We last talked about how Medicare Part A is generally known as inpatient or hospitalization part of Medicare. We discussed services covered in the hospital, skilled nursing facility, as well as home health and hospice. Medicare does not come without some costs however. Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost-sharing (deductibles, coinsurances, copayments) for Medicare-covered services. Medicare Part A has a deductible of $1,340 per benefit period. If you are admitted into the hospital and had Original Medicare only, you would owe the first $1,340 of your stay. The deductible covers hospital services, including semi-private rooms, meals, general nursing, medications as part of your inpatient treatment, and other hospital services and supplies.
As mentioned, Medicare has a deductible “per benefit period.” “Benefit period” tells you the deductible is not an annual deductible, but could hit you more than once in a calendar year. A "benefit period" begins when you are discharged from a hospital or skilled nursing facility and ends when you haven't received any inpatient care for 60 consecutive days. If you are admitted as an inpatient after the 60 days of no inpatient care a new benefit period begins, meaning another $1,340 deductible. Also, if you are confined to the hospital for 60 consecutive days your deductible will cover you, but on the 61st day you will begin paying a coinsurance. For days 61-90, you will pay $335 a day of each benefit period, $670 a day for days 91 and beyond per each lifetime reserve day of each benefit period (you get up to 60 lifetime reserve days), and after all lifetime reserve days are used up you pay all costs.
The good news is for most Medicare beneficiaries Part A is free. You do not pay a premium for it. The reason for this is while you are working you pay 1.45% of your pay check into Medicare. Generally if you did that for 10 years or 40 quarters then you are entitled to Part A for free. If you haven’t worked long enough, but your spouse has, you may be able to qualify for premium-free Part A based on your spouse’s work history. Most people are automatically eligible for Medicare Part A at age 65 if they're already collecting retirement benefits from the Social Security Administration or the Railroad Retirement Board. You may qualify for Medicare Part A before 65 if you have a disability, end-stage renal disease (ESRD), or amyotrophic lateral sclerosis (ALS). You must be either a United States citizen or a legal permanent resident of at least five continuous years.
Some people are automatically enrolled in Medicare Part A, while you may need to manually sign up for it in other cases. If you are currently receiving retirement benefits from Social Security or the Railroad Retirement Board (RRB), you’re automatically enrolled in both Medicare Part A and Part B starting the first day of the month you turn age 65. If your birthday happens to fall on the first day of the month, then you’ll be automatically enrolled in Medicare on the first day of the month before your birthday. You should get your Medicare card in the mail three months before your 65th birthday. For more information on eligibility and how to enroll, contact Medicare by going to Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). Medicare representatives are available 24 hours a day, seven days a week.
You may also need to manually enroll in Part A if you haven’t worked long enough to get this coverage without a premium. If you are not eligible for premium-free Medicare Part A, you may voluntarily enroll in Part A if you are 65 or older and meet the citizenship or residency requirements, if you are under age 65, disabled, and your premium-free Medicare Part A coverage ended because you returned to work, or if you have not paid Medicare taxes through your employment or have not worked the required time to qualify for premium-free Part A. If you or your spouse worked and paid Medicare taxes for less than 10 years, the length of time that you worked will be taken into consideration when Social Security determines the amount you owe for your Medicare Part A premium. Your premium amount may be reduced the longer you or your spouse worked and paid taxes.
You may be subject to a late-enrollment penalty if you do not enroll in Medicare Part A when you are first eligible to do so. If you do not automatically qualify for Medicare Part A, you can do so during your Initial Enrollment Period, which starts three months before you turn 65, includes the month you turn 65, and lasts for three additional months after you turn 65. If you don’t sign up during your Initial Enrollment Period, you may be able to sign up during the General Enrollment Period that takes place every year from January 1 to March 31; your coverage would start on July 1. Keep in mind that if you wait to enroll in Part A after you’re first eligible, you may owe a late-enrollment penalty in the form of a higher premium. Your Part A premium could go up 10%, and you’ll have to pay this higher premium for twice the number of years that you could have enrolled in Part A but went without it.