How Much Are Medicare Part A Premiums and Deductibles?

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How Much Are Medicare Part A Premiums and Deductibles?

Medicare Part A, sometimes called “hospital insurance,” helps cover the costs of inpatient hospital stays for eligible individuals. It also covers home health care, hospice care, and durable medical equipment.

This year, Part A may cost you the following:

  • A monthly premium of up to $413. This is the fee you pay each month to receive Medicare Part A coverage. Most people will not have to pay a premium for Medicare Part A, but if you do, it can be up to almost $5,000 for the entire year of 2017.
  • A yearly inpatient deductible of $1,316. A deductible is the amount you’re responsible for each year before your insurance starts to pay its portion of costs.
  • Copayments of $0 for the first 60 days of inpatient care and up to $658 per day after 60 days of inpatient care. Copayments and coinsurance are the amounts you are responsible for after your insurance pays its portion of costs. Coinsurance typically refers to a percentage (for example, 20% of the cost) while a copayment is usually a flat amount (such as $20). For hospital stays, the amount you’ll pay with Medicare Part A varies with the number of days you require inpatient care.

How much are Medicare Part A premiums?

Most people will not have to pay a premium for Medicare Part A. This is known as “premium-free Part A.” However, you will still be expected to pay your deductible and various copayments or coinsurance. If you don’t qualify for premium-free Part A, your monthly premium can be up to $413, which can come to almost $5,000 for 2017 as a whole. 

How do I qualify for premium-free Part A?

Whether you are eligible for premium-free Part A is determined by a number of factors. If you meet any of the following criteria and are 65 years old, you may qualify:

  • You are eligible for, but have not yet received, benefits from Social Security or the Railroad Retirement Board.
  • You currently collect benefits from Social Security or the Railroad Retirement Board.
  • You or your spouse paid Medicare taxes while working for the government.

If you have paid Medicare taxes, you will need to earn a certain number of “quarters” to qualify for premium-free Part A. The term quarters refers to the number of Medicare and Social Security credits you earned while working, up to a maximum of four per year (that’s why they’re called quarters). You earn a quarter when you earn over a certain amount in the year. In 2017, the threshold to earn a quarter is $1300.

If you have paid Medicare taxes for at least 40 quarters in your lifetime—the equivalent of ten years of work—you qualify for premium-free Part A. You will be automatically enrolled when you turn 65. You can also be eligible for premium-free coverage if your spouse earned enough credits during their lifetime.

For those younger than 65, you can get premium-free Part A for either of these reasons:

  • You have End-Stage Renal Disease (ESRD).
  • You have collected disability benefits from Social Security or the Railroad Retirement Board for at least 24 months.

What if I don’t qualify for premium-free Part A?

If you don’t meet the requirements for premium-free coverage, you can still get Part A, but you’ll have to manually enroll and pay a premium. The amount of the premium is based on the number of quarters you paid Medicare taxes. If less than 30, the standard premium in 2017 is $413 per month. If you earned 30 to 39 quarters, your premium will be reduced to $227 per month.

In addition, if you enroll manually in Medicare Part A coverage, you may be required to also carry Medicare Part B coverage. Medicare Part B has its own monthly premium, which starts at $134 in 2017. This amount increases based on income level. You can learn more about Medicare Part B on our website.

Is there a late enrollment penalty for Medicare Part A?

Yes. If you are not eligible for premium-free Part A and choose not to enroll when you are first eligible (during the Initial Enrollment Period), your premium will increase 10%. This higher premium will remain in effect for twice the number of years you were eligible for Part A but did not have coverage.

So, for example, if you have been eligible for Part A for three years, but have not signed up yet, you will pay 10% more for coverage for six years. After those six years, your premium will return to normal. To put this in perspective, if you were eligible in 2016 but didn’t sign up until 2017, you could be paying almost $500 more this year.

What if I get Part A through a Medicare Advantage Plan?

If you receive your Part A hospital coverage through a Medicare Advantage Plan, your premium will be determined by the insurance provider offering the plan. These premiums vary based on the level of coverage and location. You can use our plan finder tool to find plans near you that offer the coverage you need at a cost that fits your budget.

What is the deductible for Medicare Part A?

The deductible for Part A is $1,316 in 2017. You’ll have to pay this amount out of pocket before coinsurance and copayment rates take effect.

If you have Part A coverage through a Medicare Advantage Plan, you may have a different deductible amount, which varies from plan to plan.

How much are Medicare Part A copays?

Coinsurance and copayment amounts for Medicare Part A are based on the length of time you are in the hospital:

  • Days 1–60: $0 per benefit period
  • Days 61–90: $329 per day per benefit period
  • Days 91 and up: $658 per day per benefit period (Days beyond 90 are considered “lifetime reserve days.” You only get 60 reserve days over your entire life.)
  • Day 91 and up after lifetime reserve: All costs come out of pocket

A benefit period starts when you enter the hospital and ends when you have not received inpatient hospital care for sixty days in a row.

What about non-hospital services?

In addition to hospital stays, Part A covers durable medical equipment (DME), hospice care, and home health care. These have different coinsurance and copayment rates than “standard” hospital stays:

  • Home health care: $0
  • DME: 20% of the Medicare-approved amount
  • Hospice care: $0 (However, if you require prescription drugs or respite care, there may be additional costs.)

We hope this information answers your questions about Medicare Part A costs. If you have additional questions about Medicare Part A or other Medicare coverage, visit our FAQs page or reach out to one of our licensed insurance agents at 855-802-1206. We can help you decide if making changes at this time is the right decision for you.

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