Medicare Part A Explained: Everything You Need to Know About Hospital Insurance (2025)

Medicare Part A is often called "hospital insurance," but that simple label doesn't tell the whole story. What does it really cover? When do you pay versus when is it free? What's the difference between "inpatient" and "observation"—and why does it matter so much to your wallet?

Let's break down Part A in detail so you understand exactly what you're getting, what it costs, and how to avoid expensive surprises.

What Is Medicare Part A?

Part A is the portion of Medicare that covers care when you need to stay somewhere for treatment—hospitals, skilled nursing facilities, hospice, or receive certain home health services.

Most people don't pay a monthly premium for Part A because they (or their spouse) worked and paid Medicare taxes for at least 10 years.

But "free premium" doesn't mean "free care." You'll still face deductibles and coinsurance that can add up quickly.

What Part A Covers (in Detail)

1. Inpatient Hospital Care

This is the big one. When you're formally admitted to a hospital as an inpatient, Part A covers:

Your Room:

• Semi-private room
• Private room only if medically necessary
• All meals

Medical Care:

• Nursing services
• Doctor services are billed under Part B (even during a hospital stay)
• Medications administered in the hospital
• Medical supplies and equipment
• Lab tests, X-rays, diagnostic services
• Operating and recovery room costs
• Rehabilitation services bundled into inpatient care

What's NOT Covered:

• Private room (unless medically necessary)
• Television or phone service
• Personal care items
• Private duty nurses

Critical Distinction: Inpatient vs. Observation

This is where many people get caught off guard.

• Inpatient status means you've been formally admitted to the hospital.
• Observation status means you're being monitored but are considered an outpatient — even if you stay overnight.

This matters because:

• Observation care is billed under Part B
• Observation days do not count toward the 3-day requirement for skilled nursing

2. Skilled Nursing Facility (SNF) Care

Part A covers skilled nursing or short-term rehabilitation only when all conditions are met:

• A qualifying 3-day inpatient hospital stay
• Enter SNF within 30 days
• Need daily skilled care
• A doctor certifies the need

What Part A Covers:

• Semi-private room
• Meals
• Skilled nursing
• PT, OT, speech therapy
• Medications
• Medical equipment and supplies

What Part A Does NOT Cover:

• Custodial care
• Long-term nursing home care
• Personal care alone
• Private room unless medically necessary

Costs (2025):

• Days 1–20: $0
• Days 21–100: $209.50/day
• Days 101+: You pay all costs

3. Hospice Care

Hospice is covered when you have a terminal illness and a life expectancy of six months or less.

Covered:

• Nursing and physician services
• Pain and symptom management
• Medications related to the terminal diagnosis
• Equipment (bed, oxygen, etc.)
• Home health aide services
• Social work and counseling
• Short-term inpatient care
• Short respite stays

Costs:

• $0 for hospice care
• Up to $5 for hospice medications
• Up to 5% for respite care

You can leave hospice at any time.

4. Home Health Care

Home health is covered by Part A or Part B, depending on the situation.

Requirements:

• Homebound
• Need intermittent skilled nursing or therapy
• Doctor's order and ongoing review
• Medicare-certified agency

Covered:

• Skilled nursing
• PT/OT/speech therapy
• Medical social work
• Limited home health aide support (when skilled care is also present)
• Medical supplies

Not Covered:

• 24-hour care
• Meals
• Homemaker services
• Personal care alone

Cost: $0 for covered services.

What Part A Costs in 2025

Real-World Scenarios

Scenario 1: Hip Replacement

• Admitted inpatient → Part A applies
• Pay $1,676 deductible
• Home health PT afterward billed under Part B, not Part A

Scenario 2: Stroke → Rehab

• Hospital stay: $1,676 deductible
• SNF Days 1–20: $0
• SNF Days 21–30: 10 × $209.50 = $2,095
• Total: $3,771

Scenario 3: Observation Status

• Three days in hospital but never admitted
• All billed under Part B, not A
• SNF denied because no 3-day inpatient stay

How to Protect Yourself from High Part A Costs

1. Medigap

Covers:

• Part A deductible
• Hospital coinsurance
• SNF coinsurance
• Extra hospital days

2. Medicare Advantage

Has an annual out-of-pocket limit (Original Medicare does not).

3. Verify Hospital Status

Ask: "Am I inpatient or observation?"

4. Confirm SNF Eligibility Before Transfer

Ask:

• "Do I meet the 3-day inpatient rule?"
• "Is my care considered skilled?"

Common Questions

Do I have to enroll in Part A?

If you receive Social Security, you're enrolled automatically.

Does Part A cover rehab?

Only if it's skilled rehab after a qualifying inpatient stay.

Does Part A cover long-term care?

No — it covers short-term skilled care only.

The Bottom Line

Part A covers hospital stays, skilled nursing, hospice, and limited home health — but costs and eligibility rules are strict. The biggest traps are:

• Observation status
• The 3-day inpatient rule
• The $209.50/day SNF coinsurance after Day 20

Knowing how Part A works helps you avoid unexpected bills and advocate confidently.