This article was updated on December 3, 2020.
Medicare Part A covers hospital and inpatient treatment. Most people won’t need to pay a premium for this coverage if they or their spouse has paid into Medicare through payroll taxes for at least 10 years. Here’s a breakdown of Medicare Part A premiums, and what to do if your coverage isn’t free.
Part A premiums
Premium-free Part A isn’t exactly free. You earn “free” Part A coverage by working and paying into the Medicare system through payroll taxes. In order to earn premium-free Part A, you should have a work history of about 10 years, or 40 quarters of work credit.
If not, the 2021 Part A premium costs are:
- $259 per month for 30-40 quarters, or
- $471 per month for 30 quarters or fewer.
Part A deductible
A deductible is the amount of money you pay out of pocket before your insurance plan will pay a claim. The deductible for Medicare Part A in 2021 is $1,484 per benefit period. After you’ve met this deductible, Medicare will pick up 80 percent of Medicare-approved services, while you will be responsible for the remaining 20 percent.
For example, if you have a hospital visit with a total cost of $3,500, here’s how the math would break down:
- Total cost of hospital visit: $3,500
- Medicare Part A deductible: $1,484
- Remaining balance: $2,016
- Medicare pays 80 percent of remaining balance: $1.612.80
- You pay 20 percent of remaining balance: $403.20
- Your total cost: $1,887.20
Qualifying for premium-free Part A
You can get premium-free Part A at 65 if:
- You already receive retirement benefits from Social Security or the Railroad Retirement Board,
- You are eligible for Social Security or Railroad Retirement Board benefits but do not collect them yet, or
- You or your spouse had Medicare-covered government employment.
If you’re under 65, you can get premium-free Part A if you:
- Received Social Security or Railroad Retirement Board disability benefits for 24 months,
- Have end-stage renal disease (ESRD), or
- Have ALS, or Lou Gehrig’s disease.
Qualifying through your spouse
If your spouse has at least 40 quarters of work credit, it may qualify you both for premium-free Part A.
However, your marital status determines your qualifications. If you are:
- Married, you need to have been married for a year
- Divorced, you need to have been married to your qualifying spouse for at least 10 years and currently single
- Widowed, you need to have been married to your qualifying spouse for at least nine months and currently single
Help to pay for Part A
Medigap. If you have trouble paying for your Part A premiums, you might consider a Medigap plan. This type of plan, also known as Medicare Supplement, “fills the gaps” in your Medicare coverage. For a low monthly premium, some plans will cover your Part A and Part B premiums, deductibles, and copays.
Medicaid. Medicare beneficiaries living with low or limited incomes may qualify for Medicaid in addition to their Medicare benefits.
- Medicare Part B is never premium-free and not dependent upon your work history of that of your spouse.
- If you don’t automatically qualify for premium-free Part A and you delay enrolling when you are first eligible, you could later be hit with a late enrollment penalty. This could raise your Part A premium as much as 10 percent for every year you go without Part A coverage. When you first become eligible, enroll right away and don’t delay.