Medicare Part A is inpatient hospital coverage, which includes skilled nursing care, hospice, and home health care. Medicare Part B is outpatient medical coverage that covers doctor’s visits, outpatient surgeries, and durable medical equipment, to name a few.
Collectively, Part A and Part B make up Original Medicare, the federal health insurance program in the United States available to individuals who are:
- 65 years or older
- Certain younger people with disabilities
- People with End-Stage Renal Disease (ERSD)
Table of Contents
What Is the Difference Between Medicare Part A and Part B?
Medicare Part A and Part B were made to complement each other, each covering different health services and having its own set of costs and limitations. Compare the two Medicare parts in the table below:
Medicare Part A | Medicare Part B | |
|---|---|---|
Eligibility | Must be at least 65 years old or eligible due to disability or ESRD | Must be at least 65 years old or eligible due to disability or ESRD |
Costs | Premium-free for most people, or either $278 or $505 per month, depending on the beneficiary’s income | $174.70 per month or higher based on your income |
Coverages | Inpatient hospital, skilled nursing facility care, home health care, and hospice | Outpatient doctor’s visits, durable medical equipment, preventative services, etc. |
Limitations | Limits on hospital stays and skilled nursing care | 20% coinsurance on most services with no annual cap |
What Is Medicare Part A?
Medicare Part A covers inpatient hospital care and a range of related services, such as the following:
- Skilled nursing facility stays
- Home health care
- Nursing home care
- Hospice care
While Part A will not pay for these services completely, it will help to decrease out-of-pocket costs significantly.
If you do not enroll in Part A when you’re first eligible, you may have to wait longer to enroll during a valid enrollment period, and you could face penalties.
Eligibility
You must be age 65 or older to receive Part A, but you may also qualify due to disability or ESRD. Those who are eligible due to disability can begin Part A after receiving disability benefits for 24 months. Others with certain chronic conditions, like ALS, may start Part A sooner.
What Is Medicare Part B?
Medicare Part B covers outpatient medical care such as the following:
- Doctor’s visits
- Preventive services
- Outpatient surgeries
- Clinical laboratory tests and services
- Durable medical equipment
- Mental health services
After you’ve met the deductible, you pay 20% of covered services. Just like Part A, there are late enrollment penalties associated with Part B if you fail to sign up when first eligible. Furthermore, to pick up additional coverage like a Medicare Advantage Plan or a Medicare Supplement plan, you must be enrolled in both Parts A and B.
Eligibility
Qualifications for Part B are the same as Part A. If you do not receive Part A premium-free, you must be at least 65 and be either a U.S. citizen or lawfully present and living in the U.S. for 5 consecutive years before applying for Part B.
Medicare Part A vs. Part B Costs
Medicare Part A | Medicare Part B | |
|---|---|---|
Costs | Premium-free for most people, or either $278 or $505 per month, depending on the beneficiary’s income | $174.70 per month, or higher based on your income |
Medicare Part A has a $1,632 deductible per benefit period, plus daily copays for inpatient hospital and skilled nursing care. If you do not qualify for premium-free Part A, you will pay either $278 or $505 monthly based on how long you or your spouse worked and paid Medicare taxes.
Medicare Part B has an annual deductible of $240 and a flat 20% coinsurance after that for covered services. The standard monthly premium is $174.70, but you could pay more based on your income.
Medicare Part A vs. Part B Coverages
Medicare Part A | Medicare Part B | |
|---|---|---|
Coverages | Inpatient hospital, skilled nursing facility care, home health care, and hospice | Outpatient doctor’s visits, durable medical equipment, preventative services, etc. |
Medicare Part A typically covers care you receive as an inpatient in the hospital, skilled nursing facility care, limited home health care, and hospice.
Alternatively, Medicare Part B covers services you receive as an outpatient, such as doctor and specialist visits, home health care, outpatient surgeries, preventive services, and durable medical equipment.
Which part you use will depend not only on the type of service you receive but also on where you receive it.
Medicare Part A vs. Part B Limitations
Medicare Part A | Medicare Part B | |
|---|---|---|
Limitations | Limits on hospital stays and skilled nursing care | 20% coinsurance on most services with no annual cap |
Neither Medicare Part A nor Part B will cover 100% of your healthcare needs. With Part A, you will pay all costs after day 150 of an inpatient hospital stay and day 100 in a skilled nursing facility.
The 20% Part B coinsurance adds up quickly if you need a major service like chemotherapy or surgery. Neither Part A nor B have a cap on how much you could spend out of pocket in a year.
How to Get Original Medicare
You may be automatically enrolled in Medicare if you received disability or retirement benefits from Social Security before age 65. Otherwise, if eligible, you can sign up for Original Medicare through the Social Security Administration (or Railroad Retirement Board).
Adhere to the following steps to sign up:
- Learn about Medicare coverage costs and limitations. Evaluate your healthcare needs and ensure you understand what your health costs and options will be moving forward.
- Understand enrollment deadlines. There are only certain times when you can enroll in Medicare.
- Investigate additional plans. Take a look at Medicare Advantage Plans and compare the coverage options. Review Medicare Supplement plans to see if that might be something you need.
- Sign up for Original Medicare. You can enroll as soon as three months before your 65th birthday month.
- Pick up additional coverage. If you do want to switch to Medicare Advantage, you must first be enrolled in Original Medicare.
Alternatives and Supplements to Original Medicare
Original Medicare does not cover everything, nor was it intended to. Therefore, you have options when it comes to lowering your out-of-pocket costs.
Medicare Advantage
Medicare Advantage Plans (aka Part C) replace Original Medicare with a network plan like an HMO or PPO. These plans are offered by private insurers and are regulated by Medicare to provide hospital and medical benefits that are at least as good as Medicare.
MA plans may offer additional benefits not covered by Original Medicare, such as prescription drug coverage (Part D) and dental, vision, and hearing benefits. Specific benefits and costs vary from plan to plan. For the most part, Medicare Advantage Plans have premiums as low as $0 and come with deductibles, copayments, and coinsurance for covered services.
Medicare Part D
Part D is prescription drug coverage, which covers prescriptions you pick up at the pharmacy and certain vaccines. You may either enroll in a stand-alone Prescription Drug Plan (PDP) alongside your Original Medicare or get Part D benefits as part of a Medicare Advantage Plan.
Prescription Drug Plans have premiums, deductibles, copayments/coinsurance, and a formulary, a list of covered drugs, all of which vary from plan to plan. If you keep Original Medicare as your primary insurance, a stand-alone Part D plan may be suitable, as neither Part A nor B covers prescriptions.
All in All
Both Part A (hospital insurance) and Part B (medical insurance) have limitations and costs associated with them. You may enroll in Original Medicare at specific times, so it is pertinent to be familiar with them as you become eligible for Medicare.
Since Original Medicare does not cover prescription drugs, dental, or vision, you should consider additional coverage, like a stand-alone Prescription Drug Plan or Medicare Advantage Plan, to meet your healthcare needs.