Medicare is a blessing for millions of older Americans. But let’s be honest: it is also confusing. You have Part A, Part B, Part C, and Part D. It sounds like alphabet soup.
When you go to the hospital, understanding the difference between Part A and Part B is critical. If you mix them up, you could end up with a surprise bill for thousands of dollars.
Here is a simple breakdown of how Medicare covers your hospital stay and what you will have to pay.
Part A: Think “Accommodations”
Medicare Part A is widely known as “Hospital Insurance.”
Think of Part A as paying for the room and board. It kicks in when you are officially admitted to the hospital as an inpatient.
What Part A Covers:
- A semi-private room.
- Meals.
- Nursing care.
- Drugs given to you during your stay.
What You Pay:
Most people don’t pay a monthly fee (premium) for Part A. However, it is not free to use.
- The Deductible: You have to pay a deductible before Medicare pays anything. In 2024, this is $1,632.
- The Catch: This deductible is not a “once a year” fee. It is per benefit period. If you go to the hospital in January, you pay it. If you get sick again in November, you might have to pay it again.
Part B: Think “Doctors & Tests”
Medicare Part B is “Medical Insurance.”
Think of Part B as paying for the people and services. It usually covers care you get when you are not admitted to the hospital (outpatient).
What Part B Covers:
- Doctor visits (even inside the hospital).
- Ambulance rides.
- X-rays and lab tests.
- Emergency Room (ER) visits.
What You Pay:
You pay a monthly premium for Part B (usually taken out of your Social Security check).
- The Deductible: A small annual deductible ($240 in 2024).
- The 20% Rule: This is the big one. After the small deductible, Medicare pays 80% of the bill. You are responsible for the other 20%. There is no limit on this. If you have a $100,000 surgery under Part B, you owe $20,000.
Comparison: Who Pays What?
It helps to see the costs side-by-side.
| Feature | Medicare Part A (Inpatient) | Medicare Part B (Outpatient) |
| Primary Focus | Room, Board, & Nursing | Doctors, Tests, & Equipment |
| Premium | Usually $0/month | Monthly Fee (approx $174.70) |
| Your Cost | Flat Deductible ($1,632) | 20% of the total bill |
| Hospital Status | Admitted “Inpatient” | ER or “Observation” |
The “Observation Status” Trap
This is the most dangerous confusion in Medicare.
You can stay in a hospital bed for three days, eat hospital food, and see hospital nurses, but still be considered an Outpatient.
If the doctor keeps you under “Observation Status” instead of admitting you as an inpatient:
- Part A pays nothing.
- Part B pays. This means you are stuck paying 20% of the huge hospital bill.
- No Rehab Coverage: If you need to go to a skilled nursing facility for rehab after the hospital, Medicare will not pay if you were only under observation. You must have a 3-day inpatient stay to get rehab coverage.
Tip: Always ask the doctor: “Am I admitted as an inpatient, or am I under observation?”
Filling the Gaps
Because Part A has a high deductible and Part B has that unlimited 20% cost, many seniors get extra insurance.
- Medigap (Supplement): You pay a private company a monthly fee, and they pay the deductibles and that scary 20% for you.
- Medicare Advantage (Part C): This replaces original Medicare. It usually has lower upfront costs but restricts you to a network of local doctors.
Protect Your Savings
Medicare is great, but it has holes. A single hospital stay can cost you thousands if you don’t know the rules.
Check your coverage today. If you only have Original Medicare (A & B), look into getting a Medigap plan. It might cost a little each month, but it protects your life savings from a sudden hospital trip.