INSURANCE 101: Medicare Part A

Compulsory Hospitalization Insurance (HI)
Under the Social Security Act of 1965, Medicare was created as two separate government-funded health insurance plans coordinated through the Centers for Medicare and Medicaid Services (CMS) for individuals age 65 and older – Medicare Part A: Compulsory Hospitalization Insurance (HI) and Medicare Part B: Supplementary Medical Insurance (SMI).


Benefit Period
Unlike health insurance in which policy benefits and deductibles are based on the calendar year, Medicare Part A benefits are payable to enrollees on a ‘per benefit period’ basis.  This means that each benefit period provides new benefits and is subject to a benefit period deductible and daily copayments.

A benefit period begins when an enrollee enters a hospital and extends through the 60th day after the enrollee has been discharged from the hospital.  Readmission to a hospital within 60 days of a previous discharge is considered part of the original benefit period and is not subject to a new deductible.

If an enrollee re-enters the hospital after the 60th day of discharge, a new benefit period begins. The enrollee is responsible for paying a new deductible and is provided with an additional 90 days of hospitalization coverage.

Part A Benefits

Inpatient Hospital Care
Inpatient hospital care includes a semiprivate room for individuals in need of medically necessary care, as well as meals, regular nursing services, special care units, drugs administered at the hospital, tests, medical supplies, operating room, and other hospitalization services.

Inpatient hospital care is paid for under Part A as follows:

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• After the enrollee pays the Part A deductible, Medicare covers 100% of the first 60 days of hospitalization expenses
• Beginning on the 61st – 90th day, Medicare continues to cover hospitalization expenses; however, the enrollee is responsible for a daily co-payment
• Readmission to a hospital within 60 days of a previous discharge is considered part of the original benefit period (if after 60 days, a new benefit period begins)
• After the 90th day of hospitalization, the enrollee is responsible for all remaining daily medical expenses incurred within the benefit period unless he or she utilizes ‘lifetime reserve days’

Lifetime Reserve Days
In addition to each inpatient hospital care benefit period, an enrollee is entitled to 60 ‘lifetime reserve’ days which can only be applied to hospitalization stays beyond the initial 90 days and are not renewable upon their use.

In the event that hospitalization extends beyond the 90th day within a given benefit period, an enrollee can elect to utilize any or all of his or her lifetime reserve days up to the maximum 60 additional days.  Unlike the initial 90 days of renewable benefits, once a lifetime reserve day has been utilized, it is not renewed.

When lifetime reserve days are exhausted, there is no out-of-pocket maximum for hospitalizations beyond 90 days.

Mental Health Inpatient Hospitalization Limitations
Part A covers mental health care services received in a hospital when an enrollee is required to be admitted as an inpatient. An enrollee can receive these services either in a general hospital or a psychiatric hospital that only cares for people with mental health conditions.

If an enrollee is a patient in a psychiatric hospital (instead of a general hospital), Part A only pays for up to 90 days of inpatient psychiatric hospital services during the enrollee’s lifetime.

All enrollees with Part A are covered for mental health inpatient hospitalization care and are responsible for paying a mental health deductible for each benefit period, as well as a per day coinsurance amount from day 1 to day 91.  Beyond the 91st day, lifetime reserve days continue to provide coverage up to the maximum 60 additional days.  After the additional lifetime reserve days have been exhausted, the enrollee is responsible for all costs of continued care.

Part A will also cover 20% of the Medicare-approved amount for mental health services received from doctors and other providers while hospitalized as an inpatient.

Part A Does Not Cover:

• Private duty nursing
• A phone or television in the hospital room
• Personal items such as toothpaste, socks, or razors
• A private room, unless deemed medically necessary

There is no limit to the number of benefit periods an enrollee can receive when mental health care is provided in a general hospital.

In addition to Inpatient Hospital Care, Part A provides the following care:

• Skilled Nursing Facility Care (SNF)
• Home Health Services
• Hospice Care
• Respite Care

Skilled Nursing Facility Care (SNF)
Following a hospital stay of at least 3 days, Part A provides skilled nursing care in a skilled nursing facility to enrollees for up to 100 days per benefit period.  Medicare covers 100% of the costs for the first 20 days, and shares the cost with the enrollee through a daily co-payment for days 21 – 100.

Skilled nursing care must be administered by a Medicare-approved skilled nursing facility staffed with licensed nursing personnel.

Home Health Services
Part A also provides coverage for intermittent home health services that are administered through public and private agencies at the enrollee’s home.  Medicare provides up to 20 days of home health care per benefit period.

Home health care services include intermittent skilled nursing care, physical therapy, speech-language pathology services, continued occupational services, home health aides, medical social services, medical supplies, and 80% coverage of any durable equipment, such as a wheelchair or at-home hospital bed.

To qualify for home health services, an enrollee must be under the care of a doctor who certifies the enrollee as ‘homebound,’ and services must be provided ‘intermittently,’ or on a part-time basis.

Part A does not cover 24-hour-a-day care at the enrollee’s home, nor does Part A deliver meals or provide homemaker services or personal care.

Hospice Care
Part A provides services to terminally ill enrollees, as well as their families, when certified as terminally ill by the enrollee’s physician.

In addition to being certified as terminally ill, the enrollee must accept to receive ‘palliative’ care, meaning care to comfort, but not to cure one’s illness, and must sign a statement choosing hospice care.  Part A covers 100% of all costs, with the exception of a small prescription drug co-payment.

Among the many services included such as doctor and nursing care, medical equipment, supplies, pain relief and symptom control drugs, Part A also provides short term relief, called ‘respite care’ for the caregiver of an at-home hospice enrollee.

Respite Care
Often referred to as ‘Caregiver’ care, Medicare Part A provides up to 5 consecutive days of hospice care for an at-home enrollee in order to provide ‘time off’ for the caregiver.