Key Takeaways

  • Medicare Part A only covers specific hospital-related services and has strict cost-sharing rules, which often leave significant gaps when used alone.

  • PSHB plans help reduce these gaps, but they depend on you being properly enrolled in Medicare—especially Part B—to access full benefits and avoid unexpected costs.

Why Part A Coverage Alone Isn’t Enough

Medicare Part A is often misunderstood as comprehensive hospital coverage. While it does offer a foundation for inpatient care, its real limitations become more visible when you pair it with your Postal Service Health Benefits (PSHB) plan in retirement.

If you rely on Part A alone, you might assume you’re fully protected, especially since most people qualify for premium-free Part A. But in 2025, your out-of-pocket exposure under Part A remains substantial if you don’t also carry Part B and coordinate it correctly with your PSHB plan.

What Medicare Part A Covers in 2025

Medicare Part A is hospital insurance. It covers:

  • Inpatient hospital stays

  • Skilled nursing facility (SNF) care (after a qualifying hospital stay)

  • Some home health care

  • Hospice care

While that sounds like a broad range, the coverage is tied to rigid structures:

  • A $1,676 deductible applies for each hospital benefit period.

  • After 60 days in the hospital, coinsurance costs begin at $419 per day (days 61–90) and jump to $838 per day for lifetime reserve days.

  • Skilled nursing facility coverage only kicks in after a 3-day inpatient hospital stay and is limited to 100 days, with $209.50 daily coinsurance for days 21 through 100.

Even in 2025, these limits remain active and are not softened unless you have additional coverage—such as a PSHB plan integrated with Medicare Part B.

PSHB Plans Assume You Have Part B Too

If you’re a Medicare-eligible Postal Service retiree or annuitant, your PSHB plan expects you to be enrolled in both Part A and Part B. That’s because PSHB plans coordinate benefits assuming you carry full Original Medicare.

Failing to enroll in Part B:

  • Means your PSHB plan becomes primary payer—leading to higher out-of-pocket costs for you.

  • Can result in denied claims for services PSHB would otherwise coordinate with Medicare.

  • May disqualify you from reduced deductibles or waived copayments some plans offer to Medicare enrollees.

Mandatory Enrollment Applies in 2025

Starting January 1, 2025, certain retirees and family members must be enrolled in Medicare Part B to keep their PSHB coverage:

  • If you’re already retired and Medicare-eligible, but you haven’t enrolled in Part B yet, you may risk losing important cost-sharing benefits.

  • If you turn 65 after 2025, you will need to enroll in Medicare Part B when eligible or during a Special Enrollment Period (SEP) if applicable.

Exceptions exist for those who retired on or before January 1, 2025, or who qualify due to overseas residence or veterans’ benefits. However, you should verify with a licensed agent listed on this website if you fall under any of these exceptions.

The False Comfort of Part A Alone

On the surface, Part A seems to promise solid inpatient coverage. But as soon as you experience a longer hospital stay or need post-acute care, the cracks in that promise show. Here’s what you face:

  • No outpatient services: Part A doesn’t cover physician visits, lab tests, preventive screenings, or durable medical equipment—all of which are covered under Part B.

  • No ER coverage if not admitted: If you visit the emergency room and aren’t formally admitted, Part A doesn’t cover it.

  • No financial cushion: Without Part B, and without your PSHB plan coordinating as secondary, you’re responsible for 100% of charges Medicare doesn’t cover.

When your PSHB plan expects coordination and you only carry Part A, the plan’s assumption breaks—and so does your financial protection.

What PSHB Offers When Paired With Full Medicare

When you’re enrolled in both Medicare Parts A and B, your PSHB plan typically works as a secondary payer, filling in many of Medicare’s gaps:

  • Reduced deductibles: PSHB plans often waive their own deductible when you have full Medicare.

  • Lower copayments: Some services may have no copayment or a reduced cost.

  • More covered providers: With Medicare as primary, you gain access to a broader provider network.

  • Prescription drug benefits: If you’re eligible for Medicare, you’re automatically enrolled in a Part D prescription plan through your PSHB plan, complete with a $2,000 out-of-pocket cap for 2025.

This integration is not just beneficial—it’s expected under the new PSHB structure.

PSHB Premiums Stay the Same—Your Enrollment Choices Don’t

Your premiums for PSHB plans in 2025 stay consistent whether or not you have Medicare. However, the value you receive from those premiums depends on your Medicare enrollment.

If you decline Part B:

  • Your PSHB plan pays as the primary, meaning more is expected from you.

  • You lose access to many Medicare coordination benefits.

  • You still pay the same monthly premium but get less coverage in return.

If you accept Part B:

  • Medicare pays first, reducing PSHB’s burden.

  • Your plan may waive certain out-of-pocket costs.

  • You optimize the value of your premium.

Planning Ahead at Age 64

If you’re a USPS employee turning 64 in 2025, the clock is ticking.

  • When you turn 65, Medicare eligibility begins.

  • You should plan to enroll in Part A and Part B during your Initial Enrollment Period (IEP), which begins 3 months before your 65th birthday and ends 3 months after.

Failure to enroll in Part B during your IEP may trigger late enrollment penalties and could make you non-compliant with PSHB rules, risking reduced benefits.

This planning stage is critical because PSHB rules differ from the Federal Employees Health Benefits (fehb) system that Postal employees were covered under in the past.

Understanding the Cost-Sharing Landscape

Here’s how your cost exposure compares under different combinations:

Medicare Part A Only:

  • You pay hospital deductibles and coinsurance.

  • No coverage for doctor visits or outpatient care.

  • PSHB does not coordinate well unless Part B is present.

Medicare A + B + PSHB:

  • Medicare pays first.

  • PSHB fills in deductibles, copays, and coinsurance.

  • Prescription coverage is built in.

  • You benefit from broader provider networks.

PSHB Alone (No Medicare):

  • Plan pays as primary.

  • You carry more cost burden.

  • Some services may not be covered or covered at higher cost.

In essence, PSHB and Medicare Part B work best as a package. Leaving out Part B leaves you underinsured.

Why Coordination Matters More Than Ever in 2025

The 2025 shift to the Postal Service Health Benefits Program changes the landscape entirely. This is no longer the FEHB structure with flexible Medicare assumptions. Now, PSHB is:

  • Specifically designed to integrate with Medicare.

  • Regulated to ensure retirees and eligible family members comply with Medicare coordination rules.

  • Structured to offer enhanced value when Medicare enrollment is complete.

Without that coordination, the financial and coverage consequences fall directly on your shoulders.

The Real Takeaway: Enrollment Choices Define Your Coverage

You might assume Medicare Part A provides the safety net you need—but in reality, it’s only part of the full coverage equation. With PSHB plans built to work alongside both Parts A and B, you’ll find that skipping Part B limits your access to:

  • Reduced cost-sharing

  • Broader coverage

  • Seamless prescription drug benefits

Making the wrong choice doesn’t just reduce your benefits—it increases your financial risk. In 2025, that risk is more visible than ever before.

Get in touch with a licensed agent listed on this website to discuss your specific enrollment timeline and determine whether your current plan setup exposes you to unnecessary out-of-pocket costs.