Medicare Part A is paid for through payroll taxes during your working years, and then covered by Medicare once you turn 65

You do not pay a monthly premium for Medicare Part A if you or your spouse paid Medicare taxes for at least 10 years while working. The federal government covers the cost through the Hospital Insurance Trust Fund, which is financed by the 2.9% payroll tax that comes out of your paychecks (your employer pays half, you pay half). Once you reach 65 and enroll, Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services — you pay nothing for the insurance itself, though you will have a deductible when you use it.

If you do not have 10 years of work history under your name or your spouse's name, you can still get Part A, but you will pay a monthly premium. That premium varies depending on how many quarters of coverage you do have. The amount changes each year, so the exact dollar figure depends on when you turn 65 and enroll.

Key Takeaways

  • Part A is free at 65 if you or your spouse paid Medicare taxes for at least 10 years while working in the United States.
  • If you have fewer than 10 years of work history, you can still enroll in Part A but will pay a monthly premium that depends on how many quarters of coverage you have.
  • The payroll tax that funds Part A is 2.9% of wages, split between you and your employer, and is taken from your paychecks while you work.
  • Part A covers hospital stays and related care, but you will owe a deductible each time you are admitted to the hospital.

How the Payroll Tax Funds Part A

The Medicare Part A tax is part of the Federal Insurance Contributions Act (FICA) tax you see on your pay stub. It is labeled as "Medicare" or "HI" (Hospital Insurance). You pay 1.45% of your wages, and your employer pays another 1.45%, for a total of 2.9%. This tax has been collected since 1966 and goes into a trust fund that pays for hospital care for everyone on Medicare.

Self-employed people pay both halves themselves — 2.9% of their net self-employment income — when they file their taxes. The IRS tracks how many quarters of coverage you accumulate. A quarter is any three-month period in which you earned at least a certain amount of income (the threshold changes yearly). You need 40 quarters — roughly 10 years of work — to may have access to for free Part A at 65.

When You Pay a Premium for Part A

If you have worked fewer than 10 years, you will owe a monthly premium for Part A. The amount depends on how many quarters of coverage you have. Someone with 30 quarters of coverage pays less than someone with 20 quarters. The exact premium amount is set by Medicare each year and changes on January 1.

You can also choose to buy Part A even if you are not yet 65, as long as you are at least 60 years old and a U.S. citizen or permanent resident. Some people do this if they are not yet on Social Security but want hospital coverage. The premium for Part A when you buy it before 65 is higher than the premium for people who did not work long enough to may have access to for free Part A at 65.

The Difference Between the Premium and the Deductible

The premium is what you pay each month for the insurance itself. For Part A, that is zero dollars if you have 10 years of work history. The deductible is what you pay out of your pocket when you actually use the hospital.

In 2024, the Part A deductible is $1,632 per hospital stay. That means the first $1,632 of your hospital bill is your responsibility. After you meet the deductible, Medicare covers all approved hospital costs for the first 60 days of a stay. Days 61 through 90 have a daily copay, and days 91 and beyond have a higher daily copay. These amounts change each year. The deductible resets if you go 60 days without a hospital stay.

What Happens If You Do Not Have Enough Work History

If you reach 65 and have fewer than 30 quarters of coverage, you can still enroll in Part A by paying a premium. You will also need to enroll in Part B (medical insurance) at the same time. This is different from people who have 10 or more years of work history — they can enroll in Part A alone without Part B.

If you have between 30 and 40 quarters of coverage, you pay a reduced premium. The premium is highest for people with fewer than 30 quarters. You can work longer to increase your quarters of coverage and lower your premium, or you can enroll at 65 and pay the premium. There is no penalty for waiting to enroll after 65 if you do not have enough work history, but you should enroll during your initial enrollment window to avoid late-enrollment penalties on Part B.

Spousal and Survivor Coverage

If your spouse worked and paid Medicare taxes for 10 years, you may be able to get free Part A based on their work history instead of your own. You must be at least 62 years old and married to them (or divorced from them if the marriage lasted at least 10 years). You do not need to have worked yourself, and your spouse does not need to have enrolled in Medicare yet.

Survivors can also receive Part A coverage based on a deceased worker's record. If someone dies and had 10 years of work history, their widow or widower, children under 19 (or 23 if in school), and parents age 62 or older may be able to enroll in Part A for free. The rules vary, so contact Social Security to find out whether you may have access to based on a family member's record.

How to Check Your Work History and Quarters of Coverage

You can see how many quarters of coverage you have by creating an account on ssa.gov and viewing your Social Security Statement. The statement shows your earnings history year by year and tells you how many quarters you have earned. You can also call Social Security at 1-800-772-1213 to ask about your quarters of coverage.

It is a good idea to check this before you turn 65, especially if you have worked in multiple states or had periods of self-employment. Mistakes on your record can be corrected, but it takes time. If you find an error, you will need to provide documentation like old tax returns or W-2 forms to Social Security to fix it.

Frequently Asked Questions

Do I have to pay for Part A if I worked 10 years?

No. If you or your spouse paid Medicare taxes for at least 10 years while working, Part A is free when you turn 65. You will have a deductible when you use hospital services, but there is no monthly premium for the insurance itself.

What if I worked part-time or had gaps in employment?

Part-time work counts toward your quarters of coverage as long as you earned enough in that quarter. Gaps in employment do not erase quarters you already earned. You need 40 quarters total, but they do not have to be consecutive. Check your Social Security Statement to see exactly how many quarters you have.

Can I get Part A if I am not a U.S. citizen?

You must be a U.S. citizen or permanent resident to enroll in Medicare Part A. If you are a permanent resident, you need to have lived in the United States for at least five years. Undocumented immigrants are not may be able to access for Medicare.

What if I am still working at 65 — do I still have to pay the Part A tax?

Yes. The Medicare payroll tax continues to come out of your paychecks no matter how old you are, as long as you are working and earning wages. This tax funds Part A for current retirees. You can enroll in Medicare at 65 even if you are still working, though you may want to delay Part B enrollment if your employer offers health insurance.

Does Part A cover everything in the hospital?

Part A covers hospital room and board, meals, nursing care, and most hospital services. It does not cover private duty nursing, a private room (unless medically necessary), or items like a telephone or television. After you meet your deductible, Medicare covers approved hospital costs, but you are responsible for any services that Medicare does not deem medically necessary.