Medicare helps tens of millions of Americans get necessary healthcare coverage in retirement. With coverage available at age 65 for most participants, the various parts of Medicare work together to provide comprehensive coverage for multiple types of healthcare needs. Under the traditional Medicare program, Part A offers hospital and inpatient-care services.
Medicare Part A sees minor changes each year, and the government agency that administers the program recently announced what’s new for 2023. Here’s what participants can expect.
What Medicare Part A offers you
Medicare Part A coverage comes into play when you require a hospital stay or need to go to a skilled nursing facility. Under typical coverage, patients get coverage for medically necessary hospital stays, giving them a semi-private room and the medical treatment, services, tests, and prescription drugs needed to address the patient’s condition. Patients also qualify to receive meals during their stays.
Medicare Part A is intended to provide the healthcare needed to resolve adverse health conditions fully. Stays of two days or more qualify for coverage, with the federal government financing extremely long stays, in many cases.
It’s important to understand that Medicare Part A doesn’t cover long-term nursing-home stays. However, skilled nursing care does qualify, although for inpatient-facility costs to be covered, patients typically need to have had a related hospital stay of at least three days. As with hospital stays, Medicare’s intent with its skilled nursing-care coverage is to address conditions and get participants back to full health.
Patients can also get access to some other services under Medicare Part A. These include home hospice care for terminally-ill patients, as well as home-provided care for other conditions when it’s medically necessary.
Medicare Part A costs
One big benefit of Medicare Part A is that most people are eligible to participate without having to pay a monthly premium. If you or your spouse paid into the Medicare program via payroll withholding for at least 10 years, you generally won’t have to pay for Part A coverage.
Some people who don’t have 10 full years of work history will have to pay monthly premiums. Those working between 30 and 39 quarters will pay $278 per month in 2023, up $4 from 2022. Those with less than 30 quarters of eligible work history have to pay $506 per month, higher by $7 from year-earlier levels.
If you need to use your Part A coverage during the year, there are additional costs under the program. A deductible of $1,600 for 2023 applies upfront before Medicare starts to cover costs. That’s $44 higher than it was in 2022.
There are also copayments for many Part A services. After the deductible is met, Medicare provides full coverage for the first 60 days of a hospital stay. From the 61st day to the 90th, the copayment is $400 per day, up $11 from 2022. On the 91st day and beyond, you have 60 lifetime reserve days for which you’ll pay $800 per day in 2023, $22 higher than in 2022.
The cost structure for skilled nursing-facility stays is similar. Copayments are $0 for the first 20 days, and then from the 21st day to the 100th day, patients have to pay $200 per day. That’s up by $5.50 per day from 2022. Beyond the 100th day, Medicare no longer offers coverage.
Take advantage of Medicare Part A
Retirees always have to take healthcare costs into consideration as a key expense in their retirement planning. Medicare Part A does a great job of covering many of those costs, but it doesn’t cover everything. By getting to know the program better, you can more accurately plan for your overall finances in retirement.
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