Key Takeaways

  • Medicare Part A may be premium-free for most, but ignoring it when you’re enrolled in the Postal Service Health Benefits (PSHB) Program could lead to denied claims, higher out-of-pocket costs, and missed coordination of benefits.

  • In 2025, PSHB is structured to work alongside Medicare. Not enrolling in Part A when you’re eligible can disrupt the cost-sharing and benefit structure of your PSHB coverage.

What Makes Part A Seem Optional

If you’ve paid Medicare taxes for at least 40 quarters, you likely qualify for premium-free Medicare Part A. Because it doesn’t cost anything out-of-pocket on a monthly basis, many assume they can delay or skip enrollment. Some even think that if they’re already enrolled in PSHB, there’s no need to bother with Part A at all.

But this assumption overlooks how PSHB is designed to coordinate with Medicare. Even though you might not feel the financial impact immediately, ignoring Part A can cause several costly issues over time.

The Role of Medicare Part A Within PSHB

Medicare Part A primarily covers inpatient hospital care, skilled nursing facility care (after a qualifying hospital stay), hospice care, and some home health services. When you have both PSHB and Medicare Part A, the two work together to reduce your costs and broaden your coverage.

In most cases, Medicare becomes the primary payer for inpatient hospital services once you’re eligible and enrolled. PSHB becomes the secondary payer, covering coinsurance, copayments, or services not fully paid by Medicare. But if you don’t enroll in Part A, PSHB is forced to pay as the primary insurer.

This disrupts how the system is structured, and in 2025, that has very real consequences.

What Happens If You Don’t Enroll in Part A

Failing to enroll in Medicare Part A once you’re eligible and retired can trigger the following outcomes:

1. Claims Denial or Delayed Reimbursement

Some PSHB plans are structured assuming Medicare is covering inpatient expenses first. If Medicare is not in place, your plan may delay or deny coverage for services that Medicare would have covered.

2. Higher Cost-Sharing From PSHB

Without Part A paying first, your PSHB plan pays as the primary insurer, which can lead to higher deductibles, copayments, or coinsurance. For inpatient hospital care, this could be hundreds or even thousands of dollars more per benefit period.

3. No Secondary Coverage for Part A-Eligible Services

Skilled nursing facility care, hospice care, and inpatient hospital stays are significantly more affordable when Medicare pays first. Without Medicare, your PSHB plan may limit how much it will cover or exclude certain services altogether.

4. Reduced Access to Certain Provider Networks

Some hospitals and facilities bill differently depending on whether Medicare is primary. Not having Part A can limit your access to facilities that would otherwise accept Medicare as primary coverage.

You May Be Required to Enroll Under PSHB Rules

As of January 1, 2025, Medicare-eligible annuitants and family members enrolled in PSHB are required to enroll in Medicare Part B to maintain full access to their PSHB coverage. While Part A isn’t mandatory in the same way, it is strongly encouraged because many of the plan designs presume that Medicare is primary for eligible services.

The practical impact is this: If you’re eligible for premium-free Part A and you choose not to enroll, your PSHB plan might not protect you the way it otherwise would.

Timeline of Eligibility: When Should You Enroll?

Medicare eligibility begins at age 65 for most individuals. Your Initial Enrollment Period (IEP) for Medicare is a 7-month window:

  • Begins 3 months before the month you turn 65

  • Includes your birth month

  • Ends 3 months after your birth month

If you’re retiring at 65 or later, you should aim to enroll in Part A as soon as your IEP opens. If you’re already retired and turning 65, delaying Part A can lead to the problems listed earlier.

For Postal retirees who are already past 65 but did not enroll, a Special Enrollment Period (SEP) was available in 2024, and if you missed that, you may now need to wait for the General Enrollment Period (GEP) from January 1 to March 31 each year, with coverage beginning in July. During that time, you’re left exposed.

Part A Is About More Than Cost

Even though you don’t pay a monthly premium if you qualify, Medicare Part A is not free in the broader sense. It has:

  • A $1,676 deductible per benefit period in 2025

  • Daily coinsurance starting after 60 days of inpatient care

  • Copayments for skilled nursing after 20 days

When Medicare is primary, your PSHB plan often helps with these costs. If you skip Part A, these expenses may shift entirely to you or your PSHB plan, which might not fully cover them.

How PSHB Plans Coordinate With Medicare

Here’s how coverage works when you’re enrolled in both PSHB and Medicare Part A:

  • Medicare pays first for inpatient services

  • PSHB pays second, covering out-of-pocket costs left by Medicare

  • You may see reduced or waived deductibles and copays in your PSHB plan

  • Your access to providers may improve due to Medicare participation

Some PSHB plans even reduce premiums or offer incentives when you’re enrolled in both Part A and Part B.

If You Delay Enrollment: Risks and Penalties

While Part A doesn’t come with late enrollment penalties for those eligible for premium-free coverage, delaying Part B does result in lifetime penalties. But Part A has its own issues even without formal penalties:

  • Delayed coverage: If you miss your IEP and don’t qualify for a SEP, you may be left without Medicare coverage for months.

  • Gaps in claims: Hospitals may bill PSHB assuming Medicare is involved. Without Part A, you could be responsible for charges you didn’t expect.

  • No retroactive protection: Even if you enroll later, Medicare only covers up to 6 months retroactively. Anything before that is not reimbursed.

How to Enroll in Medicare Part A

Enrollment in Part A is usually automatic if you’re collecting Social Security benefits. If not, you can:

  • Apply online through the Social Security Administration

  • Call or visit your local SSA office

  • Submit your application during your IEP to ensure timely coverage

It’s a one-time action that provides you a foundation of hospital coverage for the rest of your life.

Why You Shouldn’t Treat Part A as a Backup Plan

If you’re thinking you can always enroll later if needed, be cautious. Retroactive enrollment is limited, and your PSHB plan may not backpay claims assuming Medicare should have been in place. That can leave you responsible for large medical bills with no recourse.

Moreover, not enrolling at the right time could mean:

  • Missed savings from secondary coverage

  • Limited provider access

  • Reduced coordination for inpatient care

The Myth of Double Coverage

Some retirees worry that having both PSHB and Medicare is redundant. In reality, the two programs are complementary, not duplicative. You’re not paying twice for the same service. Instead:

  • Medicare sets the baseline payment

  • PSHB supplements it

  • You enjoy more complete protection

Skipping Part A doesn’t save you money. It often ends up costing you more, financially and administratively.

Getting the Timing and Coordination Right

If you’re already 65 or approaching it, review these steps:

  • Confirm your Medicare Part A eligibility (most qualify for premium-free)

  • Enroll during your IEP, even if you’re keeping PSHB

  • Coordinate with your PSHB plan to ensure proper claims handling

  • Keep both plans active to maximize coverage

PSHB is structured to integrate with Medicare, and opting out of that structure disrupts not only your benefits but also how your providers bill for care.

Don’t Let Part A Be an Afterthought

As the PSHB Program evolves in 2025, it expects you to treat Medicare as part of your healthcare foundation. Even though Part A doesn’t come with a monthly premium for most, its value goes far beyond price. It’s a critical piece of how your benefits function.

Failing to enroll can cost you peace of mind, delay medical care, or result in bills that would otherwise be covered. Don’t wait until a claim gets denied or a hospital stay gets expensive.

Your PSHB Benefits Rely on Smart Medicare Choices

The PSHB system in 2025 assumes that you’ll enroll in Medicare when eligible. If you’re already retired or planning to retire soon, Part A should not be overlooked just because it’s premium-free. Its role in your benefit coordination, claim processing, and cost protection is essential.

If you’re uncertain about your eligibility, enrollment timeline, or how your PSHB plan interacts with Medicare, get in touch with a licensed agent listed on this website. They can walk you through your options and help you avoid unexpected expenses.