Key Takeaways

  • While Medicare Part A is typically premium-free and automatic, ignoring its coordination with your PSHB plan can cost you significantly in 2025 and beyond.

  • Enrolling in Medicare Part A and understanding how it interacts with PSHB coverage is critical to minimizing out-of-pocket hospital expenses and ensuring full benefits.

Automatic Doesn’t Mean You Can Ignore It

When you retire from the Postal Service, you might assume that because Medicare Part A is automatic and free for most, there’s no need to give it much attention. But that’s a costly assumption under the Postal Service Health Benefits (PSHB) Program. As of 2025, your PSHB plan is structured to work with Medicare—especially Part A—and overlooking this coordination could leave you exposed to unnecessary out-of-pocket costs.

Medicare Part A typically covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. It becomes available to most U.S. citizens at age 65 if they or their spouse paid Medicare taxes for at least 40 quarters.

If you qualify, you’re enrolled automatically if you’re receiving Social Security benefits by the time you turn 65. But automatic enrollment does not mean automatic coordination with your PSHB benefits.

What Part A Covers—and What It Doesn’t

Understanding what Part A actually covers is essential to knowing why you still need to pair it with a PSHB plan:

  • Hospital stays: Part A pays for semi-private rooms, meals, general nursing, and drugs as part of your inpatient treatment.

  • Skilled nursing facility (SNF) care: Covered for a limited time following a qualifying hospital stay.

  • Home health care: Only certain medically necessary services and with physician orders.

  • Hospice care: If you are terminally ill and meet eligibility requirements.

But Part A doesn’t cover:

  • Physician fees during your hospital stay (Part B does)

  • Custodial care

  • Long-term care

  • Routine vision or dental

Without a PSHB plan or other coverage, these gaps could lead to high expenses.

Why Medicare Part A Still Matters Under PSHB

In 2025, the PSHB Program officially replaced the Federal Employees Health Benefits (fehb) system for USPS retirees. It was designed to mirror the benefits of FEHB but also align more intentionally with Medicare. That means:

  • Your PSHB plan assumes Medicare is your primary coverage once you’re eligible.

  • The plan becomes secondary, paying costs Medicare doesn’t fully cover.

  • Failing to enroll in Medicare Part A may result in fewer benefits or higher costs from your PSHB plan.

Even though you might be automatically enrolled in Part A, you must still ensure your PSHB plan is correctly updated with your Medicare information to activate secondary coverage.

What Happens If You Skip Enrolling in Medicare Part A

There are specific groups who may not get automatically enrolled in Medicare Part A:

  • You’re not receiving Social Security at 65.

  • You live abroad.

  • You declined Medicare Part A in the past (e.g., due to employer coverage).

If you don’t have Medicare Part A in place once you’re eligible, here’s what might happen with your PSHB coverage:

  • Your PSHB plan could pay as if Medicare were primary, reducing your actual benefits.

  • You might be responsible for a higher share of hospitalization costs.

  • Certain cost-sharing waivers or reimbursements tied to Medicare coordination might not apply.

Timing: Medicare Part A Enrollment Windows Matter

Even though it’s usually automatic, understanding enrollment windows ensures you’re not caught off guard:

  • Initial Enrollment Period (IEP): Starts 3 months before your 65th birthday, includes your birthday month, and ends 3 months after.

  • Special Enrollment Period (SEP): Available if you delayed Medicare due to employer coverage. Notably, the SEP for PSHB’s 2025 transition ended on September 30, 2024.

  • General Enrollment Period (GEP): Runs from January 1 to March 31 each year. Coverage begins July 1 but may carry late enrollment penalties.

If you missed the SEP deadline in 2024, your next opportunity to enroll might come with delays and potential penalties, which will affect your PSHB coordination.

How PSHB Plans Coordinate with Medicare Part A in 2025

Most PSHB plans are designed to work seamlessly with Medicare. Here’s how coordination typically works:

  • Medicare Part A pays first for covered inpatient services.

  • Your PSHB plan pays second, covering some or all of the remaining costs (such as coinsurance or deductibles).

  • Your out-of-pocket costs are reduced when both coverages are active and properly coordinated.

Many PSHB plans offer added value when Medicare is in place, such as:

  • Waived deductibles for hospital stays

  • Lower copayments for skilled nursing care

  • Enhanced prescription drug coverage via integrated Part D benefits

These perks are often unavailable if you haven’t enrolled in Medicare Part A.

The Cost Factor: Part A Is Free—But Not Using It Isn’t

Most postal retirees qualify for premium-free Medicare Part A. That means you don’t pay a monthly premium as long as you or your spouse paid Medicare taxes for 10 years.

But even if it costs nothing, not using it can be expensive. PSHB plans are increasingly built to assume Medicare pays first. If you don’t have Part A in place, your plan may not fully reimburse inpatient costs, and your portion of the bill could be much larger.

Also, many PSHB plans in 2025 offer enhanced benefits only if Medicare is active. These enhancements can include lower deductibles, lower coinsurance, and extra coverage tiers that disappear when Medicare is missing.

The PSHB System Is Built for Dual Enrollment

The structure of PSHB in 2025 is not neutral when it comes to Medicare. It encourages, and in some cases assumes, dual enrollment:

  • Most retirees and their eligible family members must enroll in Medicare Part B to keep full PSHB benefits.

  • While Part A is usually free, it still plays a key role in activating those Part B coordination features.

  • Without Part A, your PSHB benefits won’t integrate properly with your Medicare Part B enrollment.

This makes it all the more important to actively check your Part A enrollment status—even if you think you’re already covered.

Don’t Assume You’re Automatically Covered Forever

Just because you were automatically enrolled in Medicare Part A at age 65 doesn’t mean you’re in the clear forever. Here’s why:

  • Name mismatches, coverage errors, or outdated records can delay the PSHB-Medicare coordination process.

  • If you opted out of Part A in the past, reinstating it may require filing additional forms or waiting until the next enrollment window.

  • If you live abroad, automatic enrollment might not apply, requiring a manual process to opt back in.

Staying proactive with your Medicare records and making sure your PSHB plan reflects your Medicare status is your responsibility.

Your Action Plan

To avoid surprises, here’s what you should do if you’re a postal retiree approaching Medicare eligibility or already there in 2025:

  • Confirm your Medicare Part A enrollment through the Social Security website or by calling their helpline.

  • Update your PSHB plan with your Medicare information to ensure proper secondary coverage.

  • Review your Explanation of Benefits (EOBs) regularly to spot any gaps in coordination.

  • Contact a licensed insurance agent listed on this website if you’re unsure about your enrollment or how your coverage works.

Your Medicare Status Shapes Your PSHB Experience

In 2025, Medicare isn’t optional when it comes to PSHB—it’s an essential part of your health coverage puzzle. Medicare Part A might be automatic, but the responsibility to align it with your PSHB plan still lies with you. Don’t let assumptions about automatic coverage put you at risk for higher costs, delayed reimbursements, or missed benefits.

Take time to verify your enrollment, check how your PSHB plan works with Medicare, and make sure both systems recognize your status. For help making the most of your benefits, get in touch with a licensed insurance agent listed on this website.