Part A Benefits and Costs
- Find out everything older adults might need to know about Medicare Part A in 2021, including what it pays for, how much it costs and what it takes for seniors to sign up.
Medicare is the federal government’s principal health insurance program for U.S. citizens aged 65 and over. More than 60 million Americans get all or part of their healthcare services through Medicare, and understanding how the program works is key to ensuring adequate health coverage for older adults in the United States.
Medicare Part A pays for inpatient services at hospitals and other facilities. Part A is one of the major components of Original Medicare along with Medicare Part B, which is medical insurance for outpatient care and medical equipment.
What Is Medicare Part A?
Medicare Part A is the most common element of Medicare coverage, which provides hospital insurance for tens of millions of seniors through the Social Security Administration (SSA).
Part A was the first component of Medicare to be offered to eligible seniors in the United States, and today nearly all Americans aged 65 and over participate in the program in one form or another.
What Does Part A Cover?
Part A is usually just one component of enrollees’ total health insurance coverage. The services it helps to pay for are mostly those involving overnight stays in hospitals and other inpatient care facilities. These facilities can include skilled nursing homes, which are not to be confused with assisted living facilities.
Beneficiaries who enroll in Part A can sometimes get payment assistance in an assisted living community, though this is usually limited to hospice and comfort care. Part A benefits also pay for some home health services, as well as lab tests and surgery that requires admission to a hospital.
To find out exactly what might be covered by Medicare Part A, you can speak to a Medicare representative in your state.
What Is Not Covered by Part A?
Medicare Part A does not cover every service, and some beneficiaries can find themselves facing serious gaps in coverage if their needs go outside of what Part A can pay for. And some services are not covered by Part A because they are assigned to other parts of Medicare.
Prescription drugs, for example, are provided for under Medicare Part D, though some drugs used in an inpatient setting may be included in hospital charges that are covered by Part A. Anesthetics used during surgery, for instance, are almost always included in Part A coverage, though prescription painkillers picked up from a pharmacy fall under Part D.
Likewise, outpatient services, such as medical office visits and ambulance rides, are covered under Medicare Part B.
Other services may not be covered by Medicare at all. In this category are long-term custodial care, most routine dental services and eye exams for prescription glasses. Dentures are not paid for by Medicare, nor is elective or cosmetic surgery. Hearing aids and related care, such as fitting and testing services, are not included in most Medicare plans, nor are routine foot care issues or alternative therapies, such as acupuncture or homeopathic remedies.
Premiums for Part A Coverage
Most enrollees pay no monthly premium for Medicare Part A services.
Part A is offered for free to any citizen with 40 work credits earned over their working lifetime, which is equivalent to 10 years. The SSA issues one work credit for each $1,410 earned in a quarter, for a maximum of four work credits a year for people who earn more than $5,640 from working at a job or from self-employment.
Eligible seniors who reach age 65 with less than the 40 required credits may be asked to pay a monthly premium for Medicare Part A, which may be as high as $471 a month in 2021 for beneficiaries who have no work credits at all.
Signing Up for Part A
Medicare makes it relatively easy to sign up for Medicare Part A. In fact, most eligible seniors approaching their 65th birthday don’t have to do a thing to sign up, as Part A benefits are often automatically assigned to all qualified older adults who meet program participation requirements.
Seniors who have worked enough over their lives to earn the necessary 40 work credits, or the spouses of workers who have met the required minimum, pay no monthly premium for Medicare Part A. Part A benefits are also automatically extended for all hospice care participants in the United States, as well as for adults with end-stage renal disease (ESRD), also called kidney failure. For these enrollees, benefits are automatically issued and no action usually needs to be taken to ensure proper coverage.
Medicare-eligible seniors who do not meet the usual standards for no-cost Part A coverage can still buy into the program, though they may have to pay a monthly premium to do so. Seniors who get retirement benefits from the SSA are automatically enrolled in both Medicare Parts A and B, and non-participants can sign up during their initial enrollment period through any SSA office or online.
Medicare Advantage Plans Offer Part A and Part B Benefits
Not all Medicare beneficiaries get their inpatient coverage through Medicare Part A. Many seniors choose instead to opt into an alternative coverage called a Medicare Advantage plan, also called Medicare Part C.
Part C benefits are provided by private insurance companies that are authorized to bill Medicare for reimbursement of members’ benefits. By law, all Part C plans must provide the same coverage as Medicare Parts A and B as a starting point, and many Medicare Advantage plans also offer extra services, such as dental or vision care. Most Part C plans also include prescription drug coverage.
Seniors in most states may have several Medicare Advantage plans to choose from, and plans all vary in premium and coverage levels. Speak to a plan representative or a Medicare planner before signing up for a Part C plan that includes Medicare Part A benefits.