Medicare Part A is considered hospital insurance. It’s meant to cover several major types of healthcare expenses, including:

  • Inpatient care in a hospital
  • Skilled nursing care in a facility
  • Nursing home care
  • Hospice care
  • Home health care

The cost of Medicare Part A could refer to the monthly premium, deductible or coinsurance. Let’s explore each cost.

Monthly Premium

The premium is a dollar amount to be paid monthly to stay enrolled in Medicare. The majority of people who enroll in Medicare will not have to pay a monthly premium for Medicare Part A. This is referred to as “premium-free”. Premium-free Medicare Part A is determined by the number of quarters you have paid Medicare taxes (prior to enrolling in Medicare). Medicare taxes is the money you paid with each paycheck to the Federal Insurance Contributions Act or FICA (which funds Medicare). The magic number of quarters you need to have paid FICA tax to get premium-free Medicare Part A is 40 quarters or 10 years.

This is why most people with Medicare Part A don’t have to pay the monthly premium as most people have paid FICA tax for 40 quarters or 10 years. Now, in the event that you do not meet this requirement, you will have to pay the monthly premium. You can pay up to $471 per month for your premium. This applies to people who have paid Medicare taxes for less than 30 quarters. If you paid these taxes for 30 to 39 quarters, your monthly premium will be $259 in 2021.

What’s a bit messy here is that if you enroll in Medicare Part A and pay the monthly premium, you must also enroll in Medicare Part B and pay Part B’s monthly premium. In 2021, the monthly premium for Part B coverage is around $148.50 per month. However, you may have to pay a higher amount if you have a higher income level.


The deductible is the amount you need to pay annually before Medicare Part A coverage kicks in. Each year, the Medicare Part A deductible changes. In 2021, the deductible is $1,484.


Your coinsurance costs will scale based on how long you’ve been receiving a specific type of treatment. You pay no coinsurance for the first 60 days. For treatment that takes place between 61 and 90 days after you started it, you pay $371 coinsurance per day of the benefit period. For days 91 and beyond, you pay $742.

Inpatient Hospital Care

Once deductible is met, then:

  • Days 1 – 60 = $0 daily coinsurance
  • Days 61–90 = $371 daily coinsurance
  • Days 91 and beyond = $742 daily coinsurance

But here’s the thing when you stay in the hospital longer than 90 days, you now have to use “lifetime reserve days”. You only get 60 lifetime reserve days for the rest of your life. They do not renew each year. You can only use these days once. Also, for each lifetime reserve day that you use, you’ll pay $742 for coinsurance in 2021. So, let’s say you were in the hospital but only stayed 50 days. This would mean you would not have to pay any coinsurance. Then you get discharged. You’d have to stay out of the hospital for at least 60 days before a new benefit period will begin.

Skilled Nursing

Your costs will vary based on your length of stay. The first 20 days are free. Days 21 to 100 carry a $185.50 daily coinsurance charge. Days beyond 101 have no coverage. So you would pay the entirety of your costs at this stage of your treatment process out-of-pocket.

Hospice Care

You won’t have to pay a dime in hospice care charges in 2021 under Medicare Part A. But you only qualify for this coverage if a doctor has certified that you have a life expectancy of 6 months or less.

Inpatient Mental Healthcare

Your costs for inpatient mental healthcare under Medicare Part A follow the same sliding scale that you’ll find under the coinsurance section of this document.

Should You Enroll in Medicare Part A If You’re Still Working

It’s your decision whether to sign up for Medicare Part A if you’re still working. Failing to sign up in time for Part B can carry hefty penalties. But Part A is free for most people, so don’t worry. If you want to keep using your employer’s health insurance for as long as possible, you’re free to do so.

Is There a Penalty for Not Signing Up for Medicare Part A at 65

Not for most people. You only pay a penalty for failing to sign up for Medicare Part A on time if you’re someone who would have to pay for the service with a monthly premium. As long as you’ve paid Medicare taxes for 30 quarters or more, then you don’t have to worry about a penalty.

What is the Difference Between Medicare Part A and Part B

Medicare Part A provides coverage for inpatient care and stays in the hospital. Medicare Part B provides coverage for outpatient care. The two plans fit together to cover the majority of healthcare situations that older adults face.

Do You Need Both Medicare Part A and Part B

It’s a good idea to sign up for both Medicare Part A and Part B. Doing so is important because you won’t be able to access the full benefits of Medicare health insurance without each of these services.

Can You Only Sign Up for Medicare Part A

Yes, although we don’t recommend signing up for only Medicare Part A, you can do it. In order to do so, you need to visit the Social Security Office’s webpage and fill out a form. Or, you can visit one of their offices in person to do this.

What is Not Covered Under Medicare Part A

Medicare Part A doesn’t cover any services that are provided by physicians directly. Any treatment that you receive from a doctor or surgeon will be covered by Medicare Part B instead of Part A. Additionally, any care that you receive while “under observation” and not as an officially admitted inpatient is also covered under Part B instead of Part A.

Other things that aren’t covered by Medicare Part A include:

  • Medication
  • Private rooms and care
  • Televisions or phones in your hospital rooms
  • The cost of staying in a skilled nursing facility
  • The costs of staying in a long-term assisted living facility