Qualifying for Premium-Free Medicare Part A Coverage
Learn which criteria determine your eligibility.
Is There a Monthly Premium for Medicare Part A?
As you near eligibility for Medicare, which for most Americans is age 65, you may be analyzing what costs lay ahead for your healthcare coverage.
For starters, Original Medicare, also known as Traditional Medicare, is made up of two parts: Part A and Part B.
All Medicare beneficiaries that enroll in Part B pay a monthly premium for their Part B coverage.
Part A coverage, however, is typically premium-free for most enrollees and covers services such as inpatient hospital care, skilled nursing facility care, home health care, and hospice care.
For this reason, many individuals enroll in Part A when they become eligible even if they have other ongoing insurance coverage (such as from an employer).
With Part B, on the other hand, some individuals choose to postpone enrolling due to the monthly premium.
If you, or your spouse, have paid Medicare taxes (FICA tax) for 40 quarters or more (i.e. 10 years), you too will qualify for premium-free Part A coverage. FICA tax, which includes Medicare tax and Social Security tax, is withheld from your wages as an employee.
However, if you are an individual that does not qualify for premium-free Part A, you will be required to pay a monthly premium for Part A coverage.
The exact amount you must pay will depend on the number of quarters you have paid FICA tax and when you decide to purchase your Part A coverage.
If you are an individual that has not paid the full 40 quarters of FICA taxes, there are two tiers for your Part A premium cost:
Individuals that have paid Medicare taxes for 30 – 39 quarters (i.e. between 7.5 and 9.75 years).
Individuals that have paid Medicare taxes for less than 30 quarters (i.e. 7.5 years).
The first tier, in which the purchaser has paid between 30 and 39 quarters of Medicare taxes (but still shy of the required 40 for premium-free), will be the less expensive Part A premium compared to that of the second tier.
Additionally, keep in mind that if you wait until after your Initial Enrollment Period to purchase Part A coverage, a 10% late penalty may be applied to your premium.
The longer you wait to enroll, the longer you will be required to pay a higher Part A premium amount due to penalty.
Important Note: As you consider your costs for Medicare coverage, keep in mind that if you don’t qualify for premium-free Part A and are considering purchasing coverage, you will also need to purchase Medicare Part B, as well.
Medicare Part A cannot be purchased on its own, so if you do purchase Part A coverage you will then be paying two monthly premiums for your Medicare coverage, Part A and Part B.
Do I Qualify for Premium-Free Medicare Part A?
The vast majority of Medicare enrollees qualify for premium-free Part A coverage. This is the most common scenario for those enrolling in Medicare once they become eligible.
Additionally, if you’re already receiving benefits from Social Security or the Railroad Retirement Board at the time of your Medicare eligibility, you will be automatically enrolled in Medicare Part A.
In the months prior to your 65th birthday you will receive your Medicare card in the mail along with information that details your coverage.
However, for those that are not already receiving these benefits and are curious as to whether or not they qualify for premium-free Part A, check the following criteria to see if any apply to you:
You are 65 years old and you (or your spouse) have paid Medicare taxes (FICA) for 10 years.
You already receive benefits from Social Security or the Railroad Retirement Board.
You are eligible for benefits from Social Security or the Railroad Retirement Board but have not yet filed for them.
You are disabled and you (or your spouse) have paid FICA taxes for 10 years. In this case, you are eligible for Medicare once you have received Social Security benefits for 2 years.
How to Check Your Medicare Part A Eligibility & Premium
In addition to the criteria mentioned above, you can check your eligibility for Medicare and get an estimate of what your premium will be through use of Medicare’s Eligibility & Premium Calculator.
The calculator is free to use and the questions should take less than a minute to answer. Once completed, the calculator can provide your eligibility status and an estimation of what your monthly premium will cost.
Even if you know you are not currently eligible for Medicare, by entering your information, the calculator can give you exact dates for your upcoming Initial Enrollment Period.
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