Key Takeaways

  • Medicare Part A doesn’t eliminate your out-of-pocket hospital costs. Even with this coverage, you can still be responsible for thousands in deductibles and coinsurance.

  • Postal Service Health Benefits (PSHB) may cover what Medicare Part A does not — but only if you enroll in the right combination and understand how Medicare and PSHB work together.

Understanding Medicare Part A: What It Covers and Where It Stops

As a Postal Service annuitant or employee nearing retirement, you may feel reassured knowing Medicare Part A will step in once you’re eligible at age 65. It’s true that Part A offers solid hospital coverage, but its limits can still leave you with significant expenses.

What Medicare Part A Typically Covers

Medicare Part A focuses on inpatient hospital care, including:

  • Semi-private hospital rooms

  • Meals during inpatient stays

  • Skilled nursing facility care (short-term)

  • Hospice care

  • Some home health care (related to a recent hospital stay)

However, there are strict timelines and eligibility conditions attached to these benefits.

Inpatient Costs You Still Pay in 2025

Even though you typically don’t pay a monthly premium for Medicare Part A if you have 40 quarters of work history, the cost-sharing requirements are significant:

  • $1,676 deductible per benefit period

  • $0 coinsurance for days 1–60 in the hospital

  • $419 per day for days 61–90

  • $838 per day for lifetime reserve days (up to 60 days over your lifetime)

These numbers reset with each new benefit period. A benefit period starts when you’re admitted to a hospital and ends after you’ve been out for 60 consecutive days.

So, if you’re hospitalized multiple times in a year, you could face multiple deductibles and high coinsurance.

Where PSHB Comes In

The Postal Service Health Benefits (PSHB) program in 2025 is designed to integrate with Medicare, particularly for annuitants aged 65 or older. But PSHB doesn’t automatically cover everything Medicare doesn’t.

Medicare Part B Enrollment Requirement

If you’re eligible for Medicare and want to maintain full PSHB coverage, you’re required to enroll in Medicare Part B unless you’re exempt. This applies to:

Failing to enroll could result in your PSHB plan paying only as if you had Medicare, meaning higher out-of-pocket costs for you.

PSHB as Secondary Payer

When you’re enrolled in both Medicare Part A and B, PSHB becomes your secondary payer. In many cases, PSHB will:

  • Pay deductibles and coinsurance that Medicare doesn’t

  • Cover services Medicare doesn’t, such as overseas emergency care

  • Offer additional wellness or pharmacy benefits

But this depends on your specific PSHB plan, and you should confirm what each plan covers during Open Season.

Multiple Hospitalizations Can Mean Multiple Deductibles

Many people mistakenly assume Medicare Part A covers a full year of hospitalization. In reality, Medicare resets the benefit period after 60 days out of the hospital. This means:

  • You could pay the $1,676 deductible more than once in a year

  • You might hit the coinsurance thresholds again and again

This is where the safety net of PSHB matters. If your plan coordinates well with Medicare, it may absorb some or all of these extra costs.

Skilled Nursing Facility (SNF) Coverage Isn’t Unlimited

After a qualifying three-day inpatient hospital stay, Medicare Part A covers skilled nursing facility care for up to 100 days. The cost breakdown in 2025 is:

  • Days 1–20: $0

  • Days 21–100: $209.50 per day

  • After 100 days: You pay 100% of the cost

If you require extended rehabilitation or recovery beyond this window, the bills can accumulate quickly. Some PSHB plans may offer extended SNF coverage, but not all do. It’s critical to check this benefit detail when comparing plans.

You Pay for Long-Term Care Out of Pocket

One of the biggest misconceptions about Medicare Part A is that it covers long-term care. It does not. If you need help with everyday activities over a prolonged period (such as in a nursing home), you’re generally on your own.

  • Medicare Part A only covers medically necessary skilled care after a qualifying hospital stay.

  • Custodial care (help with bathing, dressing, eating) is not covered.

Unless your PSHB plan includes some form of long-term care benefit or you purchase separate coverage, you may face substantial costs.

Observation Status vs. Inpatient Admission

Even if you spend a night in the hospital, you might not be officially considered an inpatient. Instead, hospitals sometimes classify patients under “observation status,” which doesn’t trigger Medicare Part A coverage at all.

  • Observation care is billed under Medicare Part B

  • It doesn’t qualify you for skilled nursing coverage afterward

If you don’t understand the distinction, you could leave the hospital with bills you weren’t expecting. Your PSHB plan may provide limited help, but coordination depends on the plan and your Medicare enrollment.

Emergency Room and Outpatient Hospital Services

Emergency room visits, even if urgent, are not covered under Medicare Part A unless they lead to an inpatient admission. Most ER visits fall under Medicare Part B. That means:

  • You pay a separate deductible ($257 in 2025)

  • You pay 20% of approved costs unless you have secondary coverage

A PSHB plan may pick up the rest, but again, this hinges on Medicare Part B enrollment and the plan’s coordination rules.

Gaps in Coverage for Home Health and Hospice

Medicare Part A covers limited home health care and hospice, but the scope is narrower than many realize. For example:

  • Only certain therapies and skilled nursing visits are covered

  • Custodial care is not included

  • Hospice patients must forgo curative treatment

You could need additional services Medicare doesn’t pay for. Some PSHB plans may fill in these gaps, but this is not guaranteed. You should review your plan’s brochure carefully.

Why Planning Ahead Matters

It’s easy to assume that once you reach age 65, Medicare takes care of most health expenses. But as a PSHB participant, your protection is only as good as your planning. Without Medicare Part B, your PSHB plan might not cover what you think it will. Without the right PSHB plan, you may still pay substantial out-of-pocket expenses even with Medicare.

Time-Sensitive Windows to Watch

  • Initial Medicare Enrollment: Starts 3 months before your 65th birthday and ends 3 months after

  • Open Season for PSHB: Occurs each year from November to December

  • Special Enrollment Periods: Triggered by life events, such as retirement or moving

Missing these windows can limit your options or lead to late enrollment penalties.

You Could Still Be On the Hook for Thousands

When you combine Medicare Part A’s deductibles, coinsurance, and limited service coverage with any gaps in your PSHB plan, it’s clear that you could still owe thousands out of pocket each year. Common reasons include:

  • Multiple hospitalizations

  • Skilled nursing beyond 20 days

  • Long-term custodial care

  • Outpatient hospital and ER services

  • Lack of Medicare Part B enrollment

  • Choosing a PSHB plan with high deductibles or limited coordination

Avoiding these financial surprises means doing your homework before you enroll—and continuing to reassess your plan during each Open Season.

Maximize Your PSHB and Medicare Benefits Wisely

Understanding how Medicare Part A fits within the broader PSHB landscape is essential. This isn’t about double coverage—it’s about making sure you don’t fall through the cracks. With so many variables, reviewing your options carefully and early can prevent financial hardship down the road.

If you’re unsure about your choices, get in touch with a licensed agent listed on this website for professional advice tailored to your situation.