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How is Medicare Part A financed and which services does it cover?
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Medicare Part A, often referred to as hospital insurance, is primarily financed through Social Security payroll taxes collected under the Federal Insurance Contributions Act (FICA). Most beneficiaries do not pay a monthly premium for Part A because they or their spouses contributed to the program through these payroll taxes during their working years.123
Part A provides coverage for several types of inpatient and facility-based care, including:
- Inpatient hospital care: Covers costs for up to 90 days per benefit period, with a lifetime reserve of additional days available.2
- Skilled nursing facility care: Covers up to 100 days of care following a qualifying hospital stay.2
- Hospice care: Provided for terminally ill patients.32
- Home health services: Includes certain medically necessary visits by nurses or technicians.32
While Part A covers these services, beneficiaries are typically responsible for deductibles and co-payments for specific periods of care. If an individual does not qualify for premium-free Part A, they may generally purchase it by paying a monthly premium.23