Learn About Medicare Part A and Part B Options

Understanding the Basics of Medicare Part A and Part B

Medicare is a federal health insurance program designed primarily for people age 65 and older. It also covers some younger people with disabilities and those with end-stage renal disease. The program consists of different parts, each covering different types of medical care. Part A and Part B form the foundation of Original Medicare, which is one way to receive your Medicare benefits.

Part A covers hospital insurance, while Part B covers medical insurance for doctor visits and outpatient services. Together, they help pay for many health care costs, though they do not cover everything. Understanding how these two parts work separately and together is important for anyone approaching age 65 or already enrolled in Medicare.

As of 2024, approximately 48 million people were enrolled in Medicare. About 37 million of those were age 65 and older, while the remainder were younger people with disabilities or specific medical conditions. Most people with Medicare have both Part A and Part B coverage, though enrollment in Part B is optional while Part A is automatic for most people.

The Medicare program operates under specific rules about when you can enroll, how much you pay, and what services are covered. These rules change periodically, and benefits vary based on your individual circumstances. This guide provides information about how Part A and Part B work, what they cover, and what costs you might encounter.

Practical Takeaway: Original Medicare through Part A and Part B is different from Medicare Advantage (Part C) and prescription drug coverage (Part D). Learning the differences helps you make informed decisions about your coverage options.

What Medicare Part A Covers

Medicare Part A is hospital insurance. It primarily covers inpatient hospital stays, skilled nursing facility care, hospice care, and home health services under certain circumstances. Part A helps pay for the costs associated with staying in a hospital or other facility for treatment, but it does not cover outpatient doctor visits or most other services delivered outside of a hospital setting.

When you are admitted to a hospital as an inpatient under Part A, Medicare helps pay for a semiprivate room, meals, nursing care, medications given while you are hospitalized, and medical supplies and equipment used during your stay. The program also covers lab tests, X-rays, and other diagnostic procedures performed during your hospital stay. However, Part A does not cover private rooms, television or telephone charges, or personal care items unless medically necessary.

Skilled nursing facility care is covered by Part A when you need round-the-clock skilled nursing or rehabilitation services after a hospital stay of at least three consecutive days. This might include physical therapy, occupational therapy, or other specialized care. In 2024, Medicare would cover up to 100 days in a skilled nursing facility per benefit period, though you would pay coinsurance after the first 20 days.

Home health services covered by Part A include part-time nursing care, physical therapy, occupational therapy, and speech pathology services when ordered by your doctor and provided by a Medicare-certified home health agency. These services must be medically necessary, and you must be confined to your home or have a medical contraindication to leaving home.

Hospice care is covered by Part A when a doctor certifies that you have a terminal illness with a life expectancy of six months or less. Medicare covers pain medication, symptom management, counseling, and other services to help you remain comfortable.

Practical Takeaway: Part A is primarily about inpatient hospital and facility care. If you have surgery or need hospitalization, Part A helps cover those costs. Understanding what qualifies as inpatient care versus outpatient care is important because Part A and Part B cover different types of services.

What Medicare Part B Covers

Medicare Part B is medical insurance that covers many of the doctor visits and outpatient services not covered by Part A. This includes visits to your primary care doctor, specialist consultations, diagnostic tests like blood work and imaging, outpatient surgery, and preventive services. Part B also covers durable medical equipment like wheelchairs, walkers, and oxygen equipment when prescribed by your doctor.

Preventive services covered by Part B include annual wellness visits, screening tests, and vaccinations at no cost to you beyond your Part B premium. These preventive services are designed to help catch health problems early. Examples include colonoscopies for colorectal cancer screening, mammograms for breast cancer screening, and annual flu vaccinations. According to Medicare data, preventive services covered under Part B have helped increase early detection of serious health conditions.

Mental health services are covered by Part B when provided by a psychiatrist, psychologist, social worker, or nurse specialist. This includes office visits for mental health conditions and behavioral health treatment. Part B also covers substance use disorder treatment services including counseling and medication-assisted treatment when medically necessary.

Rehabilitation services such as physical therapy and occupational therapy are covered by Part B when medically necessary and ordered by your doctor. These services help restore function after injury, illness, or surgery. Part B also covers speech-language pathology services for conditions affecting your ability to speak or swallow.

Laboratory services, X-rays, and other diagnostic imaging are covered by Part B when performed in an outpatient setting or ordered by your doctor. Emergency room visits are also covered by Part B when the emergency care is not part of an inpatient hospital admission.

Important to note: Part B does not cover routine dental care, vision exams for glasses or contacts, hearing aids, or long-term custodial care. Some services require prior authorization from Medicare before you receive them, and some services have limits on how many times per year you can receive them.

Practical Takeaway: Part B is your outpatient coverage. When you visit your doctor's office, get routine tests, or receive preventive care, Part B is what helps pay for those services. Most people with Medicare have Part B coverage because it covers the everyday medical care most people need.

Costs Associated with Medicare Part A and Part B

Medicare Part A and Part B have different cost structures. Part A is premium-free for most people because they or their spouse paid Medicare payroll taxes while working. However, Part A has deductibles and coinsurance amounts you pay when you use hospital or skilled nursing facility services.

In 2024, the Part A deductible for inpatient hospital care was $1,632 per benefit period. A benefit period begins when you enter the hospital and ends 60 days after you leave without readmission. If you are readmitted within 60 days, you are still in the same benefit period and do not pay another deductible. After you pay the deductible, Medicare covers all covered services for days 1 through 60 of your hospital stay. For days 61 through 90, you pay coinsurance of $408 per day. If you need hospital care beyond 90 days, you have 60 additional "lifetime reserve days" you can use, paying coinsurance of $816 per day.

Part B requires a monthly premium. Most people with higher incomes pay a higher premium than those with lower incomes. For 2024, the standard Part B premium was $164.90 per month for most beneficiaries, though some pay up to $560.50 per month depending on their income. Part B also has an annual deductible, which was $240 in 2024. After you meet your deductible, Medicare typically pays 80 percent of covered services, and you pay 20 percent coinsurance.

Both Part A and Part B have out-of-pocket costs. The amount you pay depends on the type of service, whether you go to a participating provider, and your specific situation. Some services have copayments, which are fixed amounts you pay for each visit. Other services use coinsurance, which means you pay a percentage of the cost.

There is no annual out-of-pocket maximum under Original Medicare Part A and Part B. This means that in theory, you could pay unlimited amounts in coinsurance and deductibles. Some people choose to purchase supplemental insurance (Medigap) or choose Medicare Advantage (Part C) to help limit their out-of-pocket costs.

Practical Takeaway: Medicare Part A and Part B are not free even though Part A has no premium. You will have deductibles, coinsurance, and copayments depending on what services you use. Understanding these costs helps you plan your health care budget and decide whether supplemental coverage might help you.