Medicare is a government-run health insurance program. It’s available to people age 65 and older, people with certain disabilities and people with End Stage Renal Disease (the last stage of chronic kidney disease). There are two parts that makeup Medicare: Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). As you head into retirement, it’s important to understand what each component of Medicare entails. Read on to discover what Medicare Part A coverage includes and how much it may cost. Consider working with a financial advisor as you plan how to cover your retirement medical expenses.
What Does Medicare Part A Cover?
Medicare Part A helps participants pay for hospital and facility costs. It’s offered to Americans who have contributed to Social Security or other qualified individuals at little to no cost. Here are some of the services Medicare Part A covers:
- Inpatient hospital care
- Skilled nursing facility care
- Inpatient care in a skilled nursing facility
- Hospice care
- Home healthcare
Keep in mind, even if Medicare covers services or required supplies, you may still have to pay a deductible, coinsurance and copayment. And, if you have a Medicare Advantage Plan or other Medicare plan, different rules may apply.
What Medicare Part A Does Not Cover
Medicare Part A doesn’t cover all your hospital coverage needs. As a beneficiary, you will receive coverage for your hospital expenses that are critical to your inpatient care. These expenses may include meals, semi-private rooms and nursing services. However, unless absolutely necessary, private rooms, private care nurses or other care items (like shampoo or razors) are not covered.
Also of note, if you need blood, Medicare Part A will not cover the cost. Blood transfusions are only covered if the hospital receives the blood from a blood bank. Here are some of the other services Medicare Part A doesn’t cover:
- Long-term care
- Most dental care
- Eye exams
- Cosmetic surgery
- Hearing aids and exams
- Routine foot care
Also, Medicare Part A does not cover the cost of medically necessary or preventative services. To get this coverage you’ll need to sign up for Medicare Part B. This plan will have a separate premium. In 2023, the standard monthly premium price for this plan is $164.90, down from 2022’s premium of $170.10. The annual deductible for the plan is $226 in 2023, down from 2022’s premium of $233.
Who Is Eligible for Coverage?
Many people are eligible for Medicare Part A. If you or your spouse worked for at least 10 years and paid Medicare taxes, your plan premium is free. Medicare Part A is also free if you’re over the age of 65 and you are receiving, or are eligible to receive, Social Security or Railroad Retirement Board benefits. You may also qualify for Medicare Part A if you or your spouse had Medicare-covered employment, or you’re a kidney dialysis or kidney transplant patient.
If you’re not eligible, but you’re a citizen or permanent resident of the U.S. and are 65 or older, you can buy Medicare Part A.
What Does Medicare Part A Cost?
Even if you don’t have to pay a premium for Medicare Part A, you’ll still have to pay a deductible for services rendered or any supplies you need. The Medicare Part A inpatient hospital deductible that beneficiaries will pay in 2023 is $1,600, up from $1,556 in 2022, according to the Centers for Medicare and Medicaid Services. Coinsurance is $400 per day for the 61st through 90th day of a hospitalization, up from 2022’s $389 in a benefit period.
The premium for someone who has had at least 30 quarters of coverage or was married to someone with at least 30 quarters of coverage will pay a Part A premium of $278. Someone with fewer than 30 quarters or have a disability and have exhausted other entitlements, will pay a Part A premium of $506.
It’s important to speak with your doctor or healthcare professional about why you need certain services or supplies. If you don’t, you may incur additional expenses. You should always verify that Medicare will cover the costs of your healthcare services. In the circumstance that a service is not covered, you must sign a notice stating that you understand you’ll have to pay for the item or service.
How to Apply for Medicare Part A Coverage
Seniors are automatically enrolled in Medicare Part A if they received benefits from Social Security or the Railroad Retirement Board for at least four months before turning 65. You’ll need to apply if you’re not automatically enrolled. Even if you’re not ready to retire you can apply for Medicare Part A and Medicare Part B. You can choose to enroll online, call Social Security at 1-800-772-1213 or visit your local Social Security office.
Once you’re eligible for Medicare Part A and Medicare Part B, you have a seven-month initial enrollment window. This period begins three months before your 65th birthday and extends to three months after your birthday month. Your coverage start date depends on when you actually sign-up. If you have to buy Medicare Part A or Part B, you can only sign-up during a valid enrollment period.
If you wait until the last minute to enroll, you may face a delay in receiving your Part B coverage. By chance you miss your initial enrollment window you can sign-up for Medicare Part A and Part B every year between January 1st and March 31st, with coverage starting July 1st that same year. It’s important to note that if you miss the enrollment period, you could end up paying a higher premium for Medicare Part A and Medicare Part B.
The Bottom Line
Medicare Part A coverage is government-run health insurance that covers hospital care for people age 65 and older. It covers most costs, but it does not cover the cost of preventative care, medically necessary procedures or prescription drugs. In many cases, it’s free of charge. Those who don’t sign-up as soon as they are eligible may end up paying a higher premium. Understanding Medicare Part A now, plus its coverage and how to enroll may help you save money and reduce stress in the future.
Healthcare Savings Tips
- If you want help with figuring out Medicare and other retirement topics, consider working with a financial advisor. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- A health savings account (HSA) may be a good option for younger people who want to prepare for future healthcare costs. HSAs can assist in reducing monthly premiums. Explore HSAs to better understand if one is the right fit for your financial situation.
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