Chapter 1 – Medicare Part A Hospital Insurance
Understanding Medicare Part A
Medicare is made up of several different parts, but we will begin our discussion with Part A, which is the first half of what is often called “Original Medicare.” Medicare Part A covers inpatient hospital stays, skilled nursing care, home health care and hospice. There are some exceptions to what Medicare Part A will cover, so always do your research, as the program can change over time. The second half of “Original Medicare” will be covered in Chapter Two, “Medicare Part B – Medical Insurance.”
Before Age 65 – What to Do for Part A
As you approach age 65, you will need to begin planning your enrollment in Medicare. If you started receiving your Social Security benefit before the age of 65, then you will automatically be enrolled in Medicare at age 65. However, if your Social Security benefits have not begun and you are approaching age 65, you are not automatically enrolled in Medicare.
There is a window of time for enrollment called the “Initial Enrollment Period” or IEP. Your IEP includes the three months before you turn 65, your 65th birthday month, and the three months after you turn 65. During this time, you can apply for Medicare Part A. If you miss your IEP, there are still ways to apply. However, you could incur penalties if you wait too long. For more information on how to apply, visit the Social Security Administration website.
What if I’m Still Working?
If you are still working, you may choose to delay your enrollment in Medicare Part A, and continue using your employer’s health benefits. You will have the opportunity to enroll in Medicare Part A after you retire, and without penalty. However, some plans provided by your employer will require you to enroll in Medicare Part A. If you are still working, always research this option with your employer.
Eligibility and Premium for Medicare Part A
If you or your spouse have enough credits with the Social Security Administration, then you will not have a monthly premium for Medicare Part A. If neither of you have enough credits with the Social Security Administration, you may still sign up for Medicare Part A, but you will have to pay a monthly premium. If you are single and do not have enough credits with Social Security, you will also have a monthly premium. The premium will be addressed when you apply for Medicare Part A and the cost will vary depending on how many credits you have earned according to the Social Security Administration. You can visit the Medicare Website for current pricing. To learn how many credits you have earned or to download your Social Security statement, go to www.ssa.gov.
What Do Medicare Part A Services Cost?
Medicare has negotiated the cost of everything it will cover with companies providing services, and it will pay 80% of that negotiated cost. You will be responsible for the other 20%. There is no limit to the cost. This is one reason people purchase insurance in addition to the Medicare program. We cover more on this topic in Chapter Four, “Medicare Supplement Insurance” and Chapter Five, “Medicare Advantage.”
You May Not Need Medicare Part A
If you believe you will not need Medicare Part A because you will be using another medical health benefit program, be sure to research this with your employer and with Medicare.
Contact an Advisor
Investment advisory services are offered through Provision Asset, LLC, a Registered Investment Advisor in the state of Texas. Insurance products and services are offered through Provision Retirement, LLC, or through our team of independent agents. Provision Asset, LLC and Provision Retirement, LLC are affiliated companies. Provision Asset, LLC and its advisors do not render tax, legal, or accounting advice.