Medicare Part A helps pay for inpatient stays in hospitals and skilled nursing facilities, some home health services and end-of-life hospice care. Even though most people don’t pay premiums for Medicare Part A, the coverage still has other out-of-pocket costs:
- A deductible, which you must pay for each benefit period you are hospitalized, not each year
- Coinsurance, a set fee you pay each day if you are hospitalized or in skilled nursing care for a long time
- A premium, the plan’s monthly bill if you don’t qualify for free Part A
- A late fee for Part A if you must pay for Part A but didn’t sign up at the proper time
What are the Medicare Part A premiums?
Most people get Part A for free in retirement because they or their spouse had Medicare taxes deducted from their paychecks for at least 40 quarters of work. That’s the equivalent of 10 years or more.
Someone who has worked an entire year is credited with four quarters. But the 40 quarters total don’t need to be consecutive.
If you or your spouse has paid Medicare taxes for fewer than 40 quarters, you will have to pay premiums to receive Medicare Part A coverage. In 2022, if you or your spouse paid Medicare taxes for 30 to 39 quarters, you’ll pay $274 a month for Part A. If you or your spouse paid Medicare taxes for fewer than 30 quarters, you’ll pay $499 a month for Part A.
How much is the late enrollment penalty for Part A?
People who qualify for premium-free Part A won’t have a Part A penalty, although they may have to pay a late-enrollment penalty for Medicare Part B. But if you must buy Part A, you may have a late-enrollment penalty of 10 percent of your current Part A premiums for twice the number of years you didn’t sign up.
If you were eligible for Part A for two years but didn’t sign up, you would have to pay a late enrollment penalty for four years. So if you worked fewer than 7½ years total, 30 quarters, you would have to pay almost $50 more a month, 10 percent of $499, as your premium penalty in 2022. Because Part A premiums usually rise each year, your penalty will generally rise each year, too.
What is the Medicare Part A deductible?
Whether you pay for Part A premiums or not, you still may have some out-of-pocket costs. You’ll have to pay a hospital deductible of $1,556 for each benefit period you’re hospitalized in 2022.
It’s not an annual deductible like you’ve probably encountered with private insurance. This benefit period begins when you are admitted to a hospital or a skilled nursing facility as an inpatient and ends when you’ve been out of the hospital or skilled nursing facility for 60 days in a row.
You pay a single deductible even if you have more than one hospital stay during a benefit period. But if you are out of the hospital for 60 days and then have to go back in, you could pay more than one deductible during a calendar year.
What is Medicare Part A coinsurance?
You may have to pay other costs for Part A coverage in addition to the deductibles. If you stay a long time in a hospital or skilled nursing facility, you may have to pay a portion of that cost, called coinsurance.
• Hospital costs. Medicare covers the first 60 days as an inpatient in the hospital. But you may have to pay coinsurance for days 61 to 90, $389 a day in 2022, and a $778 daily coinsurance in 2022 after day 90 for up to 60 lifetime reserve days.
Each lifetime reserve day may be used only once, but you may apply the days to different benefit periods. You then will have to pay all costs after using all your lifetime reserve days.
• Skilled nursing facilities. Medicare covers the first 20 days in a skilled nursing facility after a qualifying hospital stay. But you have to pay coinsurance for days 21 to 100, $194.50 a day in 2022, and all costs beyond day 100.
• Hospice care. If you’re receiving end-of-life care through a hospice program, you may need to pay up to $5 per prescription for pain and symptom management and 5 percent of the Medicare-approved amount for inpatient respite care.
Can I get help paying Medicare Part A’s costs?
You may qualify for help under one of the Medicare Savings Programs in your state, depending on your income and assets. The Qualified Medicare Beneficiary Program helps pay the premiums, deductibles, coinsurance and copayments for parts A and B.
In most states, you can qualify if your gross monthly income in 2022 doesn’t exceed $1,153 for individuals or $1,546 for couples. In most states, individuals can’t have more than $8,400 in assets and couples can’t have more than $12,600 in assets.
Other Medicare Savings Programs also can help with Part B premiums and some other expenses for people with slightly higher income levels. To find out if you qualify for a Medicare Savings Program, contact your state Medicaid office or State Health Insurance Assistance Program (SHIP) or call 800-MEDICARE.
Puerto Rico and the U.S. Virgin Islands don’t have Medicare Savings Programs. But Medicaid, which provides health insurance to people with low incomes, may be able to assist.
Can a Medigap policy help pay Part A costs?
Yes. Medigap, also called Medicare supplement insurance, is private insurance you can purchase to cover some of your out-of-pocket expenses in traditional Medicare. Even though private insurers sell the Medigap plans, federal rules standardize the coverage.
Insurers can offer up to 10 different plans, each labeled with a letter. Plans with the same letter provide the same benefits, even if different insurance companies offer them, but the premiums can vary widely.
All types of Medigap policies cover the Part A hospital coinsurance and up to an additional 365 days in the hospital after Medicare benefits are used up, and all or part of the hospice cost sharing for drugs and respite care. Most Medigap policies also cover the Part A deductible and skilled nursing facility care coinsurance.
Keep in mind
These deductibles and coinsurance are for people who have Part A through original Medicare. Another option is to enroll in a Medicare Advantage plan through a private insurer, which may have different out-of-pocket costs.
Private insurance companies offer Medicare Advantage plans that Medicare approves, and they bundle together Part A hospital coverage, Part B doctor and outpatient services, and usually Part D prescription drug coverage into one plan.
If you decide to get coverage through a Medicare Advantage plan, you’ll still have to enroll in Medicare parts A and B, and pay the Part B premiums and any Part A premiums that may be required. You may have an additional monthly premium for the Medicare Advantage plan, although more than half the plans charge no premium.
Medicare Advantage plans must provide at least as much coverage as original Medicare, but you may have different out-of-pocket costs. For example, an Advantage plan may have a daily copayment for the first few days in the hospital, such as $325 for each of the first five days as a hospital inpatient, rather than the Part A hospital deductible of $1,556 per benefit period in 2022.
These copayments can vary by plan and may add up to more than a Part A deductibles.