Medicare Part A is known as hospital insurance. That term may be misleading, however, because services provided in the hospital by doctors, anesthetists, and surgeons are covered by Medicare Part B. Part A covers nursing care, such as care provided by professional nurses, a semi-private room, meals, lab tests, prescription drugs, medical appliances and supplies, rehabilitation therapy. Services provided for home health care, when you qualify, or hospice care are also covered under Part A.
Generally, the Part A premiums are paid for by the Medicare taxes withheld from your paycheck if you or your spouse has worked enough to qualify for 40 or more work credits. If you have not worked long enough to earn the 40 credits, you may pay up to $407/month based on the number of credits earned during your employment.
You can qualify for Medicare Part A if you are age 65 or if you are disabled and qualified for Social Security Disability Insurance for 24 months.
Most people assume that Medicare will cover the cost of all health care once you reach 65. That is not truly accurate. Although the premiums for Part A may be “free” because you or your spouse paid through the payroll deductions from your paycheck while you were working, in most circumstances you will be required to pay a co-pay or co-insurance. In addition, you will be required to meet a deductible of $1,260 for each hospital benefit period in 2015. What is a hospital benefit period? That is the period from when you are admitted to a hospital and ends when you have been out of the hospital for 60 days in a row. After the deductible is met, Medicare will pay for the full cost of the hospital care for 60 days. If you go home from the hospital before the 60 days are up, but are readmitted during those 60 days, the costs of the stay will be covered. After 60 days and before day 90, you will pay $315 for each day of the benefit period. After 91 days, you will pay $630 per day. (These are the 2015 costs. The 2016 rates will most likely be higher.)
What about admission to a Skilled Nursing Facility (SNF)? Medicare will pay the full cost of Days 1 through 20 in a SNF. From Day 21 through 100, you must pay a daily co-pay of $157.00 (These are 2015 costs.) and from Days 101 on you must pay all of the costs. Before Medicare will pay for your stay in the SNF, however, you must be admitted to the hospital for a 3-day inpatient stay.
You can buy a Medigap policy to cover some of the Part A deductibles and co-pays. If you are admitted to a SNF, long-term care insurance may cover some of the costs of your care.
Open enrollment for Medicare plans is October 15 through December 7th. At that time, you can compare Medicare Advantage (Part C) plans to regular Medicare plans to determine which option is the best one for you.