Medicare Part A Explained: Eligibility, Costs, Coverage, and Why It Matters in 2025
If you’re approaching age 65, understanding Medicare—especially Part A—is essential. It’s the foundation of your health coverage in retirement, and making smart decisions now can save you thousands later. Here’s what you need to know about Medicare Part A in 2025.
What Does Medicare Part A Cover?
Part A is hospital insurance. It covers inpatient hospital stays, skilled nursing facility care, hospice services, and some forms of home health care. Unlike Part B, which is for outpatient visits, Part A kicks in when you’re formally admitted to the hospital. But beware: observation stays (where you’re technically outpatient) are not covered the same way. You must be admitted for three full days to qualify for skilled nursing care afterward.
How Do You Qualify for Premium-Free Part A?
You earn Medicare credits through work, with 40 quarters (or 10 years) of paying FICA taxes granting you premium-free coverage. In 2025, each quarter is defined as earning at least $1,810. If you haven’t worked enough, you might qualify through a spouse—either current (married at least one year) or former (married for 10+ years and divorced). High-income earners—those earning over $200,000 single or $250,000 jointly—will also pay an additional 0.90% Medicare surtax on income over those thresholds.
What If You’re Still Working?
You may choose to delay Medicare Part A if you’re still working and covered under an employer plan with 20+ employees, especially if you’re contributing to a Health Savings Account (HSA). Starting Part A automatically stops your ability to contribute to an HSA, so coordination matters. However, if you’re on COBRA, ACA, or TriCare, you must enroll in Part A and B when eligible to avoid penalties.
What Are the Costs If You Don’t Qualify for Free Part A?
If you only have 30–39 quarters of Medicare-covered employment, you’ll pay $285/month for Part A. Fewer than 30 quarters? The premium jumps to $515/month. On top of that, a 10% penalty is added for each year you delay enrollment without credible coverage, and that penalty sticks around for double the number of years you delayed.
What About Out-of-Pocket Costs?
Even with Part A, you’re still responsible for some costs. The 2025 hospital deductible is $1,676 per benefit period. If your stay extends beyond 60 days, you’ll pay $419 per day up to day 90, then $838/day from day 91–150 (using your “lifetime reserve days”).
How Can Medigap Plans Help?
This is where Medigap, or supplemental insurance, becomes crucial. These policies cover the “gaps” in Part A—like deductibles and hospital costs after 150 days. Plan F was the gold standard, covering every out-of-pocket cost, but it’s no longer available to new enrollees. Plan G now leads the pack, offering nearly full coverage minus the $257 annual Part B deductible. Plan N offers lower premiums but includes small co-pays and doesn’t cover Part B excess charges. For many, Plan G strikes the best balance between cost and comprehensive coverage.
What Should You Do Next?
Start planning before your 65th birthday. Know whether you qualify for premium-free Part A, how it fits into your current health coverage, and whether a Medigap plan makes sense for your needs. Medicare isn’t one-size-fits-all—and in 2025, being informed means being protected.
