Medicare Part A is Hospital Insurance
- For most Americans, Medicare Part A is typically free. If you or your spouse have had Medicare taxes withheld for at least 10 years while working, you are eligible for premium-free Medicare Part A. If you’ve paid Medicare taxes for less than 10 years, you will likely not qualify for premium-free Part A and will have to buy Part A.
- While premiums are free, if you ever visit the hospital there is a deductible that you must pay, which covers your first 60 days of a hospital stay.
Medicare Part B is Medical Insurance
- Medicare Part B helps to cover any outpatient healthcare services, such as doctor or specialist visits. Medicare Part B is typically NOT free. When you enroll in Part B, you must start paying premiums.
- In addition, there is typically an annual deductible before Part B insurance kicks in and after this deductible, you are responsible for 20% of the costs of all Medicare-covered services. In other words, Medicare will pay for 80% of the cost of healthcare services you use, and you have to pay the remaining 20%.
It is possible to sign up to Medicare Part A and Part B at different times.
- Most people will typically sign up for Part A when they turn 65. When you should sign up for Part B depends on your employment situation, which we’ll walk through later in this series.
