Personal Finance & Estate › Medicare, Medi-Cal & long-term care › Medicare (federal health insurance at 65+)
Medicare Part A (hospital)
Since 1966· Government program
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
Medicare's hospital insurance: inpatient stays, short skilled-nursing stays after a hospital admission, hospice and some home health care.
See it on the Personal Finance & Estate map →How it works
Premium-free for anyone with 10 years (40 quarters) of Medicare-taxed work, personally or through a spouse; others can buy in for up to $565 a month. Each hospital 'benefit period' carries a $1,736 deductible in 2026, then daily copays after day 60. Skilled nursing is covered only after a 3-day inpatient stay: days 1–20 free, days 21–100 at $217 a day. Main trap: time spent 'under observation' is outpatient and doesn't count toward those 3 days. Ask the hospital which status applies.
Why it matters for you
It pays the big hospital bills for nearly everyone 65 and older, but its narrow skilled-nursing benefit is where many families first learn Medicare doesn't cover long-term care.
Think of it like
Like a property policy that pays for the fire but never for routine upkeep: acute hospital care yes, ongoing daily care no.
Rules, limits and sources (2026)
Rules and 2026 amounts come from CMS's yearly fact sheet and the 'Medicare & You' handbook; the Medicare Trustees report on the trust fund every year.
Watch out for
The 2025 Trustees Report projected the Part A trust fund would run dry in 2033, leaving about 89% of costs payable; Congress's fix is undecided.
Connections (4)
▸Medicare Part A (hospital) is the hospital part of Medicare (federal health insurance at 65+)Law or rule (2026)
How they connect
Part A was one of Medicare's two original parts: hospital insurance, financed mainly by payroll taxes paid into the Hospital Insurance trust fund. With Part B it forms 'Original Medicare'. People already collecting Social Security get it automatically at 65, and it remains the base even inside a Medicare Advantage plan.
When it applies
Signed by President Johnson on July 30, 1965, in Independence, Missouri, with Harry Truman present; benefits began July 1, 1966.
The rule
Title XVIII of the Social Security Act, Part A (Sec. 1811 onward); CMS and the Trustees Reports track it separately.
Watch out for
Whether hospital 'observation' days should count toward Part A's skilled-nursing benefit is a long fight; courts ordered appeal rights for some patients in the 2020s.
▸Health savings account (HSA) vs. use-it-or-lose-it FSA can't take new contributions once you're covered by Medicare Part A (hospital)Watch out
How they connect
You can't contribute to an HSA once enrolled in any part of Medicare, and claiming Social Security after 65 enrolls you in Part A automatically. Part A is backdated up to six months (not before 65), so stop contributions six months before applying, or excess contributions face a 6% yearly tax. Existing balances stay spendable.
When it applies
Hits anyone working past 65 with an HSA, typically when they sign up for Medicare or start Social Security.
How sure?
IRC Sec. 223(b)(7) ends eligibility at Medicare entitlement; SSA and IRS Publication 969 describe the retroactive Part A coverage.
Watch out for
Bills to let working seniors on Part A keep contributing have been introduced in Congress repeatedly without passing.
▸FICA & self-employment tax (Social Security & Medicare) funds Medicare Part A (hospital)Law or rule (2026)
How they connect
Part A runs mainly on the Medicare payroll tax: 1.45% each from employee and employer on all wages, or 2.9% for the self-employed, with no wage cap, plus 0.9% on wages above $200,000 single or $250,000 joint. Ten years of paying it earns premium-free Part A. The 3.8% investment-income tax goes to the general fund instead.
When it applies
The hospital insurance tax began in 1966 at 0.35% each; the wage cap was removed in 1994 and the 0.9% surtax added in 2013.
The rule
IRC Sec. 3101(b) and 1401(b); Medicare Trustees Reports show payroll taxes supply most Hospital Insurance trust fund income.
Watch out for
Proposals to steer the 3.8% net investment income tax into the Part A trust fund have been made but not enacted.
▸Long-term care (custodial care Medicare won't pay) is mostly not covered by Medicare Part A (hospital)Watch out
How they connect
Long-term care mostly means custodial help, such as bathing, dressing and dementia supervision, which Medicare excludes. Part A pays only for skilled nursing or rehab after a 3-day inpatient stay, up to 100 days, with a $217 daily copay after day 20 in 2026. Hospice and short home health visits are covered; years of daily care are not.
When it applies
Medicare's custodial-care exclusion dates to the 1965 law; Medicaid, created alongside it, became the main public payer for nursing homes.
How sure?
Social Security Act Sec. 1862(a)(9) excludes custodial care; CMS's 'Medicare & You' handbook says Medicare doesn't cover long-term care.
Watch out for
How strictly 'skilled' care is judged is still contested; a 2013 settlement (Jimmo) said coverage can't require that a patient improve.