Key Takeaways

  • Medicare Part A covers a substantial portion of hospital-related expenses, but it does not cover everything. You may still be responsible for thousands in out-of-pocket costs without supplemental protection.

  • If you’re enrolled in the Postal Service Health Benefits (PSHB) Program, coordinating your PSHB plan with Medicare Part A (and Part B) is crucial to minimizing unexpected expenses and ensuring full coverage.

What Medicare Part A Really Covers

Medicare Part A primarily handles inpatient hospital services. This includes services like:

  • Semi-private rooms

  • Meals and nursing services

  • Inpatient care in hospitals, skilled nursing facilities, and some home health care

  • Hospice care for terminally ill patients

While this sounds extensive, it is not comprehensive. The program has strict limits and cost-sharing obligations that you must consider.

Duration of Coverage Limits

Medicare Part A covers inpatient hospital stays in benefit periods. A benefit period starts the day you are admitted and ends after you have not received inpatient hospital or skilled nursing facility care for 60 days in a row.

Each benefit period comes with a deductible and cost-sharing that escalates the longer you stay. In 2025, you pay:

  • $1,676 deductible per benefit period

  • $0 for days 1-60

  • $419 per day for days 61-90

  • $838 per day for days 91-150 (lifetime reserve days)

  • All costs after day 150

This structure means that a long hospital stay or multiple admissions within the same year could leave you facing thousands in uncovered charges.

Common Gaps That Can Surprise You

The most dangerous assumption is thinking Medicare Part A will cover everything related to hospitalization. Here are areas where gaps often arise:

1. Observation Status Instead of Admission

Hospitals sometimes classify patients as being under “observation” rather than admitting them, even if they stay overnight. Medicare Part A only covers actual inpatient stays. Observation care falls under Medicare Part B, which can mean different deductibles and copayments—and for those without Part B, it may mean no coverage at all.

2. Skilled Nursing Facility Coverage Rules

Part A only covers skilled nursing care if you have a qualifying inpatient hospital stay of at least three days. If you don’t meet that threshold or if your care is considered custodial, you could be billed directly.

Even if you qualify:

  • Days 1-20 are covered in full

  • Days 21-100 require a copayment of $209.50 per day in 2025

  • All costs after 100 days are your responsibility

3. Not Covered: Personal Comfort Items and Long-Term Custodial Care

Services like private rooms (unless medically necessary), TVs, phone charges, and long-term stays for help with daily tasks (bathing, dressing) are not covered under Part A.

4. Hospital Readmissions

Multiple hospitalizations within a year can each trigger a new benefit period. If readmitted after 60 days, you’re responsible for another $1,676 deductible and all subsequent cost-sharing. These costs can add up quickly.

How PSHB Fits into the Picture

As a Postal Service annuitant or employee, you’re now enrolled in the PSHB Program starting in 2025. This program is separate from FEHB and specifically tailored for postal workers. Understanding how PSHB works with Medicare is essential to protecting your finances.

Integration with Medicare

Most PSHB plans are designed to coordinate with Medicare. If you are Medicare-eligible and enrolled in both Part A and Part B:

  • Your PSHB plan becomes secondary

  • It pays for costs not covered by Medicare, such as coinsurance and deductibles

  • You may receive reduced copayments and lower out-of-pocket spending

Some PSHB plans also waive certain costs if you’re enrolled in Medicare Part B, making it more beneficial to coordinate both.

What Happens If You Skip Part B?

If you rely only on Part A and your PSHB plan, your plan becomes your primary insurer. But this often means:

  • Higher out-of-pocket costs

  • No coordination of benefits to absorb what Part B would have paid

  • Potential loss of prescription drug coverage integration

For most PSHB enrollees aged 65 and older, enrolling in both Part A and Part B is the more cost-effective and protective approach.

Hidden Costs You Might Not Expect

Even with Part A and a PSHB plan, several expenses can still catch you off guard:

1. Blood Transfusions

The first three pints of blood are not fully covered under Medicare Part A. You’re responsible for their cost unless your hospital gets them from a blood bank.

2. Mental Health Hospitalization

Part A does cover mental health hospital care, but there’s a 190-day lifetime limit for stays in a psychiatric facility that’s not part of a general hospital. After that, you must cover the full cost.

3. Non-Hospital Facility Charges

Hospitals often bill separately for lab tests, imaging, or physician services. These may fall under Medicare Part B or your PSHB plan, and the split in coverage can be confusing and costly without both in place.

4. Ambulance Transportation

Ambulance rides are typically not covered under Part A unless they occur during a covered hospital stay. Otherwise, this falls under Part B, or it may be billed directly to you if Part B is missing.

Why Timing and Enrollment Choices Matter

Your decisions at age 65 and beyond can make a dramatic difference in what you pay out-of-pocket for hospital care.

Initial Enrollment Period (IEP)

Your IEP is the 7-month window surrounding your 65th birthday (3 months before, the month of, and 3 months after). Enroll in both Part A and B during this window to avoid late penalties and ensure seamless PSHB coordination.

Missing the Window

If you miss your IEP and do not qualify for a Special Enrollment Period, you must wait for the General Enrollment Period (January 1 to March 31), with coverage starting July 1—and late penalties may apply.

The penalty for late Part B enrollment can result in a 10% increase in your premium for every 12-month period you delayed enrollment.

Medicare Part B Requirements for PSHB Enrollees

Some Medicare-eligible PSHB annuitants and family members must enroll in Part B to maintain PSHB coverage. There are exceptions:

  • You retired on or before January 1, 2025

  • You are an employee who was age 64 or older on January 1, 2025

  • You live abroad or qualify under certain VA or Indian Health Service criteria

If you do not qualify for an exception and skip Part B, you may lose access to your PSHB plan.

Comparing Out-of-Pocket Scenarios

Let’s look at a general comparison to understand the importance of full Medicare coordination:

  • With Part A only + PSHB: Higher deductibles, more gaps in outpatient and physician charges, risk of denied claims for certain services.

  • With Part A and B + PSHB: Lower out-of-pocket spending, waived deductibles in many cases, reduced coinsurance, smoother coordination for services like skilled nursing, outpatient surgery, and ambulance transport.

What You Can Do to Protect Yourself

To ensure you aren’t left with surprise bills after a hospital stay, here are some key steps:

  • Review your PSHB plan’s Medicare coordination policy: Each plan outlines how it interacts with Medicare Parts A and B.

  • Enroll in Part B during your IEP unless you are clearly exempt.

  • Avoid assuming observation status equals inpatient coverage: Ask about your hospital status.

  • Keep track of benefit periods: Repeated hospital visits could restart your cost-sharing obligations.

  • Understand the limits on psychiatric, nursing, and hospice care: These limits are strict under Part A.

  • Check the PSHB Part D prescription drug integration: Avoid losing drug coverage by skipping necessary enrollments.

Don’t Let Assumptions Cost You

Assuming that Medicare Part A will cover all your hospital expenses is a risky move, especially when you are part of the PSHB system in 2025. In reality, Part A leaves several financial gaps that can only be covered effectively when paired with both Part B and a PSHB plan that coordinates benefits.

Understanding timelines, cost-sharing rules, and how Medicare enrollment impacts your PSHB coverage is the key to protecting your finances.

For personalized help reviewing your options, contact a licensed agent listed on this website. They can guide you through your PSHB plan’s coordination features and help you avoid expensive surprises.