Why Part A Hospital Coverage May Leave Gaps That Surprise You Later

Key Takeaways

• Medicare Part A is not fully comprehensive—it covers hospital services but does not eliminate all out-of-pocket costs.

• If you’re a Postal Service annuitant or employee, PSHB plans can help fill critical coverage gaps, but only if you’re enrolled in Medicare properly and understand your plan.

What Part A Actually Covers—and What It Doesn’t

Medicare Part A, often referred to as hospital insurance, plays a crucial role in covering inpatient hospital care, skilled nursing facility care (under certain conditions), hospice care, and limited home health services. If you’re age 65 or older and have paid into Medicare for at least 10 years, you’re typically eligible for premium-free Part A.

However, while it sounds reassuring, Part A is far from all-inclusive. It does not cover long-term care, routine dental or vision care, private-duty nursing, or custodial care. Even within its scope, there are strict limitations and conditions for coverage, along with significant cost-sharing.

Your Out-of-Pocket Costs Under Part A in 2025

In 2025, you face several out-of-pocket expenses even with Medicare Part A:

• Inpatient hospital deductible: $1,676 per benefit period.

• Coinsurance:

  • Days 1–60: $0 (after deductible).

  • Days 61–90: $419 per day.

  • Days 91 and beyond: $838 per day (using your 60 lifetime reserve days).

  • After lifetime reserve days: You pay all costs.

• Skilled Nursing Facility (SNF) care:

  • Days 1–20: $0.

  • Days 21–100: $209.50 per day.

  • After 100 days: You pay all costs.

If you’ve never had a long hospital stay or SNF experience, these numbers might not seem alarming. But if you do need extended care, these costs can accumulate rapidly.

The 3 Most Common Gaps That Surprise PSHB Enrollees

1. Hospital Stays That Extend Past 60 Days

You may assume a hospital stay is fully covered as long as you’re admitted. But if your stay extends beyond 60 days in a single benefit period, you begin paying daily coinsurance. If you reach day 91, you start using up your 60 lifetime reserve days. Once those run out, you’re fully responsible for all hospital costs.

For someone relying solely on Part A, that’s a financial shock waiting to happen. PSHB plans can coordinate with Medicare to reduce or eliminate some of these expenses—but only if you’re enrolled in both correctly.

2. Limited Skilled Nursing Facility Coverage

Medicare Part A only covers SNF care after a qualifying 3-day inpatient hospital stay and only for a maximum of 100 days per benefit period. Beyond 20 days, the daily coinsurance applies. Once you hit day 101, Medicare stops paying completely.

PSHB plans may offer extended benefits or reduced copays—but again, only if you’re enrolled in Medicare Part B as well. Some retirees mistakenly think Part A alone is enough to cover rehabilitation care. It isn’t.

3. The Cost of Readmissions

Hospital readmissions are common among older adults. Each new benefit period restarts the deductible. If you’re admitted multiple times throughout the year, you may owe the $1,676 deductible repeatedly. It’s not a one-time annual payment.

Understanding this structure is essential, especially for Postal Service annuitants who often believe Medicare Part A acts like traditional insurance. It doesn’t.

What PSHB Does—And Doesn’t—Cover for You

PSHB plans are designed to work in tandem with Medicare, especially for annuitants and their Medicare-eligible family members. Many PSHB plans waive deductibles and copays if you’re enrolled in both Part A and Part B.

Here’s what PSHB may offer when combined with Medicare:

• Reduced out-of-pocket expenses.

• Coordination of benefits to lower coinsurance and deductibles.

• Access to a Medicare Part D drug plan through PSHB.

However, PSHB alone does not replace Medicare. If you delay enrollment in Medicare Part B when required, your PSHB plan may default to paying as if you had Part B—which means you pay the difference.

Also, not all PSHB plans offer the same level of coordination. Some plans offer better integration with Medicare than others, so reviewing plan brochures each Open Season is essential.

Why Medicare Part B Is Critical for PSHB Enrollees

Medicare Part A and Part B together form what’s known as Original Medicare. Many Postal Service annuitants are surprised to learn that PSHB plans assume you have both.

In 2025, Medicare-eligible PSHB enrollees must enroll in Part B to maintain full PSHB benefits, unless they meet specific exemption criteria. These include:

• Retiring on or before January 1, 2025.

• Being age 64 or older as of January 1, 2025.

• Living abroad.

• Being enrolled in VA or Indian Health Services.

If you’re not exempt and fail to enroll in Part B, you may lose access to full coverage and face higher out-of-pocket costs.

Understanding Benefit Periods—and Why They Matter More Than You Think

Medicare Part A benefit periods are often misunderstood. A benefit period begins the day you’re admitted to a hospital and ends when you haven’t received inpatient care for 60 days in a row.

This means:

• You can have multiple benefit periods in a year.

• Each new benefit period requires you to pay the full deductible again.

• There is no limit to the number of benefit periods per year.

This structure differs greatly from typical health insurance plans with annual deductibles. You could end up paying the $1,676 deductible several times in one year.

PSHB plans often help cover repeated deductibles—but only with proper Medicare coordination.

Hospice Care Is Covered—But With Conditions

Part A covers hospice care if you are terminally ill and have chosen to receive comfort care instead of curative treatment. But coverage comes with:

• Copayments for prescription drugs for symptom control.

• 5% coinsurance for inpatient respite care.

• Room and board not covered if you live at home or in a nursing home not affiliated with hospice.

While this coverage is valuable, it still leaves you with some out-of-pocket costs unless your PSHB plan supplements them.

What to Watch for During Each Open Season

As a Postal Service annuitant or eligible employee, Open Season (held annually from November to December) is your opportunity to:

• Review your PSHB plan’s coordination with Medicare.

• Confirm that your plan offers cost-sharing benefits for those enrolled in both Part A and B.

• Compare your plan’s deductible, coinsurance, and SNF coverage benefits.

If you’re newly eligible for Medicare or expect to be in the coming year, this is the time to align your benefits and avoid unnecessary costs.

If You Delay Enrollment, Penalties and Gaps Follow

Part A is usually premium-free, so there’s rarely a reason to delay it. But delaying Part B can result in:

• A late enrollment penalty added to your premium—permanently.

• Higher PSHB out-of-pocket costs, since the plan assumes Medicare is the primary payer.

• Possible loss of prescription drug coverage under the integrated Part D benefit if you’re not enrolled in Medicare properly.

The sooner you get Part B aligned with your PSHB plan, the better protected you are.

Long-Term Care Isn’t Covered—By Either Program

One of the biggest misconceptions is that Medicare (Part A or B) or PSHB plans cover long-term custodial care. They do not.

This includes:

• Assisted living.

• Nursing home stays beyond SNF limits.

• Help with daily activities like bathing, dressing, or eating.

Planning ahead for these services is essential because neither PSHB nor Medicare will foot the bill.

Don’t Rely on Part A Alone—Coordinate Wisely with PSHB

If you’re counting on Medicare Part A to cover all your hospital or rehabilitation needs, you’re likely to be caught off guard. The gaps can be significant—and expensive.

Thankfully, as a PSHB enrollee, you have the opportunity to reduce or even eliminate many of these expenses, but only if you understand how to align your Medicare benefits properly.

Work with a licensed agent listed on this website to review your PSHB plan alongside your Medicare enrollment. Doing so can protect your financial well-being and give you peace of mind in retirement.