How does Medicare work?

What is Medicare Part A?

How does Medicare work?

Your Medicare information guide

Skip the intro and START LEARNING!

“What is Medicare Part A?”
&
“What is covered under Medicare Part A?”

These are the two most common questions everybody has when it comes to their Part A benefits. A few others that always get asked and will be covered below are:

"Do you have to sign up for Medicare Part A?"

"How much does Medicare Part A cost?"

"How much is the Medicare Part A deductible?"

If you haven’t already, refer to my Medicare 101 guide, for a quick easy to read description of all of the different parts of Medicare.

Below is a guide that is not all inclusive. Should you have a question about whether or not something is covered, contact your health care provider or check with Medicare to be certain.


Jump straight to:

What does Medicare Part A cover?

Your Medicare Part A coverage can be thought of as hospital coverage.

It will cover reasonable inpatient expenses such as:

  • Semi-Private Room unless a private room is deemed medically necessary
  • Food & Drinks
  • General Nursing
  • In-Patient drug treatment
  • Other in-patient costs & expenses
  • Costs related to care in a Skilled Nursing Facility (NSF)
  • Costs related to care in a Long-term Care Hospital (LCTH)
  • Hospice care
  • Part-time in home health care

Again, this is not all inclusive and whether something will be covered or is often times determined by whether or not the service was deemed medically necessary. If you are in question about whether or not something is covered it is best to contact your health care provider.

You may also check whether or not something is covered
by using the Medicare Coverage Search feature.

How much does Medicare Part A cost?

For most people Medicare Part A is FREE! Kind of. Remember those deductions for FICA on your paycheck? For as long as you’ve been working you’ve been paying into Medicare. Well… since 1966 anyway. That’s when the government first started including Medicare deductions under FICA.

On to what you really want to know:

“How do I qualify for premium free Medicare Part A?”

The most common scenarios are:
 

If you are 65 or older:

  • You are eligible for, or receiving retirement benefits from Social Security
    -OR- the Railroad Retirement Board
  • You or your spouse had Medicare-covered government employment
If you are under 65:
  • You have been receiving disability benefits for a period of at least 24 months
    from Social Security -OR- the Railroad Retirement Board
  • You meet certain requirements AND have ESRD (End-Stage Renal Disease)
  • You have Amyotrophic Lateral Sclerosis (ALS) commonly known as Lou Gherig’s disease and you’re receiving Social Security Disability for it
If you do not qualify for premium free Medicare Part A, you could pay as much as $422 per month, but some people will pay less.
 
There are other less common situations where you may qualify for premium free Part A. To find out if you are eligible, or to see how much you’ll have to pay for Medicare Part A, contact the Social Security Administration.

Medicare Part A enrollment guide

During the initial enrollment period (IEP) you will have an opportunity to enroll in Medicare Part A.

In some situations you’ll automatically be enrolled in Original Medicare Part A:

  • If you’re getting benefits from Social Security or the Rail Road Board at least 4 months prior to turning 65 you’ll automatically be enrolled in Medicare the first day of the month that you turn 65, unless you were born on the 1st of the month in which case you’ll receive it on the first day of the month prior to your 65th birthday.
  • If you have ALS (amyotrophic Lateral Sclerosis) also called Lou Gerhig’s disease you will be automatically enrolled the month your disability benefits begin.
  • If you’re receiving Social Security Disability or certain disability benefits from the Rail Road Board (RRB) you’ll automatically be enrolled as of the 25th month that you’ve been receiving those benefits

For everyone else:

Apply online at the Social Security Administration’s website

Visit the nearest Social Security Office

Dial 1-800-772-1213 to enroll by phone

Apply by mail

If you qualify for premium free Part A you can enroll at any time even after your Initial Enrollment Period (IEP) has passed. If you have to pay for Part A and you miss your opportunity to enroll during your Initial Enrollment Period (IEP) you’ll have to wait until the Medicare General Enrollment Period (GEP) which happens from January 1st– March 31st of each year, unless you are eligible for a Special Enrollment Period (SEP). If you enroll during the General Enrollment Period (GEP) coverage will not begin until July 1st of the same year, so it’s best not to delay.

For more detailed information on how to enroll, when you can or should enroll, and the other nuances of enrolling in Original Medicare check out the article I wrote: “The Ultimate Guide to Medicare Enrollment” I cover topics such as avoiding late enrollment fees, the Annual Election Period (AEP), qualifying for a Special Enrollment Period (SEP), and so much more. It’s an extremely detailed article on everything enrollment related.

Late enrollment penalty for Medicare Part A

If you aren’t eligible for premium free Part A and decide to enroll after your Initial Enrollment Period (IEP) ends, you may be subject to a late enrollment penalty unless you qualify for a Special Enrollment Period (SEP). Your monthly premium is subject to go up by 10%. Luckily the penalty doesn’t last forever. The period of time it will go up depends on the period of time you went without Part A while eligible. You pay the the higher premium for twice the amount of years that you went without it. So if you went without Part A for 3 years after your IEP ended, you would have to pay the higher premium for 6 years.

Here’s an example:
Your cost for Medicare Part A is $422 and you went 3 years without coverage after your Initial Enrollment Period (IEP) ended.

To calculate your late fee:
(Medicare Part A premium x late penalty)

$422 x .10 (10%) = $42.20

To calculate your total premium:
(Medicare Part A premium + late fee)

$422 + $42.20 = $464.20

Your total cost for your Medicare Part A coverage is $464

To calculate the length of time:
(Years without coverage x 2)

3 x 2 = 6 years

You will pay $464 for 6 years.

Medicare Part A cost sharing guide

Medicare Part A in-patient hospital Cost-Sharing

  •  $1340 deductible for inpatient hospital stay per benefit period*
  • $0 co-pay for days 1-60 for each benefit period*
  • $335 co-pay for days 61-90 for each benefit period*
  • $670 co-pay for each lifetime reserve day**
  • All costs once past 90 days once your lifetime reserve days are exhausted

*a benefit period is defined as beginning the first day you’re admitted in to the hospital and ends once you haven’t received any inpatient care for 60 days in a row. After that a new benefit begins and you WILL be subject to another deductible.
**Once you pass 90 consecutive days you are in a period defined as lifetime reserve days.
You are only eligible for 60 lifetime reserve days over your lifetime

Medicare Part A Skilled Nursing Facility Cost-Sharing

  • $0 co-pay for days 1-20
  • $167.50 co-pay for days 21-100
  • All costs beyond 100 days

What Original Medicare does NOT cover

  • Long-term Care
  • Most Dental expenses
  • Most routine Eye, Vision, and Hearing exams
  • Routine foot care
  • Acupuncture
  • Cosmetic Surgeries/procedures
  • Prescription drugs picked up at your local pharmacy
  • Services not deemed medically necessary by your doctor or health care provider

As you may have read earlier I can make no guarantee as to what will or will not be covered. To be sure, check with your health care provider. You may also check whether or not something is covered by using the Medicare Coverage Search feature.

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Sean Senseman

Sean Senseman

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