Does Medicare Pay for a Hospital Stay?

Medicare plays a significant role in helping millions of Americans manage their healthcare expenses, particularly as they age. A common question for many individuals approaching or enrolled in the program revolves around coverage for hospital stays, and understanding these costs is important for financial planning and ensuring access to necessary medical care.

Medicare Part A Coverage for Inpatient Hospital Stays

Medicare Part A, often referred to as hospital insurance, is the component of Original Medicare that primarily covers inpatient hospital care. For coverage to apply, a doctor must formally admit an individual to the hospital with an official order stating the need for inpatient care to treat an illness or injury, and the hospital must accept Medicare. Part A covers essential services during an inpatient stay, including a semi-private room, meals, general nursing care, and administered medications. It also covers other medically necessary services and supplies, such as lab tests, X-rays, operating room use, and rehabilitation therapies.

Coverage under Medicare Part A is structured around “benefit periods.” A benefit period begins on the day a patient is admitted as an inpatient to a hospital or skilled nursing facility. This period ends after 60 consecutive days without inpatient hospital or skilled nursing facility care.

There is no limit to the number of benefit periods; a new period begins if another inpatient admission occurs after 60 days of discharge. Within each benefit period, Medicare Part A provides coverage for up to 90 days of inpatient hospital services. Beneficiaries also have a lifetime reserve of 60 extra days for stays beyond 90 days in a benefit period.

Understanding Financial Responsibilities for Inpatient Stays

While Medicare Part A covers a substantial portion of inpatient hospital costs, beneficiaries are responsible for certain out-of-pocket expenses. For each benefit period, individuals must pay a Part A deductible before Medicare begins to cover costs. In 2025, this inpatient hospital deductible is $1,676. This deductible covers the beneficiary’s share of costs for the first 60 days of Medicare-covered inpatient hospital care within that benefit period.

If a hospital stay extends beyond 60 days in a benefit period, coinsurance payments apply. For days 61 through 90, the daily coinsurance amount is $419 in 2025. If the inpatient stay continues beyond 90 days, beneficiaries can utilize their lifetime reserve days. For each of these lifetime reserve days (up to 60), the daily coinsurance is $838 in 2025. Once all 60 lifetime reserve days are exhausted, the beneficiary is responsible for all remaining costs of the hospital stay within that benefit period.

Certain items and services are not covered by Medicare Part A during a hospital stay, and these costs remain the patient’s responsibility. Examples include private duty nursing (one-on-one care). Personal convenience items, like a television or telephone, are also excluded. Private rooms are only covered if medically necessary.

The Difference Between Inpatient and Observation Status

A key distinction exists between “inpatient” and “observation status,” with significant financial implications. Even if a patient stays overnight in the hospital, observation status is considered an outpatient service. Observation services are covered under Medicare Part B, not Part A, affecting cost-sharing.

For services received under observation status, beneficiaries are responsible for the Medicare Part B annual deductible, which is $257 in 2025. After meeting this deductible, a 20% coinsurance applies to all Medicare-approved services received during the observation stay. This can lead to multiple copayments, potentially exceeding Part A inpatient costs. Medications administered during an observation stay may not be covered by Part B, possibly requiring beneficiaries to use their Medicare Part D plan or pay out-of-pocket.

The distinction between inpatient and observation status also impacts coverage for a skilled nursing facility (SNF) stay. Medicare Part A requires a prior inpatient hospital stay of at least three consecutive days for SNF coverage to apply. Time spent under observation status does not count toward this three-day inpatient stay requirement. If discharged from observation to an SNF, patients may be responsible for the full SNF cost unless they have other coverage.

How Other Medicare Plans Affect Hospital Stay Coverage

Beyond Original Medicare, beneficiaries can choose other types of plans that impact hospital stay coverage and associated costs. Medicare Advantage Plans, also known as Part C, are offered by private insurance companies approved by Medicare and replace Original Medicare. These plans must cover at least the same services as Original Medicare, including inpatient hospital care. However, they often have different cost-sharing structures, such as copayments, deductibles, or coinsurance for hospital stays. Many plans may also require prior authorization for hospital admissions or have specific provider networks, affecting coverage or cost.

Medicare Supplement Insurance, or Medigap policies, complement Original Medicare, rather than replacing it. These plans are sold by private companies and help cover out-of-pocket costs not covered by Original Medicare, such as deductibles, copayments, and coinsurance. For hospital stays, Medigap policies can help pay the Part A deductible and the coinsurance amounts for days 61-90 and lifetime reserve days. Some Medigap plans even offer coverage for an additional 365 days of inpatient hospital care after Original Medicare benefits are exhausted. Beneficiaries pay their Medicare Part B premium plus the Medigap policy premiums.