Key Takeaways
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Medicare Part A and Part B cover different types of medical services, and understanding these distinctions can help you avoid unexpected out-of-pocket expenses.
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Costs such as premiums, deductibles, and coinsurance vary significantly between the two parts, impacting how much you may end up paying for healthcare in 2025.
Understanding Medicare Part A and Part B
Medicare is a crucial program that provides health coverage for millions of Americans, but it’s not as simple as signing up and getting all your medical costs covered. Medicare is divided into multiple parts, with the two most essential being Part A (Hospital Insurance) and Part B (Medical Insurance). While they work together, they have distinct roles, coverage limits, and cost structures that could greatly influence your overall healthcare expenses.
Let’s break down the surprising differences between Medicare Part A and Part B so you can make better decisions about your coverage and finances.
What Medicare Part A Covers (And What It Doesn’t)
Medicare Part A is often referred to as hospital insurance because it primarily covers inpatient hospital stays and related services. However, there are limits to what it pays for, and you might be responsible for a share of the costs.
Covered Services Under Part A:
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Inpatient hospital care – Covers hospital stays, including semi-private rooms, nursing care, meals, and certain hospital services.
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Skilled nursing facility (SNF) care – Only covered under specific conditions, such as after a qualifying hospital stay.
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Hospice care – Available for terminally ill patients, covering pain management and other necessary care.
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Some home health services – Limited to medically necessary skilled nursing or therapy services.
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Short-term rehabilitation – May be covered if prescribed by a doctor following a hospital stay.
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Blood transfusions – Covered if received in a hospital setting after the first three pints of blood.
What Medicare Part A Doesn’t Cover:
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Long-term custodial care (such as nursing home stays beyond skilled nursing coverage limits)
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Private-duty nursing or personal caregivers
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Non-medically necessary hospital stays
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Outpatient medical procedures, including diagnostic tests and preventive screenings
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Most prescription drugs received outside of a hospital stay
What Medicare Part B Covers (And What It Doesn’t)
Medicare Part B, also known as medical insurance, covers outpatient care and physician services. It is designed to help pay for medically necessary and preventive care, but it also comes with its own exclusions.
Covered Services Under Part B:
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Doctor visits – Routine and specialist visits are included.
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Preventive care – Screenings, vaccinations, and wellness visits.
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Outpatient services – Includes X-rays, lab tests, and diagnostic procedures.
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Durable medical equipment (DME) – Covers wheelchairs, walkers, and oxygen supplies.
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Ambulance services – Covers emergency transport when other transportation isn’t safe.
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Mental health services – Includes outpatient counseling, therapy, and psychiatric evaluations.
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Certain cancer treatments – Covers chemotherapy, radiation, and some immunotherapy drugs.
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Emergency room visits – Covered if the services provided are deemed medically necessary.
What Medicare Part B Doesn’t Cover:
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Routine dental, vision, and hearing services
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Prescription drugs (except for certain outpatient medications)
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Long-term nursing home care
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Cosmetic surgeries or procedures
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Alternative medicine treatments like acupuncture (except for limited cases)
The Costs of Medicare Part A vs. Part B in 2025
Understanding costs is key to budgeting for healthcare in retirement. While Medicare covers many expenses, it is not entirely free, and the differences between Part A and Part B could significantly impact your wallet.
Medicare Part A Costs:
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Premiums – Most people qualify for premium-free Part A, but if you haven’t worked enough years, you may pay a premium.
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Deductible – In 2025, the hospital deductible is $1,676 per benefit period.
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Coinsurance – After 60 days in the hospital, you’ll owe daily coinsurance fees that increase the longer you stay.
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Skilled nursing facility care – Covered for the first 20 days, then daily coinsurance applies.
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Home health services – Covered with no coinsurance, but only under strict conditions.
Medicare Part B Costs:
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Premium – The standard premium for Part B in 2025 is $185 per month, though higher-income individuals may pay more.
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Deductible – The annual deductible is $257.
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Coinsurance – After meeting your deductible, you typically pay 20% of covered services.
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Outpatient mental health services – Covered at 20% coinsurance, similar to other services.
How Enrollment Works for Part A and Part B
Enrollment rules for Medicare Part A and Part B differ slightly, and missing deadlines could lead to penalties.
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Automatic Enrollment: If you’re already receiving Social Security benefits, you’re usually enrolled in both Part A and Part B automatically at age 65.
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Manual Enrollment: If you aren’t receiving Social Security benefits yet, you’ll need to sign up during your Initial Enrollment Period (IEP), which begins three months before your 65th birthday and lasts for seven months.
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Late Enrollment Penalties: If you delay signing up for Part B without qualifying for a Special Enrollment Period, you may face a lifelong penalty in the form of higher monthly premiums.
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Special Enrollment Periods (SEPs): If you have employer-based coverage past age 65, you may qualify for an SEP to avoid penalties.
How Part A and Part B Work Together
Many medical services require a combination of Part A and Part B. For example:
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If you need surgery, Part A covers the hospital stay while Part B covers the surgeon’s fees.
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If you have a hospital stay followed by rehab at a skilled nursing facility, Part A may cover the facility stay, while Part B covers certain rehabilitation services.
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If you receive chemotherapy, Part B covers the treatment while Part A may cover hospital stays if required.
Understanding how the two parts interact can help you avoid gaps in coverage and unexpected bills.
Why Understanding These Differences Matters
Failing to grasp the distinctions between Part A and Part B can lead to:
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Unexpected costs, especially when assuming a service is covered when it isn’t.
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Inadequate coverage if you rely on one part but ignore the other.
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Enrollment penalties that increase your long-term healthcare expenses.
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Confusion when accessing medical care, leading to unnecessary out-of-pocket expenses.
Making an Informed Decision About Your Medicare Coverage
Medicare is an essential program, but it comes with complexity. Knowing the key differences between Part A and Part B will help you plan for medical expenses, avoid unnecessary costs, and make better decisions about your coverage.
If you need guidance in choosing the right Medicare coverage, get in touch with a licensed agent listed on this website for professional advice.
