Older Americans rely on Medicare for much of their healthcare, but it can be hard to understand Medicare's rules. With participants having to juggle how Medicare Parts A, B, C, and D all fit together, you can easily get confused about how much each part of your Medicare coverage costs and what you're getting for your hard-earned money. To answer some of those questions, here are some of the key provisions of Medicare Part A and how you can use it to cover many expensive hospital and inpatient treatment costs.
How much do Medicare Part A premiums and deductibles cost?
For most people, Medicare Part A coverage comes without any monthly premium. As long as you paid Medicare payroll taxes during your career or you're married to someone who paid those taxes, then you'll likely qualify for Part A at no cost. Those rare few who didn't have the required 40 quarters of coverage credits to qualify for cost-free Part A coverage will pay $232 per month in 2018 if they had 30 to 39 quarters, or $422 per month if they have fewer than 30 quarters of qualifying work.
However, everyone has to pay deductibles and copayments when they use their Part A coverage. You'll pay the first $1,340 of your Part A expenses in 2018 as a deductible before Medicare starts making payments on your behalf. Exactly how much Medicare pays after that depends on the particular service you need.
What does Medicare Part A cover?
Medicare Part A covers two basic categories of expenses: hospital costs and expenses for a skilled nursing facility outside of a hospital. If you need to stay in a hospital, then Medicare will pay for a semi-private room, and you'll get coverage for meals, general nursing services, prescription drugs, and other treatment or related services that you get while you're there. Your doctor must state that you need at least two nights of care that requires a hospital stay in order for Medicare to cover those costs. Hospital-provided skilled nursing care and long-term care hospital stays are also included in Part A, with the restriction that your medical condition must be expected to improve.
For skilled nursing facilities, Part A requires that you have at least three days of inpatient hospital care that's connected to your stay at the facility, and your doctor must affirmatively state that you need the services that the skilled nursing facility provides. In particular, you generally can't get coverage for custodial care that's similar to what you'd find at nursing homes and long-term care facilities.
There are also some additional services available under Medicare Part A. If you need hospice care in connection with a medical condition that is expected to give you six months or less to live, then Medicare will cover expenses to allow you to stay in your home. Hospice benefits are available for two periods of 90 days, and doctors have to confirm that you have a terminal illness to extend coverage. Home healthcare is also available in a few other situations if you're under the care of a doctor whose care plan for you includes occasional skilled nursing care, physical therapy, speech-language pathology, or continued occupational therapy services. To qualify, your doctor must expect your condition to improve or state that you need services to maintain your current health status. These benefits typically involve a mix of Part A and Part B services.
How much are copayments under Part A?
Medicare doesn't charge copayments on all Part A expenses. For the first 60 days of a hospital stay, you won't owe a copayment. After that, Medicare charges $335 per day in 2018 for days 61 to 90 of the stay. Medicare provides a lifetime reserve of 60 days that you can use for stays of longer than 90 days, and you'll pay a daily copayment of $670 for days used in 2018.
Skilled nursing costs have different copayments. There's no amount due for the first 20 days of your visit, with a copayment for days 21 to 100 of $167.50 per day. After the 100th day, Medicare no longer provides any coverage.
Retirees need to be prepared for the costs of hospital and inpatient care. Medicare Part A covers much of the high cost of care, but even the copayments and premiums listed above can be financially challenging for retirees. Only by knowing up front what you'll be expected to contribute will you be truly prepared to meet your healthcare needs.