Medicare Part A: Hospital Insurance

Medicare is a federally sponsored health insurance program for people aged 65 and over, those with certain disabilities, and individuals with permanent kidney failure.  In this article, we are going to focus on Medicare Part A:  hospital insurance.  We'll talk about the enrollment process; provide the most recent premium information, as well as deductibles and coinsurance payments.

Enrolling in Medicare Part A

We've already covered Medicare Eligibility rules in a previous article, but we never talked at length about Medicare enrollment.  Essentially, Medicare is broken down into three sections or parts.  Medicare Part A is for hospital insurance, but it also helps pay for skilled nursing facilities, hospice care, and home health care.

Medicare Part B is medical insurance, and that's discussed more thoroughly in a separate article.  In 2006, Medicare Part D, which is a prescription drug plan, was introduced into the system.

Medicare Eligibility

Taxpayers become eligible for Medicare starting on the first day of the month they turn 65.  For example, if Bertha was born on September 15, 1951, then she is eligible for Medicare benefits starting on September 1, 2016.  Citizens already receiving Social Security benefits will be automatically enrolled in Medicare Part A and Part B.

The enrollment period is a six-month timeline that starts three months prior to an individual's 65th birthday.  Therefore, going back to our example, if Bertha was born on September 15, 1951, then she will be mailed an enrollment package on June 1, 2016, three months prior to the month in which she turns 65.  Her enrollment period would conclude at the end of November 2016.

If someone is not receiving Social Security benefits, they should call the Social Security Administration at 1-800-772-1213 three months prior to their 65th birthday.  Individuals can also visit a local Social Security office for more personal assistance with an enrollment question.

Part A Coverage

Medicare Part A is hospital insurance.  If one person in the household paid into the Medicare system while working, then neither person in a household would have to pay premiums to receive this insurance coverage.  This means most people in the United States do not have to pay a monthly premium to enjoy the benefits of Medicare Part A.

This insurance provides coverage for the cost of inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care).  Part A also helps cover hospice care, and some other forms of home health care.

Part A Premiums

If an individual or their spouse worked for at least 40 quarters in Medicare covered employment, then it is very likely they will not have to pay any Medicare Part A premiums.  For those not meeting this requirement, the 2015 and 2016 premiums are listed below:

  • The Part A premium of $407 per month in 2015 increases to $411 in 2016.

Deductible and Coinsurance

Medicare Part A is hospital insurance that also pays for skilled nursing facilities and some forms of home health care.  Medicare breaks down their deductible or coinsurance payments based on a "benefits period."

Deductibles

The Medicare Part A deductible for each benefits period is $1,260 in 2015 and $1,288 in 2016.  This means that each time a hospital stay is required, a deductible of $1,288 will apply.  The deductible is the only out-of-pocket expense during the first 60 days of any benefits period.

Coinsurance Payments

If a benefits period lasts longer than 60 days, then a coinsurance payment is required.  For in-patient hospital stays, the coinsurance amounts in 2015 and 2016 are as follows:

  • For benefits periods lasting between 61 and 90 days, participants are responsible for coinsurance payments of $315 per day in 2015 and $322 per day in 2016.
  • For benefits periods lasting between 91 and 150 days, participants are responsible for coinsurance payments of $630 per day in 2015 and $644 per day in 2016.
  • Participants are responsible for all costs if the benefits period lasts longer than 150 days.

In 2015 and 2016, the Skilled Nursing Facility Coinsurance is as follows:

  • For benefits periods lasting between 21 and 100 days, participants are responsible for up to $157.50 in coinsurance payments per day.  In 2016, the coinsurance payment rises to $161.00 per day.

It's possible to purchase additional insurance beyond Medicare Part A and Part B.  For more information on those plans, see our article on Medicare Supplemental Insurance.  For more complete rules on Medicare Part A insurance, visit the Medicare website.


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