Medicare Part A and Medicare Part B are two aspects of healthcare coverage the Centers for Medicare & Medicaid Services provide.
Part A is hospital coverage, while Part B is more for doctor’s visits and other aspects of outpatient medical care. These plans aren’t competitors, but instead are intended to complement each other to provide health coverage at a doctor’s office and hospital.
Medicare Part A covers several aspects of healthcare that may include the following:
- short-term care in a skilled nursing facility
- limited home healthcare
- hospice care
- inpatient care at a hospital
For this reason, people often call Medicare Part A hospital coverage.
For Medicare Part A eligibility, you must meet one of the following criteria:
- be age 65 or older
- have a disability as determined by a doctor and receive Social Security benefits for at least 24 months
- have end stage renal disease
- have amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease
Whether or not you receive Part A without a premium depends on your (or your spouse’s) work history.
Most people who qualify for Medicare do not pay for Part A. This is true if you or your spouse worked for at least 40 quarters (approximately 10 years) paying Medicare taxes. Even if you didn’t work for 40 quarters, you can still pay a monthly premium for Medicare Part A.
Medicare Part A premium in 2021
In addition to the premium costs (which are $0 for many people), there are other costs in terms of a deductible (what you must pay before Medicare pays) and coinsurance (you pay a portion and Medicare pays a portion). For 2021, these expenses include:
|Quarters worked and paid Medicare taxes||Premium|
|< 30 quarters||$471|
Medicare Part A hospitalization costs
Inpatient hospitalization days 91 and higher are considered lifetime reserve days. You receive 60 lifetime reserve days to use over the course of your life. If you go beyond these days, you are responsible for all costs after day 91.
A benefit period begins when you are an inpatient and ends when you have not received inpatient care for 60 days in a row.
Here is what you’ll pay in Part A hospitalization coinsurance costs in 2021:
|deductible for each benefit period||$1,484|
|inpatient days 1–60||$0|
|inpatient days 61–90||$371 per day|
|inpatient days 91+||$742 per day|
Other things to know
When you need help in the hospital, Medicare reimbursement often depends on whether the doctor declares you as an inpatient or “under observation.” If you are not officially admitted to the hospital, Medicare Part A will not cover the service (although Medicare Part B might).
There are also aspects of hospital care that Medicare Part A does not cover. These include the first 3 pints of blood, private nursing care, and a private room. Medicare Part A pays for a semi-private room, but if private rooms are all your hospital offers, Medicare will usually reimburse them.
For Medicare Part B eligibility, you must be age 65 or older and a U.S. citizen. Those who have legally and permanently resided in the United States for at least 5 years in a row can also qualify for Medicare Part B.
The cost for Part B depends on when you enrolled in Medicare and your income level. If you enrolled in Medicare during the open enrollment period and your income did not exceed $88,000 in 2019, you’ll pay $148.50 a month for your Medicare Part B premium in 2021.
However, if you make $500,000 or more as an individual or more than $750,000 as a couple filing jointly, you will pay $504.90 per month for your Part B premium in 2021.
If you receive benefits from Social Security, the Railroad Retirement Board, or the Office of Personnel Management, these organizations will deduct the Medicare deductible before sending you your benefits.
The annual deductible for 2021 is $203.
If you do not sign up for Medicare Part B in your enrollment period (usually right around when you turn age 65), you may have to pay a late enrollment penalty on a monthly basis.
Once you meet your deductible for Medicare Part B, you will usually pay 20 percent of a Medicare-approved service amount while Medicare will pay the remaining 80 percent.
Other things to know
It’s possible that you could be an inpatient in the hospital and have both Medicare Part A and Part B pay for aspects of your stay. For example, some of the doctors or specialists who see you in the hospital may be reimbursed through Medicare Part B. However, Medicare Part A will cover the cost of your stay and costs related to medically necessary surgery.
Below you’ll find a table that provides an overview of the main differences between Part A and Part B:
|Part A||Part B|
|Coverage||hospital and other inpatient services (surgeries, limited skilled nursing facility stays, hospice care, etc.)||outpatient medical services (preventative care, doctor’s appointments, therapy services, medical equipment, etc.)|
|Eligibility||age 65 or older, receive disability from Social Security for 24 months, or have diagnosis of ESRD or ALS||age 65 or older and U.S. citizen or legally qualifying U.S. residency|
|Costs in 2021||most pay no monthly premium, $1,484 deductible per benefit period, daily coinsurance for stays over 60 days||$148.50 monthly premium for most people, $203 annual deductible, 20% coinsurance on covered services and items|
If you or a loved one will be enrolling in Medicare soon (or switching plans), don’t miss these important deadlines:
- Initial enrollment period: the 3 months before your 65 birthday, the month of your birthday, and 3 months after your 65 birthday
- General enrollment: January 1 through March 31 for Medicare Part B if you did not sign up during your initial enrollment period
- Open enrollment: October 15 through December 7 for Medicare Advantage and Part D prescription drug plans enrollment or changes
Medicare Part A and Medicare Part B are two parts of original Medicare that together help cover most of your healthcare needs by helping pay for hospital and medical costs.
Enrolling in these plans in a timely fashion (3 months before to 3 months after your 65th birthday) is vital to making the plans as low-cost as possible.