7.1 Medicare Part A: Hospital Insurance

What Medicare Part A Covers

Quick Answer: Medicare Part A is hospital insurance. It helps pay for inpatient care in a hospital or skilled nursing facility, plus home health care and hospice care. For most people, Part A is premium-free because they or their spouse worked and paid Medicare taxes for at least 40 quarters (10 years). The 2026 inpatient deductible is $1,736 per benefit period, with daily coinsurance kicking in after 60 days.

Medicare Part A is one of the two components of Original Medicare (the other is Part B). It is administered by the Centers for Medicare & Medicaid Services (CMS) and is funded primarily through the Hospital Insurance (HI) trust fund, which is financed by the 1.45% Medicare payroll tax on earned income (plus an additional 0.9% on high earners).

Part A covers four broad categories of care:

1. Inpatient Hospital Care

This is the core of Part A coverage. It includes semi-private rooms, meals, general nursing, medications administered during the stay, and other hospital services and supplies. To qualify, you must be formally admitted as an inpatient under a doctor's order; observation status does not count.

2. Skilled Nursing Facility (SNF) Care

Part A covers a stay in a skilled nursing facility following a qualifying 3-day inpatient hospital stay (3 consecutive days, not counting the discharge day). Covered services include skilled nursing, rehabilitation therapy, and medications. Custodial care (help with bathing, dressing, eating) is not covered.

3. Home Health Care

Part A covers medically reasonable and necessary home health care when a beneficiary is homebound and under a physician's plan of care. Coverage includes skilled nursing, physical therapy, speech-language pathology, and occupational therapy. A 0% coinsurance applies to home health services.

4. Hospice Care

Part A covers hospice care for beneficiaries who are terminally ill with a life expectancy of 6 months or less and who choose hospice care (palliative symptom management) instead of curative treatment. Covered services include pain relief, symptom control, nursing, medical supplies, and grief counseling for the family.

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Eligibility and Premium-Free Coverage

Most people do not pay a monthly premium for Part A. You qualify for premium-free Part A if you or your spouse earned at least 40 quarters (10 years) of Social Security/Medicare-covered employment. Approximately 99% of beneficiaries receive premium-free Part A.

For those who do not qualify for premium-free coverage, buy-in is available:

Note: The premium figures are set each year by CMS and rounded to the nearest whole dollar. The reduced premium for 30-39 quarters reflects a partial subsidy.

Enrollment reminder

Most people are automatically enrolled in Part A when they first become eligible (age 65 or after 24 months of Social Security Disability Insurance). Those who do not qualify automatically can sign up during the Initial Enrollment Period or General Enrollment Period.

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2026 Cost-Sharing: The Benefit Period Concept

Part A cost-sharing for inpatient hospital care is measured in benefit periods, not calendar years. A benefit period:

• Begins the day you are admitted as an inpatient to a hospital or SNF.
• Ends after you have been out of the hospital and SNF for 60 consecutive days.
• There is no limit to the number of benefit periods you can have.

2026 Inpatient Hospital Cost-Sharing per Benefit Period

Key points about the benefit period structure:

• The $1,736 deductible applies once per benefit period, not annually. If you are admitted, discharged, and readmitted after 60 days, a new benefit period begins and a new deductible applies.
• Days 91-150 are lifetime reserve days. You get 60 lifetime reserve days total; once used, they are gone forever. While using them, you pay $868/day.
• After all lifetime reserve days are exhausted, the beneficiary pays 100% of costs for inpatient hospital care until a new benefit period begins.

2026 Skilled Nursing Facility Cost-Sharing

After 100 days of SNF care in a benefit period, Part A pays nothing, and the beneficiary is responsible for the full cost. The SNF benefit resets only when a new benefit period begins (60 consecutive days out of the hospital and SNF).

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Hospice and Home Health Details

For hospice care, the beneficiary typically pays:

• Up to $5 per prescription for outpatient drugs for pain and symptom management.
• A 5% coinsurance for inpatient respite care (capped at the SNF coinsurance amount).
• No deductible and no Part A coinsurance for hospice services themselves.

For home health care, Part A covers the services described above with $0 coinsurance for the skilled services. Durable medical equipment is covered under Part B and carries 20% coinsurance.

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What Part A Does NOT Cover

It is equally important to know what Part A excludes:

• Custodial care: Help with activities of daily living (bathing, dressing, eating) when this is the only care needed. Custodial care is not skilled care and is excluded even in a nursing facility.
• Private-duty nursing: Private nursing care beyond what the facility provides.
• Personal comfort items: Television, telephone, private room upgrades.
• Most outpatient prescription drugs: Outpatient medications fall under Part D, not Part A (except drugs administered during an inpatient stay, which are bundled into the Part A payment).
• Dental, vision, hearing: Routine dental, vision exams, eyeglasses, and hearing aids are not covered.
• Care outside the United States: Part A generally does not cover care received abroad.

Because of these gaps, most beneficiaries pair Part A with Part B and often Part D (prescription drugs) or a Medicare Advantage (Part C) plan and/or Medigap supplement.

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Why Part A Matters for the A&H Exam

The Accident & Health exam tests Medicare knowledge because producers commonly advise clients transitioning to Medicare or coordinating employer/group coverage with Medicare. Key exam targets:

• Recognize that Part A is premium-free for most (40+ quarters).
• Know the benefit period mechanic and the $1,736 deductible (2026).
• Remember daily coinsurance tiers: $0 / $434 / $868 for inpatient days.
• Remember SNF tier: $0 days 1-20, $217/day days 21-100, full cost after 100.
• Understand that custodial care is excluded.

Mastering these figures and the benefit-period concept (versus a calendar-year deductible) is a high-yield exam topic.