What’s the Difference Between Medicare A and B?

What is Medicare Part A?

Medicare Part A is commonly known as hospital insurance and is a foundational component of Original Medicare. Its primary role is to cover inpatient care costs, including hospital stays, skilled nursing facility care, hospice services, and specific home health care services. When admitted to a hospital as an inpatient, Part A assists with expenses such as room and board, meals, routine nursing care, and medically necessary procedures. Importantly, Part A also covers hospice care for individuals diagnosed with a terminal illness and expected to live six months or less, emphasizing comfort-focused care over curative treatments.

Additionally, Medicare Part A supports eligible home health care services, enabling medically necessary therapies or assistance to be provided at home following a qualifying hospital stay. Coverage also extends to skilled nursing facility stays when specific conditions are met, usually following at least a three-day inpatient admission.

However, it’s important to recognize the limitations: Part A does not cover the first three pints of blood needed, private-duty nursing, or a private room (unless medically required). Most notably, if a patient is placed “under observation” in the hospital rather than formally admitted as an inpatient, Part A coverage does not apply-this distinction can impact your final billing and coverage.

What is Medicare Part B?

Unlike Part A, Medicare Part B is medical insurance focused on outpatient care and preventive services. It helps pay for doctor visits, mental health counseling, outpatient medical procedures, clinical research participation, medical supplies, and durable medical equipment such as walkers and wheelchairs. Preventive services under Part B include mammograms, flu shots, colonoscopies, diabetes screenings, and annual wellness visits aimed at early detection and prevention.

Part B also covers outpatient therapy, such as physical therapy, occupational therapy, and speech-language pathology, when prescribed by a provider. Some outpatient prescription medications (e.g., certain cancer drugs, immunosuppressives) and supplies like diabetic testing equipment and nebulizers fall under Part B.

Enrollment in Part B is optional but highly recommended because it dramatically broadens your access to necessary medical care and preventive services. You’ll need to pay a monthly premium and an annual deductible before Medicare reimbursement starts. Medicare then covers about 80% of allowable charges for covered services, while beneficiaries typically are responsible for around 20% coinsurance.

Key Differences in Coverage

Aspect	Part A	Part B
Coverage Type	Hospital, skilled nursing, hospice, home health (inpatient focus)	Outpatient medical, preventive, and some home health services
Coverage Examples	Hospital care, skilled nursing facility stays, hospice, limited home health care	Doctor visits, diagnostic services, outpatient therapy, durable medical equipment
Enrollment Process	Automatic for most, depending on Social Security status	Active enrollment required
When Coverage Begins	Month you turn 65 (if enrolled timely)	Month after qualifying enrollment

Another significant Medicare coverage difference is that Part A focuses strictly on inpatient and facility-based care, while Part B encompasses a broad array of outpatient and preventive health needs. Understanding your status as an inpatient or outpatient is critical, as this determines whether Part A or Part B pays for your care and can dramatically affect your out-of-pocket costs.

Cost Comparison: Premiums, Deductibles, and Coinsurance

Medicare Part A Costs in 2025

For most beneficiaries, Part A comes with a $0 monthly premium-provided you or your spouse worked and paid Medicare taxes for at least 40 quarters (10 years). If not, the premium for 2025 is tiered:

• $0: 40+ quarters of Medicare-covered employment
• $285/month: 30-39 quarters
• $518/month: Fewer than 30 quarters

Other out-of-pocket costs include:

• Deductible: $1,676 per benefit period (per hospitalization)
• Coinsurance for hospital stays:
  • Days 1-60: $0 coinsurance per day
  • Days 61-90: $419 per day
  • Days 91 and beyond: $838 per “lifetime reserve day” (up to 60 days over lifetime)
• Skilled nursing facility care: First 20 days are $0, then $208 per day for days 21-100 (2025 figures)
• No coinsurance or copay for hospice and eligible home health care

For an in-depth look at the 2025 billing structure, see our Medicare Billing Guide for 2025.

Medicare Part B Costs in 2025

Part B always requires a premium, even for those with an extensive Medicare tax record. The standard monthly premium is $185 in 2025, though higher-income individuals (annual income above $106,000 for singles, $212,000 for couples) pay more-up to a maximum of $628.90 per month.

• Annual deductible: $257
• Coinsurance: 20% of Medicare-approved amounts for most covered services after the deductible

These costs can be substantial if you require frequent outpatient services, which is why many choose to augment Original Medicare with supplemental insurance. For more on how to protect yourself from high out-of-pocket expenses, consult our advice on when to get Medicare supplemental insurance.

Eligibility and Enrollment: Who Qualifies and How to Sign Up

Medicare Eligibility Criteria

• Individuals age 65 or older who are U.S. citizens or lawful permanent residents (at least 5 years residency)
• Younger people receiving Social Security disability benefits for 24+ months
• People diagnosed with End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s Disease)

Generally, most become eligible for premium-free Part A automatically if they or their spouse have a qualifying work history and are already collecting Social Security or Railroad Retirement Board benefits. However, Part B enrollment always requires an active application, unless you’re automatically enrolled by virtue of receiving Social Security benefits four months before your 65th birthday.

Medicare Enrollment Periods

• Initial Enrollment Period (IEP): 7 months (3 months before, the month of, and 3 months after your 65th birthday)
• General Enrollment Period (GEP): January 1-March 31 each year (coverage begins July 1; possible late enrollment penalties)
• Special Enrollment Periods (SEP): If you’re covered through a qualified group health plan from an employer or union, or under other special circumstances

Timely enrollment is critical: missing your IEP and enrolling later (unless you qualify for a SEP) results in permanent late penalties, especially for Part B. For questions on when and how to sign up, or which forms apply to your unique status, check current CMS documentation or contact Social Security directly.

How to Enroll in Medicare

Most people enroll via the Social Security Administration, which handles applications for both Medicare Part A and Part B. Enrollment can be completed online, by phone, or in-person at your local office. For those working past age 65 with employer health coverage and looking to enroll later, special forms such as CMS-40B (to sign up for Part B) and CMS-L564 (employment verification) are required.

Late Enrollment Penalties

The consequences for delayed enrollment in Medicare can be significant. If you do not sign up for Part B (or Part A if you must pay a premium) when first eligible and do not have qualifying coverage, your monthly premium will permanently increase (for Part B, it’s 10% more for every 12-month period missed). Avoid this common pitfall by understanding your eligibility and opportunities for special enrollment.

Prescription Drug Coverage and Why You Need Part D

Neither Medicare Part A nor Part B covers most prescription medications. For substantial savings on prescriptions, you’ll need to enroll in Medicare Part D, which provides prescription drug coverage through private insurers. You can do this during your Initial Enrollment Period or at their Annual Enrollment Period (October 15 – December 7 each year).

Failure to enroll in Part D when first eligible, and lacking “creditable coverage” elsewhere, triggers a late enrollment penalty added to your monthly premium for as long as you maintain Part D.

If you’re in California, our Medicare Part D Plans California 2026 Overview explains options specific to your area, plan differences, and how to minimize drug costs.

What Medicare Part A and B Don’t Cover

Original Medicare leaves notable gaps in coverage, including:

• Routine vision care, glasses, and contact lenses
• Hearing aids and exams
• Dental work (cleanings, fillings, extractions)
• Routine foot care
• Cosmetic procedures

If these areas are important to you, consider enrolling in a Medicare Advantage plan (Part C), which may include extra benefits. Also, if you’re interested in coverage for medical alert systems, our guide to Medicare coverage for medical alert systems in 2025 is a valuable resource.

Frequently Asked Questions

• Is Medicare Part B free at age 65?
  No. While most are eligible at age 65, you must pay a monthly premium (standard $185 in 2025) and an annual deductible before Medicare pays benefits.
• Can I delay Part B enrollment?
  It’s possible to delay enrollment if covered under an employer’s group health plan, but without other creditable coverage, you’ll face a significant late penalty.
• What’s the difference between Original Medicare and Medicare Advantage?
  Original Medicare (Parts A and B) is government-managed, while Medicare Advantage (Part C) is private and usually includes additional benefits (prescription, vision, dental). For more on Medicare arrangements when involved in legal claims, our article What Is a Medicare Lien? Personal Injury Settlement Facts covers a unique aspect of Medicare coverage.
• When does Part A coverage begin?
  If you enroll on time, coverage starts the month you turn 65. Late enrollment may affect your start date or premium-free status.
• Do I need both Part A and Part B?
  Having both is recommended for comprehensive coverage, addressing both hospital and outpatient care needs. Without Part B, you’re left paying out-of-pocket for most outpatient services and preventive care.