Medicare Part A: Understanding Medicare's Hospital Insurance

Medicare Part A: Understanding Medicare's Hospital Insurance

Medicare Part A helps pay for inpatient services such as you'd receive in a hospital or skilled nursing facility.

Medicare Part A is often referred to as hospital insurance, because it generally covers inpatient hospital care, home health services, and hospice care. So long as it is not long-term or custodial care, Part A may also cover nursing home care.

If you live in the United States and began receiving Social Security or Railroad Retirement Board benefits at least four months before your 65th birthday, you are automatically enrolled in Medicare Part A and Part B (Original Medicare). However, if you are not collecting retirement benefits yet, you'll have to sign up for Medicare (please see the next section).

People who qualify for Social Security disability benefits are automatically enrolled in their 25th month of collecting benefits. The exception is if you qualify due to amyotrophic lateral sclerosis (ALS, or Lou Gehrig's disease). In that case, you'll be enrolled in Medicare during your first month of benefits.

When can I enroll in Medicare Part A?

There are two times you can sign up for Medicare Part A: your Initial Enrollment Period (IEP) and the General Enrollment Period (GEP).

  • IEP: Starting three months before the month of your 65th birthday and lasting the following three months, everyone's IEP is different. Signing up during the three months before your birthday ensures coverage starts the month you turn 65; signing up after delays coverage. Failure to sign up during your IEP leads to late penalties, unless you started receiving retirement benefits at least four months before you turn 65 or qualify for a Special Enrollment Period (SEP).
  • GEP: The General Enrollment Period is from January 1 through March 31 every year. This is the time to sign up if you missed your IEP, and coverage will start on July 1. If your Initial Enrollment Period includes January, February, or March, signing up during this time-frame would count as your IEP.

How much does Medicare Part A cost?

As long as you or your spouse paid Medicare taxes for at least 40 quarters (around 10 years), Medicare Part A is premium-free. If you have not, the Medicare Part A premium for 2023 is $506. If you paid Medicare taxes for 30 to 39 quarters, the premium is $278 in 2023. You may also have to pay late fees if you missed your IEP.

The late penalty for Medicare Part A is 10 percent of your monthly payment, for twice the number of years you missed enrollment. So if you delay enrollment for 12 months, you have two years of penalty payments. However, the penalty only accrues for every full 12 months that pass without being enrolled.

What does Medicare Part A cover?

As stated above, Medicare Part A is hospital coverage. If you are formally admitted to a hospital after a doctor decides you need two or more nights of medically necessary treatment, Part A has you covered. It also covers any type of care that can only be given in a hospital, as long as the hospital accepts Medicare. Services such as chemotherapy, anesthesia, and inpatient dialysis are covered as well, if considered necessary. Medicare Part A will cover blood services if the hospital receives the blood from a blood bank for no charge.

Part A also covers home health services, hospice care, and skilled nursing facilities. For home health services to be covered, you must be determined home-bound and under the care of a doctor and Medicare-certified home health agency. Hospice care is covered if you have a terminal illness and your doctor confirms you have six months or less to live. This includes grief counseling and pain management. To get nursing facility care, a doctor needs to declare you need daily, skilled care.

Medicare Part A does not cover the following unless deemed medically necessary:

  • Custodial care
  • Long-term care
  • Private nursing
  • Private rooms

Should I enroll in Medicare Part A if I already have insurance?

Some people hit their Initial Enrollment Period while working and receiving health insurance from an employer. Whether enrolling in Medicare Part A while already having coverage is the right choice depends on you and your specific health needs and coverage. Typically, it is a good idea to sign up for Part A even if you already have coverage.

About the only time we don't recommend signing up for Part A as soon as you turn 65 is if you're still contributing to a health savings account (HSA). You cannot have any part of Medicare while contributing to an HSA. You can, however, make withdrawals from an HSA when you have Medicare. It's a good idea to talk to your benefits administrator about when to stop those contributions and what happens to your employer coverage when you turn 65.

Medicare Part A vs Medicare Advantage

When you sign up for a Medicare Advantage plan, also known as Medicare Part C, you receive both your Part A and Part B coverage entirely through your Advantage plan. Medicare Advantage plans are offered through private insurance companies, so prices vary in a way you don't see if you choose Original Medicare.

While Medicare Advantage plans vary in price and may cost more than just choosing Part A through Original Medicare, they also tend to offer more benefits. However, if you are signing up for Part A to avoid late fees and already have coverage through work, or simply just don't want to pay a monthly Part A premium, then Medicare Advantage may not be the right choice for you.

Additional resources

Florida native Eric Ruge lives by one rule: Do the right thing. His goal as a Medicare agent is helping people find the right Medicare coverage for their unique medical needs and budget. He believes everyone deserves the peace of mind they get knowing they made the right decision about their Medicare coverage. When he's not working, Eric enjoys spending time with family and friends, watching Tampa sports, and playing the occasional round of golf.


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