Key Takeaways

• Medicare Part A covers inpatient hospital care, but many people overlook how its benefit periods, cost-sharing rules, and eligibility affect out-of-pocket costs.

• Assuming Medicare Part A is entirely free or that it automatically covers all types of inpatient services can lead to unexpected expenses.

Understanding What Medicare Part A Really Covers

Medicare Part A, often called “hospital insurance,” is one of the core parts of Original Medicare. As of 2025, it provides coverage primarily for inpatient hospital stays, care in a skilled nursing facility (SNF), hospice care, and some home health services. While it may sound straightforward, several critical details can impact your coverage and what you end up paying.

What Medicare Part A Includes

Here’s what Part A typically covers:

• Inpatient hospital care: Room, meals, general nursing, and drugs as part of inpatient treatment

• Skilled nursing facility care: Only after a qualifying hospital stay of at least three days

• Hospice care: For individuals with a terminal illness and a prognosis of six months or less

• Home health care: Limited to medically necessary, intermittent skilled nursing care or physical therapy

However, Medicare Part A doesn’t cover everything. Long-term custodial care, private-duty nursing, and personal care assistance are not included.

The Misunderstood “Free” Part A

Many people assume Medicare Part A is free for everyone. In truth, it depends on your work history. If you or your spouse paid Medicare taxes for at least 40 quarters (10 years), you qualify for premium-free Part A. If not, you may need to pay a monthly premium, which in 2025 can be as high as $518.

Even if you qualify for premium-free Part A, it doesn’t mean you won’t face other costs. Deductibles, coinsurance, and copayments can still apply and become significant depending on your healthcare needs.

The Role of Benefit Periods

One of the most overlooked aspects of Medicare Part A is how benefit periods work. Unlike typical insurance policies that operate on a yearly deductible basis, Medicare Part A uses a benefit period system.

A benefit period starts the day you’re admitted to a hospital or skilled nursing facility and ends after you’ve been out for 60 consecutive days. This means you could have multiple benefit periods—and multiple deductibles—in a single year.

Why This Matters

• In 2025, the Part A deductible is $1,676 per benefit period.

• If you’re hospitalized again after a 60-day gap, a new benefit period begins, and you’ll owe the deductible again.

• Coinsurance also kicks in if your hospital stay exceeds 60 days, increasing your out-of-pocket expenses.

Understanding Hospital Stays and Observation Status

Another common misunderstanding is the difference between being admitted as an inpatient versus being under observation.

Observation status may involve an overnight stay, but it is considered outpatient care. If you’re under observation, Medicare Part A does not cover it—Part B does. This can lead to high out-of-pocket costs if you expected your hospital visit to fall under Part A.

Observation status also affects your eligibility for skilled nursing facility care. To qualify, you must be formally admitted for at least three consecutive days—not just kept for observation.

Skilled Nursing Facility Coverage Isn’t Automatic

Skilled nursing facility care is only covered if:

• You had a qualifying inpatient hospital stay of at least three days (not counting the discharge day)

• You enter the SNF within 30 days of leaving the hospital

• You need skilled care related to the hospital condition

If these conditions aren’t met, you could be responsible for the full cost of care.

Costs in 2025

• Days 1-20: Covered in full after the Part A deductible

• Days 21-100: Daily coinsurance of $209.50

• After day 100: You pay all costs

This coverage resets only with a new benefit period.

Hospice Coverage Has Specific Conditions

Medicare Part A covers hospice care for terminally ill patients, but it comes with specific requirements:

• A doctor must certify that you have a terminal illness with a life expectancy of six months or less

• You must choose hospice care over curative treatments

Hospice services may include pain relief, symptom management, medical equipment, and grief counseling for family members. However, you may still pay small copayments for medications and respite care.

Home Health Services Aren’t Open-Ended

Home health care under Part A is limited and must meet specific conditions:

• A doctor must certify that you’re homebound and need skilled nursing care or therapy

• The care must be intermittent and not full-time

• The services must be provided by a Medicare-certified agency

You won’t pay anything for covered services under Part A, but 20% coinsurance applies for durable medical equipment.

Out-of-Pocket Costs You Should Prepare For

Even with premium-free Part A, your total costs can add up quickly, especially if you have multiple hospital stays in a year or require extended SNF or hospice care.

Here’s what to watch for in 2025:

• Inpatient hospital deductible: $1,676 per benefit period

• Hospital coinsurance: $419 per day for days 61–90; $838 per day for lifetime reserve days

• SNF coinsurance: $209.50 per day after day 20 up to day 100

• Hospice copayments: Up to $5 per prescription; 5% of the cost for inpatient respite care

Understanding these numbers helps you plan more effectively.

Enrollment Isn’t Always Automatic

You might think Medicare enrollment is automatic, but that’s not always the case. If you’re already receiving Social Security or Railroad Retirement Board benefits before age 65, you’ll be automatically enrolled in both Parts A and B.

If not, you need to sign up during:

• Initial Enrollment Period (IEP): The 7-month window surrounding your 65th birthday

• General Enrollment Period (GEP): January 1 to March 31, if you missed your IEP

• Special Enrollment Period (SEP): Triggered by certain life events, like losing employer coverage

Late enrollment in Part A (if you’re not eligible for premium-free coverage) could mean paying a penalty of up to 10% of the premium for twice the number of years you delayed.

Coordination With Other Parts of Medicare

Medicare Part A doesn’t operate in isolation. It works together with Part B (medical insurance) and Part D (prescription drug coverage) to form a more complete healthcare plan. If you only enroll in Part A, your coverage will be limited to inpatient hospital services.

For example:

• Outpatient services like doctor visits, preventive screenings, and lab tests fall under Part B.

• Prescription drugs you take at home fall under Part D.

If you’re only covered by Part A, you may face gaps in coverage that lead to higher out-of-pocket costs.

Don’t Forget About Lifetime Reserve Days

Medicare Part A offers 60 lifetime reserve days for hospital stays that go beyond 90 days in a benefit period. These are non-renewable days you can use once in your lifetime.

Here’s how they work:

• You have 60 lifetime reserve days total

• You can use them at any point after day 90 in a hospital stay

• In 2025, you pay $838 per day for each reserve day used

Once they’re gone, you pay all costs beyond 90 days unless you have supplemental coverage.

Planning for the Full Picture of Coverage

To avoid surprises, it’s essential to understand not just what Medicare Part A covers, but also what it doesn’t. Many beneficiaries only realize the gaps in coverage when they’re facing a hospital bill.

You may want to consider:

• How many benefit periods you’re likely to have in a year

• Whether you need additional coverage for outpatient services or prescriptions

• Planning for coinsurance, deductibles, and potential penalties

Be Proactive About Your Medicare Decisions

Understanding Medicare Part A is not as simple as knowing it covers hospital care. Knowing the rules around benefit periods, SNF eligibility, coinsurance, and enrollment timelines can help you make better decisions.

If you want clarity on how your specific situation fits into Medicare, get in touch with a licensed agent listed on this website for professional advice.