Let's learn about part a
Part A is also know as Hospital Insurance.
What does part a pay for?
Medicare Part A is comprehensive hospital insurance. Beneficiaries receive coverage for expenses that are critical to your inpatient care.
Semi-private rooms, meals, nursing, drugs, and any other services & supplies are covered while you are an inpatient in a hospital.
Who is Eligible for Part A?
You may qualify if you are 65 or older and:
- You are a U.S. citizen or a permanent legal resident who has lived in the United States for at least five years.
- You or your spouse has worked long enough to be eligible.
- You or your spouse is a government employee or retiree who has not paid into Social Security but has paid Medicare payroll taxes while working.
Younger than 65?
You may qualify under 65 if:
- You have been entitled to Social Security disability benefits for at least 24 months.
- You receive a disability pension from the Railroad Retirement Board.
- You have Lou Gehrig’s disease, also known as amyotrophic lateral sclerosis.
- You have permanent kidney failure requiring regular dialysis or a kidney transplant.
Part A Premium?
If you have earned 40 work credits over your career you quality for $0 premium.
You earned 4 credits for every full year that you have worked and payed Medicare taxes. If you have worked for at least 10 full years you will have earned 40 credits which will qualify you for $0 premium. If you have 30 to 39 credits, you will have to pay a $252 monthly premium for Part A. If you have fewer than 30 work credits, you will have to pay a monthly premium of $471. If you continue working and you reach 40 credits, your premium will drop to $0.
Inpatient, Outpatient & Observation
When you go to the hospital it is very important to know the difference between Inpatient & Outpatient. Your hospital status whether the hospital considers you an “inpatient” or “outpatient” affects how much you pay.
You’re an inpatient starting when you’re formally admitted to a hospital with a doctor’s order. The day before you’re discharged is your last inpatient day. You’re an outpatient if you’re getting ER services, observation services, outpatient surgery, lab tests or X-rays and the doctor hasn’t written an order to admit you to a hospital as an inpatient.
The word “Observation” is used when you go to the ER and the doctor wants to keep you in the hospital for a day or two to make sure your OK. The reason why it’s important to know the difference is when you go to the ER you are actually not an In-Patient of the hospital. Some people can be in the hospital for several days and never be considered an In-Patient of the hospital so Part A will not be used to cover any costs. Anything relating to any ER visit is paid for by Medicare Part B.
Deductible & Coinsurance
When you go to the hospital and you are admitted as a In-Patient, you will have to pay a $1,484 deductible (2021). This is a one time deductible which covers your In-Patient costs for the next 60 days. If you go back for any reason to the hospital in the next 60 days you will not have to pay it again. You can paid this deductible up to 6 times per year because it renews every 60 days.
If you have to stay in the hospital for over 60 days, then you will have to start paying a daily coinsurance of $371 (2021). This coinsurance applies to days 61 to 90 that you are in the hospital.
If you are still in the hospital after 90 days, you will start using something called your “Lifetime Reserve Days”. You get 60 Lifetime reserve days to help you pay for your hospital stay. You have to pay a $742 daily coinsurance (2021) for each Lifetime Reserve Day. Once use them up they are gone and you will have to pay the 100% of the hospital bill.
How & When can you Enroll?
Your Medicare Initial Enrollment Period is probably the most important date for you to know as you’re approaching Medicare eligibility.
Your Initial Enrollment Period (or IEP) lasts for seven (7) months. It begins three months before the month of your 65th birthday. It includes the month of your birthday, and extends for three months after your birthday month.
You can also avoid late penalties for Part D by enrolling drug coverage during this same window. That drug coverage can be a standalone plan or part of a Medicare Advantage plan.
If you enroll in Original Medicare, you may want additional coverage offered by Medicare Supplement Plans (Medigap).
What happens if you miss your Initial Enrollment?
There are a number of unpleasant consequences you might face if you don’t sign up for coverage during your IEP. These apply only if you do not have other creditable coverage, like employer coverage.
Let’s break them down:
- If you don’t enroll in Part B during your IEP, you’ll probably have to pay a late enrollment penalty forever. The penalty is 10% for every 12-month period you should have had Part B, but didn’t.
- If you don’t sign up during your IEP, you’ll have to wait until the next General Enrollment Period (GEP) which is every year form Jan 1 to March 31. Your coverage won’t start until July 1 of that year.
- If you don’t have creditable Part D prescription drug coverage and you miss your IEP, you will have to pay a premium penalty for as long as you have the coverage. The penalty is 1% per consecutive month that you went without coverage.
- In the rare situation where you don’t qualify for premium-free Part A because you don’t have enough work credits, and you don’t buy it during your IEP, you’ll pay a 10% premium penalty for twice the number of years you could have bought the coverage but didn’t.
What is Credible Coverage?
In many cases, people are still working and have group coverage through an employer or union plan. This allows you to delay enrollment in Part A and/or B. When you retire or lose your credible coverage, you can sign up during a Special Enrollment Period (SEP).
If you qualify, you get a 63-day Special Enrollment period to sign up for Part A and/or B with no late penalties.
This Special Enrollment Period is an eight-month period that begins either the month you or your spouse quits working or the month your group coverage ends, whichever comes first.
What & When is the General Enrollment Period?
If you missed your IEP and you don’t qualify for a special enrollment period, you can sign up for Original Medicare during the General Enrollment Period (GEP). This runs from January 1 through March 31 each year.
Don’t be fooled into thinking the GEP is a safety net so you don’t have to worry about your IEP. Even though you can enroll in Original Medicare during this time, you are still subject to the late enrollment penalties.
Your coverage won’t begin until July 1, which means you may go without coverage for months.
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