Key Takeaways

• Medicare Part A is often assumed to provide full coverage for hospital-related care, but it has limits that leave you responsible for significant out-of-pocket costs in many situations.

• Understanding the cost-sharing structure, coverage periods, and what is not covered by Part A can help you avoid surprise medical bills and plan more effectively.

What Medicare Part A Covers

Medicare Part A, often called hospital insurance, primarily helps cover inpatient care. This includes:

• Inpatient hospital stays

• Skilled nursing facility care (under strict conditions)

• Hospice care

• Some home health care services (if following a hospital stay)

You qualify for premium-free Part A if you or your spouse paid Medicare taxes for at least 10 years. But while the premium may be free, the coverage itself is not without costs.

Why You Might Still Get Large Bills

Despite its broad description, Part A has specific limitations in both duration and cost coverage. Many people are surprised to receive bills after what they thought was fully covered care. Here are the most common scenarios that lead to those unexpected charges:

1. The Hospital Deductible Applies for Every Benefit Period

In 2025, the Medicare Part A deductible is $1,676 per benefit period. This is not annual. A benefit period starts the day you are admitted to a hospital and ends when you have been out of the hospital or skilled nursing facility for 60 days in a row.

You may have multiple benefit periods in a year, meaning you could pay that $1,676 deductible more than once.

2. Coinsurance Kicks in for Long Stays

Medicare Part A covers the full cost of inpatient hospital care only for the first 60 days in a benefit period. Starting from day 61, coinsurance begins:

• Days 61–90: $419 per day

• Days 91–150 (lifetime reserve days): $838 per day

You only have 60 lifetime reserve days over your lifetime. Once those are used, you must pay all costs for any hospital days beyond day 90 in a benefit period.

3. Skilled Nursing Facility Care Isn’t Always Covered

Skilled nursing care is another area where many assumptions lead to surprise charges. Medicare Part A covers this care only if:

• You had a qualifying hospital stay of at least 3 consecutive inpatient days (not including the discharge day)

• You are admitted to a Medicare-certified skilled nursing facility within 30 days of that hospital stay

• You need skilled care for a condition related to the hospital stay

Even if you meet those conditions, coverage has limits:

• Days 1–20: Fully covered

• Days 21–100: You pay $209.50 per day in coinsurance

• After 100 days: You pay the full cost

Failing to meet any of the above conditions can leave you responsible for the full cost from the beginning.

4. Observation Status vs. Inpatient Admission

Many hospital stays that feel like admissions are billed differently due to something called “observation status.” If you are kept in a hospital under observation rather than formally admitted as an inpatient, Medicare Part A does not cover the stay. Instead, it falls under Part B.

This affects:

• Your out-of-pocket costs (which may be higher under Part B)

• Your eligibility for skilled nursing facility coverage, since observation stays don’t count toward the 3-day qualifying inpatient stay

You might not realize your status until you receive the bill.

5. Costs Outside the Hospital Stay

Medicare Part A doesn’t cover:

• Physician services while you are in the hospital (these fall under Part B)

• Ambulance transportation (if not medically necessary or if you are not admitted)

• Prescription drugs outside of hospice care

These costs can be substantial depending on the circumstances.

6. Hospice Care Limitations

Hospice is covered under Part A if your doctor certifies that you have a terminal illness with a life expectancy of 6 months or less. However, you may still face costs for:

• Room and board if you receive hospice care in a facility not covered by Medicare

• Drugs unrelated to pain relief or symptom control

• Emergency care if you revoke hospice to seek curative treatment

Carefully reviewing hospice eligibility and associated rules can prevent billing surprises.

7. Gaps in Home Health Services

Medicare Part A may cover limited home health care following a qualifying inpatient stay. But many people assume it covers all home health care, which is not true.

Coverage is limited to:

• Part-time skilled nursing

• Physical, occupational, or speech therapy

• Medical social services

It does not cover:

• 24-hour home care

• Meals delivered to your home

• Personal care (bathing, dressing) if it is the only care you need

If you need long-term home assistance, you’ll likely pay out-of-pocket.

8. Out-of-Pocket Maximums Do Not Apply

Unlike many employer or private health insurance plans, Original Medicare (including Part A) does not have an annual out-of-pocket maximum. This means your costs can accumulate significantly over the year, especially if you have:

• Multiple hospitalizations

• Long-term hospital stays

• Extended skilled nursing needs

What You Can Do to Protect Yourself

Avoiding surprise bills under Part A requires careful planning, attention to details, and a solid understanding of what is and isn’t covered. Here’s what can help:

Review the Medicare Summary Notice (MSN)

This notice is mailed to you every 3 months and shows what services were billed to Medicare, what Medicare paid, and what you may owe. Reviewing it can help you spot billing errors early.

Clarify Admission Status

Ask the hospital whether you are being admitted as an inpatient or being kept under observation. It makes a major difference in both your eligibility and your future bills.

Know the Rules for Skilled Nursing Facility Care

Confirm that your hospital stay qualifies you for SNF care before you leave the hospital. Keep records of dates and discharge instructions.

Plan for Out-of-Pocket Costs

While Medicare Part A covers many essential services, it doesn’t cover them completely. You need to be financially prepared for:

• Deductibles

• Coinsurance

• Full cost of care after limits are met

Consider speaking with a licensed agent listed on this website for options that could help fill these coverage gaps.

Learn What Counts as a New Benefit Period

If you are readmitted to a hospital more than 60 days after discharge, a new benefit period starts, and you pay the Part A deductible again. Planning around this timeline can help avoid duplicate costs.

Coordinate Part A with Other Medicare Options

Medicare Part A works alongside Part B and, if you choose, other supplemental options. Each component has a role, and understanding how they interact can prevent duplicate or unexpected charges.

Why These Bills Keep Catching People Off Guard

The confusion often comes from the assumption that because you earned premium-free Part A through your work history, it means full coverage. However, Medicare Part A’s structure includes many caveats that aren’t clearly explained until you receive care. The terminology around benefit periods, lifetime reserve days, and coinsurance also adds complexity.

Moreover, the lack of a maximum out-of-pocket cap leaves beneficiaries vulnerable to cumulative medical costs. Combined with a lack of clarity around admission status and coverage limitations, this creates an environment where even the most diligent person can get surprised.

Avoiding Costly Surprises Starts with Knowing the Limits

Medicare Part A is a vital component of your healthcare coverage, but it’s not comprehensive. By understanding when your coverage begins, when it ends, and what it doesn’t pay for, you can make better choices, ask smarter questions, and prepare for the expenses that might follow a hospital stay.

If you’re unsure about how Medicare Part A fits into your overall healthcare picture, speak with a licensed agent listed on this website to evaluate your situation and get help with making the right coverage decisions.