Key Takeaways

  • Medicare Part A is often misunderstood as full hospital coverage. In 2025, it still leaves major gaps—including deductibles, coinsurance, and limits on skilled nursing care.

  • As a PSHB enrollee, assuming Medicare Part A is enough can expose you to high out-of-pocket costs unless you also enroll in Medicare Part B and choose a PSHB plan that coordinates effectively.

The Comfort of Assumptions—And Why They Fail

If you’re a Postal Service retiree approaching or over age 65, it’s tempting to believe Medicare Part A alone is enough to protect you from high hospital bills. After all, it covers inpatient stays, right? Yes—but only partially. And in 2025, assuming otherwise can be a costly mistake, especially with how PSHB coverage works.

What Medicare Part A Actually Covers in 2025

Medicare Part A is designed to cover major hospital-related services, but it doesn’t cover everything you might assume. Here’s what it includes:

  • Inpatient hospital stays: Covered after a $1,676 deductible per benefit period.

  • Skilled nursing facility (SNF) care: Fully covered only for the first 20 days. From day 21 to day 100, you pay $209.50 per day.

  • Hospice care: Covered, but room and board are not if you reside in a hospice facility.

  • Some home health services: Limited to part-time skilled nursing and certain therapies.

But the costs that fall outside these limits—and those related to physician services, outpatient treatments, or prescriptions—are not included under Part A.

What Part A Leaves Out—The Exposure You May Not See Coming

Even though Part A covers big-ticket items, it comes with conditions that can leave you paying thousands out-of-pocket if you rely on it alone. Here are some examples:

  • Hospital deductible resets with each benefit period, which starts again after you’ve been out of the hospital or SNF for 60 consecutive days.

  • Coinsurance adds up fast for longer hospital or SNF stays.

  • Observation status doesn’t count as inpatient. If you’re held for observation in a hospital, Part A won’t cover it—Part B would, but only if you’re enrolled.

  • No coverage for doctor fees during inpatient stays unless you have Part B.

  • No outpatient coverage, like ER visits that don’t lead to admission, surgeries, or diagnostic services.

PSHB and Medicare: A Partnership—But Only If You Join Both Parts

The 2025 structure of the Postal Service Health Benefits (PSHB) program assumes Medicare coordination. If you’re 65 or older and eligible for Medicare, the expectation is that you enroll in both Part A and Part B to keep full access to PSHB.

Here’s how PSHB plans integrate with Medicare:

  • When you have both Part A and Part B, Medicare becomes your primary payer, and your PSHB plan becomes secondary. This setup dramatically reduces or even eliminates out-of-pocket costs in many situations.

  • If you have only Part A, Medicare covers just hospital expenses, and your PSHB plan might not coordinate benefits well. This exposes you to high costs for outpatient services, physician visits, and more.

In short, PSHB coverage is not designed to stand on its own once you’re Medicare-eligible.

2025 Enrollment Requirements for PSHB Retirees

As of 2025, the rules are clear:

  • If you retired on or before January 1, 2025, Medicare Part B enrollment is not mandatory to keep your PSHB coverage, but highly recommended to avoid gaps.

  • If you retire after January 1, 2025, and are eligible for Medicare, you must enroll in both Part A and Part B to remain in a PSHB plan.

Failing to enroll in Part B can lead to loss of drug coverage, limited medical benefits, and far higher out-of-pocket costs—especially since PSHB prescription drug coverage relies on coordination with a Medicare Part D EGWP.

What Happens If You Skip Medicare Part B

Many retirees skip Part B due to the monthly premium, but in doing so, they give up protection that fills crucial gaps left by Part A. Here’s what you risk in 2025 if you only enroll in Part A:

  • No coverage for outpatient surgeries, x-rays, lab tests, or doctor visits

  • Limited emergency room coverage, especially if not admitted as an inpatient

  • Higher copays or deductibles under your PSHB plan, depending on its coordination rules

  • Loss of integrated prescription drug coverage, unless you opt into Part B

  • Late enrollment penalties if you change your mind later. The penalty for enrolling late in Part B is 10% for every 12-month period you delay.

PSHB and Medicare Part D—Don’t Overlook the Drug Piece

Postal retirees enrolled in both PSHB and Medicare are automatically placed into a Medicare Part D Employer Group Waiver Plan (EGWP) through their PSHB carrier. This offers:

  • Expanded pharmacy access

  • $2,000 out-of-pocket maximum on drug costs in 2025

  • Lower copays for brand and specialty drugs

But here’s the catch: if you don’t enroll in Medicare Part B, you lose eligibility for the Part D drug benefit under PSHB. This could leave you without drug coverage or force you into a stand-alone plan that may not offer the same protection.

Misunderstanding Observation Status—A Costly Blind Spot

One of the most confusing areas is hospital observation status. You may be in a hospital bed overnight, receiving tests and care—but not officially “admitted” as an inpatient.

  • If you’re under observation, Medicare Part A won’t pay. Part B would, but only if you’re enrolled.

  • Skilled nursing facility (SNF) eligibility under Part A requires a 3-day inpatient admission. Observation days do not count toward that.

This can trigger thousands in costs for SNF care or hospital services you assumed were covered. And PSHB plans may not fill the gaps unless Medicare is billed first.

Why Medicare Part A Alone No Longer Works as a “Safety Net”

In 2025, the reality is that healthcare delivery is more outpatient-driven than ever. Hospital stays are shorter, observation stays are more common, and expensive diagnostics or treatments often occur outside inpatient settings. Medicare Part A was never designed to handle this shift alone.

Your PSHB plan expects to coordinate with both parts of Medicare. If you skip Part B, the domino effect isn’t limited to reduced coverage. You may also lose access to key PSHB benefits like:

  • Waived deductibles

  • Lower coinsurance

  • Integrated drug coverage

  • Extended provider networks

And once you pass up initial Medicare enrollment, getting back in comes with penalties and enrollment wait periods.

What You Should Do If You’re Nearing Age 65 or Already Eligible

If you’re approaching Medicare eligibility, or already over 65 and only enrolled in Part A, now is the time to reassess. Here are the immediate steps to take:

  • Check your retirement date to understand if Medicare Part B is mandatory for you.

  • Evaluate your PSHB plan’s coordination rules with Medicare.

  • Enroll in Medicare Part B during your Initial Enrollment Period or a Special Enrollment Period if eligible.

  • Review your prescription drug needs and whether the PSHB Medicare Part D EGWP will serve you better than a separate plan.

Where Your Protection Falls Short Without Full Enrollment

The common belief that “Medicare Part A is enough” can lead you straight into coverage gaps that cost thousands. While Part A covers a lot, its scope is narrow and tied to specific conditions.

As a PSHB enrollee, you face a different reality than traditional Medicare users. Your benefits are designed to work with Medicare Parts A and B. Skipping Part B not only cuts off access to outpatient care, but also compromises your entire PSHB coverage strategy.

Ensure You’re Covered from Every Angle

You’ve earned your retirement—and your health benefits. But relying on Medicare Part A alone puts too much at risk. It doesn’t provide the complete safety net that PSHB enrollees often assume it does.

To make the most of your hard-earned benefits, speak with a licensed agent listed on this website. They can help you review your retirement date, assess your plan’s coordination with Medicare, and ensure you’re fully protected.