If you are nearing 65, you may have heard about Medicare Part A and Part B. These make up the components of Original Medicare. But, what is the difference between Medicare Part A and Part B?
In a nutshell, Medicare Part A is hospital coverage, while Medicare Part B provides coverage for outpatient medical care. They complement each other to provide you broad health insurance coverage.
In this article, we will talk about the differences between Medicare Part A and Part B.
How are Part A and Part B defined?
The Centers for Medicare and Medicaid Services (CMS) provides a Medicare Part A definition as follows – Medicare Part A includes coverage for inpatient care in hospitals, including critical access hospitals and skilled nursing facilities (SNF) (not custodial or long-term care). Part A also covers surgery, a semi-private room and meals during a hospital stay, and some home health care.
In addition, part A also covers hospice care for terminally-ill patients.
Under special cases, Part A covers confinement in the following hospitals:
- Acute care
- Critical access
- Inpatient rehabilitation
- Long-term care
- Inpatient psychiatric care
- Qualified clinical research studies
Part B coverage includes the following:
- Outpatient care
- Doctors’ visits
- Physical and occupational therapy
- Laboratory tests
- Durable medical equipment (DME)
- Flu shots
- Emergency room services
- Ambulance services
The lists provided above are not exhaustive. They give you a general idea of the differences in coverage between Medicare Part A and Part B.
Before we go any further, we should mention that prescription drugs and other benefits such as dental, vision, and hearing are not covered by Medicare Parts A and B. You can get coverage for these other benefits through Part C (Medicare Advantage) plans and drug coverage through Part D plans.
Is there a difference in eligibility requirements for Medicare Part A and Part B?
You are qualified for Medicare Part A if you are:
- a US citizen (or a permanent resident for five consecutive years); and
- 65 or older
If you are below 65, you can also be qualified for Part A if you have been:
- Receiving Social Security disability benefits for at least 24 months
- Diagnosed with end-stage renal disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS)
Medicare Part B eligibility follows the same qualifying criteria as Part A. Therefore, there is no difference between Medicare Parts A and B as far as eligibility is concerned.
Are Medicare Parts A and B free?
Part A premiums are free, as long as you have paid Medicare taxes for at least ten years (or 40 quarters). If not, then you will typically need to pay a premium for Medicare Part A. The rates for 2022 are $499 (if you paid for less than 30 quarters) and $274 (if you paid from 30 to 39 quarters).
Does Medicare cover 100 percent of hospital bills?
Yes, but only after you pay a certain amount upfront first.
Here is how it works:
- You pay a deductible of $1,556 (in 2022) for any stay in a hospital before your Part A coverage starts
- After meeting this deductible, Part A covers the first 60 days of your hospital stay
- From the 61st to 90th day, you pay a coinsurance of $389 per day (in 2022)
- After 90 days, you pay 100% of the costs, or $778 per day (in 2022), for any unused ‘lifetime reserve days.’
So, even though Part A premiums are typically free, you still have out-of-pocket expenses – deductibles, copayments, and coinsurance – for Medicare Part A services.
When it comes to Medicare Part B premiums, there is another difference to Medicare Part A – generally, everyone needs to pay Part B premiums.
The standard monthly premium for Medicare Part B is $170.10 (in 2022). But if your income (from two years ago) exceeds a certain amount, your Part B premium will be adjusted.
Part B also has an annual deductible of $233 (in 2022). After reaching this deductible, you will pay a 20 percent coinsurance for all Part B services received.
Is there a difference between enrollment periods for Medicare Part A and Part B?
There is no difference in enrollment periods between Medicare Part A and Part B. You can enroll in Parts A and/or Part B during the following enrollment periods:
- Initial Enrollment Period (IEP) – a seven-month period that starts three months before the month of your 65th birthday
- General Enrollment Period (GEP) – from January 1 to March 31 if you missed your IEP
- Annual Election Period (AEP) – from October 15 to December 7 every year
Special Enrollment Period (SEP) – if your case falls under a ‘qualifying event,’ like losing your employer coverage
Is there a difference between Medicare Part A and Part B late enrollment penalties?
If you did not enroll during your IEP, there are late enrollment penalties for Medicare Parts A and B.
However, you are exempted from penalties if:
- You are eligible for free Part A premiums.
- You still have qualifying coverage. If you are working after turning 65, you may still receive coverage from your employer. Your spouse’s employer can also count as qualifying coverage.
- The third difference between Medicare Parts A and B is the computation of late enrollment penalties.
Here is a summary:
Do you need help in paying Part A and Part B?
Under Original Medicare, a supplementary plan called Medigap can help pay out-of-pocket costs like deductibles, copayments, coinsurance, and other excess charges.
You can choose from among ten Medigap plans – each one with different coverage for Medicare Parts A and B.
The best time to join a Medigap plan is during the Medicare Supplement Open Enrollment Period (MS-OEP), a six-month period that starts after your enrollment in Part B. During this period, you have ‘guaranteed issue rights.’ This means that you will be guaranteed acceptance into coverage during this, without any type of medical underwriting or review of your medical history.
The good news is that your pre-existing health conditions are covered under a Medigap plan. Plus, you will not be charged extra based on any past or present health issues.
Now that you are aware of the differences between Medicare Parts A and B, you can make an informed decision about your options. Remember to take advantage of applicable enrollment periods in order to avoid incurring unnecessary penalties.
The CoverRight team is here to help with any questions you may have regarding the differences between Medicare Parts A and B and how you can maximize the benefits of both.