if they are never hospitalized.

It’s important to understand these details about your Medicare costs under Part A, as well as the other parts of Medicare, so you don’t have to deal with any surprises if you do spend some time in the hospital.

Additional resources

• ClearMatch Medicare: Find a Medicare Plan
• Medicare.gov: Costs