The purpose of this site is to explain Medicare Part C, which is the private portion of the federal program for seniors (aged 65 and up) and those with disabilities under age 65. But you can’t sign up for Medicare Advantage unless you’ve already enrolled in original Medicare, which comprises Parts A and B. In fact, by law, Medicare Advantage must cover at least the same benefits as original Medicare. Most plans cover much more, with a host of added benefits that the original version doesn’t cover.
Because Advantage covers Part A services, we thought it would be beneficial to explain Medicare Part A. This is the portion of Medicare that usually doesn’t cost anything per month. That’s because most people pay into the Medicare system throughout their working years. If you earn 40 work credits (about 10 years’ worth of work) by the time you’re eligible for Medicare at 65, you won’t have to pay a premium for Part A.
Part A: Hospital Coverage
Part A covers your hospital services. This could include inpatient hospital stays, any services that you might get while at the hospital, nursing care and even meals during your stay. Skilled nursing facility care, non-custodial nursing home care, home health services and hospice are also covered, as are:
- Acute care hospitals
- Inpatient rehabilitation facilities
- Critical access hospitals
- Long-term care hospitals
- Inpatient care that falls under a qualifying clinical research study
Medicare Part A doesn’t cover private-duty nursing, a private room that isn’t medically necessary, long-term care (also called custodial care) or any extras for your hospital room, such as TVs that aren’t part of the room or personal care items.
You should also know that Medicare Part A will only cover medically necessary services. That might seem like a no-brainer, but many seniors have faced some issues when they realized too late that staying at a hospital doesn’t mean they’re being treated as inpatients. Providers can recommend “observation” instead, a practice in which patients stay overnight at a hospital – sometimes for several days – without being formally admitted to the facility. The purpose of this is to monitor patients before an official diagnosis or to learn more about a person’s symptoms.
In 2017, a new federal rule required hospitals to tell patients whether they’re being admitted officially or not. They have 24 to 36 hours to inform patients about their status. If you’re in a hospital, ask why you’re there and whether it’s considered an inpatient admission or an outpatient observation. Medicare Part A only covers admissions; Part B would cover some of the cost of your outpatient care. And while we’re on the subject of covered hospital stays, keep in mind that Medicare can deny coverage for claims just as any other health insurance plan can. In general, Medicare considers the following factors in approving claims:
- Necessity. Your provider must make an official order stating that your illness or injury requires inpatient medical care from a hospital (or other covered medical facility).
- Assignment. The hospital must accept Medicare assignment, meaning that it agrees to Medicare’s pricing structure.
- URC approval. The hospital’s utilization review committee (URC) has determined that you qualify for inpatient admission and that your medical condition requires hospitalization. URCs are structured to reduce unnecessary hospital admissions and control inpatient length of stays.
These aren’t the only factors that determine covered claims, but we point these out to give you an idea of what goes on behind the approval process. We also want to give you information so that you can ask questions about your benefits. Don’t be shy about asking your provider, Medicare itself (if you have original) or your insurer (if you have Part C) about the costs you can expect and whether a service or treatment is covered by your plan. You’ll save yourself a headache – and possibly some money – by doing your homework ahead of time.
Other Coverage under Part A
Part A often gets referred to as “hospital coverage,” probably because that’s the simplest way of thinking about it. But Medicare Part A also covers skilled nursing facilities, nursing home care, home health services and hospice. You may not need any of these benefits for a long time. As you age, though, you may find that you need more recuperation after a surgery or extra care once you leave the hospital. Services under Part A’s skilled nursing facility benefit may also include:
- Meals and semi-private rooms
- Physical and occupational therapy if they’re part of your treatment plan
- Speech-language pathology services if they’re part of your treatment plan
- Ambulance transportation if you can’t travel safely on your own and you need help that the skilled nursing facility can’t provide
- Medical social services and dietary counseling
- Medication, medical equipment and supplies that you use in the facility
There are limits to the coverage, of course. In particular, you’ll need to pay attention to whether you were formally admitted to the hospital before being transferred to the skilled nursing facility. Medicare Part A will only cover your skilled nursing facility stay if you spent three full days as a hospital inpatient first. You’ll also need to have days remaining in your coverage period for Medicare to pay its portion of your bill.
How Much Does Part A Cost?
There are costs associated with this coverage. Even if you don’t pay a premium, you’ll have to cover a portion of your hospital costs on your own. As we said earlier, most people get Medicare Part A for free. If you or your spouse has earned enough work credits, you won’t have to pay a monthly premium for hospital coverage under original Medicare. If you’re among the small percentage of Medicare enrollees who haven’t earned enough work credits to qualify for premium-free Part A, then you’ll pay a premium based on how many work credits you earned during your working years. This is set at the federal level. In 2018, it’s:
- $232 a month for those who’ve earned 30 to 39 work credits
- $422 a month for those who’ve earned less than 30 work credits
Beyond the monthly premium costs, you’ll also be responsible for cost sharing, which is the portion of your medical bill that you have to pay out of pocket. Original Medicare sets a list of rates and limitations for hospital and skilled nursing facility care. Hospital stays, for instance, require the following:
- Deductible per benefit period: $1,340
- Days 1 to 60: no out-of-pocket cost
- Days 61 to 90: $335 per day
- Days 91 and beyond: $670 per day
Starting on day 91, you’ll tap into your “lifetime reserve days,” of which you get 60. Once you use up those 60 lifetime reserve days, you’ll have to cover all of your hospital costs yourself. Skilled nursing care also has limitations and per-benefit coinsurance rates.
These and other cost-sharing amounts will differ if you have Medicare Advantage. Like other private health plans, Advantage plans set their own fee structures. Keep in mind that MA policies must offer at least the same benefits as you’d find under original Medicare. In some cases, though, you may find even more generous coverage or lower coinsurance amounts for your stays.
One example comes from United Healthcare. If you live in Hamilton County, Tennessee, you’ll find two MA plans (listed under AARP by United Healthcare). The AARP MedicareComplete Plus Plan 1 (HMO-POS) features no medical deductible and a daily copayment for hospital stays of $295 for the first six days. Starting on day seven, there’s no copayment required, and the plan covers an unlimited number of days for inpatient hospital stays. Here’s a side-by-side comparison for original Medicare and Medicare Advantage, using this plan from UHC/AARP as an example:
UHC/AARP Plan in Hamilton County, TN
Copayment (per day)
|$0 for days 1 to 60 $335 for days 61 to 90||$295 for days 1 to 6 $0 starting day 7|
|Lifetime reserve of 60 days starting on day 91||Unlimited inpatient stays|
For shorter hospital stays, original Medicare comes out ahead, but there are limits to Part A coverage under original that may not apply with an Advantage plan. Plus, Medicare Advantage includes an annual cap on out-of-pocket costs for enrollees. This UHC plan limits out-of-pocket spending to $4,500 for the year – and that includes non-hospital spending as well.
Not everyone needs extensive hospital coverage, but the odds go up that you’ll need more intensive care as you get older. Medicare Advantage covers everything that Medicare Part A covers, often with extra benefits and for no more money than you’d spend on Part A already. When you’re weighing the pros and cons of Medicare Advantage, consider your medical needs carefully.