Medicare Part A Isn’t a One-Size-Fits-All Solution—Especially with PSHB in the Picture

Key Takeaways

• Medicare Part A may appear standard, but when paired with the Postal Service Health Benefits (PSHB) program in 2025, its effectiveness varies significantly depending on your circumstances.

• Understanding where PSHB overlaps with, enhances, or diverges from Medicare Part A is essential to avoid duplicate coverage, unexpected expenses, or missed benefits.

Why Medicare Part A Seems Straightforward—But Isn’t

Medicare Part A is commonly referred to as hospital insurance. Most people assume it will fully cover inpatient care without any additional requirements. However, that assumption can be misleading.

Part A covers:

• Inpatient hospital stays

• Skilled nursing facility care (under certain conditions)

• Hospice care

• Some home health services

In 2025, if you worked at least 40 quarters under Medicare-covered employment, you generally pay no premium for Part A. But no-premium doesn’t mean no cost. Deductibles and coinsurance still apply.

With the transition to the Postal Service Health Benefits (PSHB) Program in full effect in 2025, understanding how your PSHB coverage interacts with Medicare Part A is critical. The two don’t automatically align in a way that fits everyone’s health or financial needs.

PSHB in 2025: A New Layer of Complexity

As of January 1, 2025, the PSHB program has officially replaced FEHB for USPS employees, annuitants, and their family members. This new system brings with it some key rules and expectations, especially for those eligible for Medicare.

Most notably:

• If you are a Medicare-eligible annuitant or a Medicare-eligible family member, you are required to enroll in Medicare Part B to remain enrolled in a PSHB plan, unless you meet one of the limited exemptions.

• While Medicare Part A enrollment is not mandatory, it is strongly encouraged because of how it coordinates with your PSHB benefits.

This means you can no longer view Medicare Part A in isolation. Whether you should enroll, and how it impacts your out-of-pocket costs, depends on how your PSHB plan processes claims when Medicare is involved.

What Medicare Part A Actually Leaves Out

Despite being hospital coverage, Medicare Part A has significant limitations, especially in 2025:

• Inpatient Deductible: The deductible is $1,676 per benefit period.

• Coinsurance: After 60 days in the hospital, you owe $419 per day. After 90 days, the cost jumps to $838 per day.

• Skilled Nursing Facility Care: Covered only after a qualifying 3-day inpatient stay and only up to 100 days, with daily coinsurance starting after day 20.

These are not small gaps. Without coordination from another plan like PSHB, these costs can add up quickly.

How PSHB Plans Fill Some Gaps

Many PSHB plans coordinate benefits with Medicare, especially for enrollees who have both Part A and Part B. If you only enroll in Part A, your PSHB plan may become the secondary payer for inpatient care, which could still save you money, depending on how the plan structures its cost-sharing.

In most PSHB plans:

• The Medicare-approved amount is paid first.

• The PSHB plan may cover the remaining costs, such as coinsurance or deductibles, either in full or in part.

• If you decline Part B, you may lose access to certain premium savings or cost-sharing benefits that are only available when Medicare is primary.

Again, this varies by plan. The PSHB program doesn’t use a one-size-fits-all structure, so reading the plan brochure is essential.

Timing Rules You Cannot Afford to Ignore

If you’re nearing age 65 or already Medicare-eligible, timing your enrollment into Medicare matters. Here are the 2025 timelines that apply to PSHB participants:

• Initial Enrollment Period (IEP): This spans 7 months (3 months before, the month of, and 3 months after your 65th birthday).

• Special Enrollment Period (SEP): For USPS retirees transitioning into Medicare Part B under the PSHB requirement, the official SEP ended in September 2024. If you missed it, you may now face penalties and delayed coverage.

• General Enrollment Period (GEP): Runs from January 1 to March 31 annually. Coverage starts in July and may carry late penalties.

Failing to enroll in time can lead to:

• Gaps in coverage

• Higher monthly premiums due to lifetime penalties

• Ineligibility for full PSHB benefits that require both Part A and Part B

Medicare Part A Doesn’t Cover These Essential Services

Another reason Part A may not meet all your needs is that it does not cover:

• Outpatient care (doctor visits, diagnostic tests)

• Preventive screenings (like mammograms or colonoscopies)

• Durable medical equipment (unless used during an inpatient stay)

• Most home health services without a qualifying hospitalization

• Prescription drugs outside hospice care

If you’re counting on Medicare Part A alone to pair with your PSHB plan, you may be underinsured for these services unless your PSHB plan picks up those gaps or you enroll in Part B.

PSHB and Part A Coordination Examples

Here’s how Medicare Part A might work with PSHB:

• Inpatient hospital stay: Medicare Part A pays first, PSHB may cover the deductible and coinsurance.

• Skilled nursing care: After the Medicare coverage limit, PSHB may or may not cover additional days, depending on the plan.

• Hospice care: Generally covered by Medicare Part A. PSHB may not add much here, but you should confirm with your plan.

If you lack Part B, your PSHB plan becomes the primary payer for outpatient care, which could increase your cost-sharing, depending on the plan design.

What Happens If You Decline Part A

If you choose not to enroll in Medicare Part A, here’s what happens:

• You remain fully dependent on PSHB for hospital-related costs.

• Your PSHB plan becomes the primary payer, which could lead to higher copayments or coinsurance for inpatient services.

• You may forfeit the benefits of automatic coordination between Medicare and your PSHB plan.

You cannot be forced to enroll in Part A, but declining it may reduce the financial protection available to you, particularly for hospitalization.

Medicare Enrollment Does Not Replace PSHB

It’s important to understand that enrolling in Medicare Part A (or even Part B) does not replace your PSHB coverage. Instead, it complements it. Medicare becomes the primary payer, and your PSHB plan becomes secondary.

You will still:

• Pay your PSHB premiums (unless the plan provides a reimbursement benefit when paired with Medicare)

• Receive additional benefits that Medicare does not cover, including dental, vision, and international emergency coverage in some cases

This dual coverage often means reduced out-of-pocket costs and enhanced protection, but only if you are enrolled correctly and within the designated timeline.

Additional Considerations for Medicare-Eligible Annuitants

If you’re a USPS annuitant and Medicare-eligible in 2025:

• Not enrolling in Medicare Part B could cause your PSHB plan to deny certain claims or shift you to a limited-benefit tier.

• Enrolling in both Part A and Part B allows your PSHB plan to coordinate benefits in full and may reduce your out-of-pocket exposure.

• The requirement to enroll in Part B applies unless you qualify for an exemption, such as retiring on or before January 1, 2025, or being age 64 or older on that date.

Reviewing Your Plan Matters Every Year

Each PSHB plan publishes an official brochure annually. You should review this document every Open Season (November to December) because:

• Benefits, cost-sharing, and coordination rules may change.

• Some plans offer additional incentives for Medicare enrollees.

• Plan networks and formularies may shift, affecting access to care.

Failing to review your plan annually could result in surprise costs or missed opportunities to enhance your coverage.

Getting It Right with PSHB and Medicare

Making Medicare Part A work for you under PSHB requires:

• Knowing your eligibility and enrollment windows

• Understanding what Medicare Part A does and doesn’t cover

• Reading your PSHB plan’s coordination of benefits rules

• Enrolling in Medicare Part B (unless exempt)

A well-coordinated combination of Medicare and PSHB can give you stronger financial protection and broader coverage. But if misunderstood or mistimed, you may face penalties, excess charges, or inadequate care access.

Make the Most of Your PSHB and Medicare Coverage

You don’t have to figure this out alone. Whether you’re approaching Medicare eligibility or already enrolled, it’s worth speaking with a licensed agent listed on this website. They can explain how your specific PSHB plan interacts with Medicare Part A and Part B, and whether any exemptions or savings apply to your situation.

It’s never too early to clarify your position. In a system as complex as PSHB and Medicare, early decisions often define long-term costs and coverage.