Subscribe
In 2018, 50% of U.S. retirees spent at least $4,300 on health care — and high-cost Medicare retirees exceeded that figure by more than double at $10,000.
While medical insurance may cover some of your healthcare costs in retirement, chances are you will still have substantial out-of-pocket expenses. Most people over the age of 65 get additional coverage from the federal government through Medicare.
From Medicare Part A to Part D, and everything in between, most Americans know little about how the program works and what each part covers.
This article explains the difference between Medicare Parts A and B in terms of coverage, exclusions, and costs in 2024.
What are Medicare Parts A and B?
Medicare is a federal health insurance program that covers medical expenses for Americans aged 65 and over. It is divided into four parts:
- Part A: Hospital Insurance;
- Part B: Medical Insurance;
- Part C: Medicare Advantage Plan;
- Part D: Prescription Drug Coverage.
Medicare Parts A and B are the two main components of Original Medicare. Together, they cover a wide range of necessary medical services, from inpatient hospital care to doctor visits.
The other two parts, Part C and D, are offered by private insurance companies and cover prescription drugs (Part D) and medical services not covered by Parts A and B (Part C).
But what is Medicare Part A vs B?
What is Medicare Part A?
Medicare Part A, commonly known as hospital insurance, covers inpatient care in hospitals, skilled nursing facilities, and hospices. It also covers some home health care services like physical therapy.
In general, Part A covers medically necessary services that are considered essential for the diagnosis and treatment of your condition. This means that a doctor or other health care provider must prescribe the service for it to be covered.
What is Medicare Part B?
Medicare Part B, also known as medical insurance, covers a wide range of outpatient services, including doctor visits, outpatient care, home health care, preventive tests, durable medical equipment, and many more.
Similar to Part A, the covered treatment or service must be medically necessary and ordered by a doctor or other health care provider.
Differences between Medicare Part A and B
Since Part A and B both cover medically necessary services, you might be wondering what is the difference between them.
What does Medicare Part A cover?
Medicare Part A or Hospital Insurance essentially covers inpatient care in:
- Hospital care, including access to acute care hospitals, critical access hospitals, inpatient rehabilitation, and psychiatric facilities, and long-term care hospitals;
- Nursing home care, which is covered only when the beneficiary needs more than custodial care;
- Hospice and respite care, which is for terminally ill patients who choose palliative care over curative care and Medicare-covered treatments;
- Skilled nursing facility care, including meals, speech-language pathology, ambulance transportation, and dietary counseling;
- Home health services, including part-time skilled nurse care, medical supplies for use at home, injectable osteoporosis drugs for women, and physical therapy.
Part A doesn’t cover the following services and items:
- Personal care items;
- Private-duty nursing care;
- Private room (unless medically necessary);
- Television or phone in your room (if separately charged).
What does Medicare Part B cover?
Medical Insurance or Medicare Part B covers outpatient medical services and supplies for medically necessary and preventive services, such as:
- Ambulance service, which is covered only when traveling in any other vehicle could endanger your situation;
- Certain clinical research studies;
- Durable medical equipment, including blood sugar meters and strips, commode chairs, hospital beds, infusion pumps, oxygen equipment and accessories, and wheelchairs;
- Mental health inpatient, outpatient, and partial hospitalization;
- Certain outpatient prescription drugs;
- Preventive care services, including disease screenings, diabetes self-management training, flu shots, Hepatitis B shots, and COVID-19 vaccines.
The following services are not covered under Medicare Part B (not a complete list):
How much does Medicare Part A cost?
The services covered by Medicare Part A are free for most Americans. If you or your spouse worked and paid Medicare taxes for at least 10 years, you won’t have to pay a premium for Part A coverage.
If you are not eligible for premium-free Part A, you may have to pay up to $278 or $505, depending on how long you or your spouse worked and paid Medicare taxes. Note that you would need to sign up for Part B to be covered by Part A.
Although Part A is free for most people, you will still have to pay deductibles and coinsurance. In 2024, the deductible for Part A is $1,632 for each benefit period.
After you meet your deductible, you will still be responsible for paying a coinsurance if you stay in the hospital longer than 60 days. This adds up to $408 per day for days 61-90, $816 per day for days 91-150 while using your 60 lifetime reserve days, and all costs for a stay beyond 150 days.
How much does Medicare Part B cost?
Unlike Medicare Part A, Part B requires most people to pay a monthly premium. The standard Part B premium is $174.70 per month in 2024, although some high-income earners may have to pay more, depending on the gross income from their tax return.
In addition to your monthly premiums, you will also be responsible for paying deductibles and coinsurance for Part B services. The deductible for Part B in 2024 is $240, which should be settled before Medicare starts paying for your medical services.
For most services, you will also be responsible for paying 20% of the Medicare-approved amount after your deductible has been met. However, some preventative tests and screenings don’t require coinsurance.
Questions about Medicare?
Shoot us an email at medicare@hihella.com.
Article updated on October 17, 2023.
