Millions of people over the age of 65 and folks with disabilities rely on Medicare Part A to help them cover their health care costs. If you’re preparing to join the ranks of Medicare beneficiaries and want to learn more about your options, you’re in the right place.
Medicare Part A is the oldest part of the Medicare program and, along with Part B, forms Original Medicare (sometimes called traditional Medicare). Together, Parts A and B cover many common health care costs. Part B helps pay for routine expenses like doctor visits and medical supplies, while Part A takes over when you become an inpatient, such as when a doctor admits you into the hospital.
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Medicare Part A covers you in situations where you’re an inpatient. That could be because you’ve been admitted into the hospital, a skilled nursing facility, or hospice care. Part A also covers some costs you might have if you receive home health care.
In short, Part A covers costs in the following situations:
- Hospital care
- Skilled nursing facility (SNF) care
- Home health care
- Hospice care
Part A coverage works a little differently in each of the above situations. In the event of a terminal diagnosis, for example, you might opt for hospice care. In this case, Part A covers nearly all your palliative care (care designed to bring you comfort) but won’t pay for services meant to cure you.
Learn more about what Part A covers.
Most people don’t pay premiums for Medicare Part A. Remember all those Medicare taxes that came out of your paycheck every payday? The federal government uses those to cover Part A premiums and other costs.
To earn premium-free Part A, you’ll need to have paid into Medicare taxes for a total of ten years or more. If you’ve paid Medicare taxes for only a portion of that time, you could receive discounted Part A premiums.
Some folks never pay into Medicare taxes. But don’t worry. If that’s you, you may be able to qualify for premium-free or discounted Part A through your spouse. If not, you can still have Part A if you pay the full monthly premium ($458 in 2020).1
Part A also has other costs, such as deductibles and coinsurance, that vary depending on the type of care you receive.
Learn more about Part A premiums and deductibles.
To be eligible for Medicare Part A, you must meet one of two requirements:
- You’re age 65 or older.
- You’ve received disability benefits for 25 or more months.
Exceptions include people who have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). These folks gain eligibility nearly immediately after being diagnosed.
In addition to meeting eligibility rules, you’ll also need to meet citizenship and residency requirements. Learn about the full eligibility requirements for Medicare Part A.
Once you’re eligible for Medicare, you’ll need to enroll in Part A (more on that in a moment). Then, the government will mail you your Medicare card. You’ll show this card to doctors and other providers just like you would any other insurance card to prove you have coverage.
While the Centers for Medicare and Medicaid Services (CMS) administers Medicare benefits, the Social Security Administration (SSA) carries the responsibility of confirming your eligibility. That means you’ll apply for Medicare Part A through the SSA in one of three ways:
- Online via SSA.gov
- By phone at 1-800-772-1213 from 7 a.m. to 7 p.m. in your time zone
- In person at your local SSA office
Most people enroll in Medicare Part A as soon as they’re eligible, especially if they’ve earned enough credits for premium-free Part A. People figure they’ve already paid for coverage via Medicare taxes, so they might as well have it in case they need it.
Enrolling in Part A right away makes sense for a lot of folks, even if they’re still working when they gain eligibility for Medicare. Unfortunately, if you have a Health Savings Account (HSA), you may need to delay enrolling in Medicare.
Warning: If you have an employer-sponsored HSA, read this:
It’s illegal to add tax-deferred funds to a Health Savings Account (HSA) while receiving Medicare benefits because the government sees it as double dipping (benefitting simultaneously from two federal health care aid programs). You can continue to use the existing funds in your HSA account, but you can’t add to them or remain enrolled in the HSA plan.
If you already have Social Security retirement or Railroad Retirement Board (RRB) benefits when you become eligible for Medicare, the government may enroll you in Part A automatically, but don’t wait for Uncle Sam. Take charge and get the healthcare you deserve during your Initial Enrollment Period (IEP).
Your IEP begins three months before you’re eligible for Medicare (that’s the month you turn 65 years old or your 25th month on disability). Once your IEP begins, you’ll have seven months to enroll in both Part A and Part B. If you become eligible for Medicare in June, for example, your IEP would begin in March and end after September.
If you don’t enroll in Medicare Part A during your Initial Enrollment Period, you risk paying a Late Enrollment Penalty (LEP) if you later decide to join Part A. If you’re entitled to premium-free Part A, however, you won’t have to pay any LEPs no matter when you enroll.
Learn more about Medicare enrollment periods.
Do I need to enroll in other parts of Medicare?
Because Part A makes up just half of Original Medicare, most folks also enroll in Part B at the same time through the Social Security Administration.
Plenty of people add additional Medicare coverage in the form of a Medicare Part D prescription drug plan or a Medicare Supplement (Medigap) plan. Part D helps cover the cost of medications, while Medicare Supplement helps cover Original Medicare costs such as deductibles and coinsurance.
While you don’t have to sign up for Medicare Part A, those Late Enrollment Penalties can really add up. Luckily, you can delay or decline Part A coverage.
Delaying Medicare Part A enrollment
While most folks gain eligibility for Medicare for the first time at age 65, plenty of people don’t retire until years later. If you continue to work past 65 and you still have health insurance from your employer, you may prefer to delay applying for Medicare Parts A and B until you stop working.
Caution: your health plan may require you to enroll in Medicare
Some employer-sponsored health plans require beneficiaries to sign up for Medicare when they become eligible. These plans lean on Medicare to cover most of your health care costs first and pay out only if bills remain after Medicare pays its share. Ask your HR department if this is the case for your health plan.
If you must pay for Part A, you may want to delay enrollment. Just make sure your current health plan counts as “creditable” coverage—that is, coverage as good or better than Medicare. Ask your HR department to confirm this for you in writing. Otherwise, you may incur Late Enrollment Penalties if you don’t enroll in Part A at your first opportunity.
Declining Medicare Part A
Unless the government automatically enrolls you, you can decline or delay Medicare Part A by simply not applying for coverage. If the government does enroll you, you could find that opting out of Part A is a bit tricky. That’s because you must join Part A if you’re already receiving retirement, disability, or spousal benefits from the Social Security Association.
If you opt out of Medicare Part A after receiving SSA benefits, you’ll have to repay any funds you’ve already received from these benefits. Since that can be a real pain in the you-know-what, most people don’t decline Part A.
Final thoughts: The alternative to Part A
Medicare Part A and Part B might form Original Medicare, but they’re not your only option. Lots of folks sign up for Medicare and have a Wizard of Oz moment: they realize they’re not in Kansas anymore, and Medicare is nothing like the employer-sponsored coverage they’ve had in the past.
If you’re looking for health care that acts a lot more like the insurance you’re used to, you may prefer Medicare Advantage (Medicare Part C) over Original Medicare. These plans are regulated by the government but administered by private companies.
In a nutshell, all Medicare Advantage plans must offer, at minimum, everything Original Medicare offers. Some offer benefits that you may find superior to Original Medicare. For example, some Medicare Advantage plans offer lower Part A deductibles or coinsurance.
If that sounds good to you, check out our Medicare Advantage guide. Doing so could help you decide whether to stick with Medicare Parts A and B or enroll in a Medicare Advantage plan to receive coverage in a way that may seem more familiar to you. Each route offers its advantages, so it’s worth learning about your options.
1. Medicare, “Medicare Costs at a Glance”
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