Key Takeaways

• Medicare Part A plays a foundational role in how your PSHB benefits coordinate hospital-related costs, especially when you become Medicare-eligible.

• Even though your PSHB coverage seems to offer extensive protection, skipping Part A could increase your out-of-pocket costs and complicate claims once Medicare becomes primary.

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

Medicare Part A is hospital insurance. It generally covers:

• Inpatient hospital stays

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

• Some home health services

• Hospice care

What it doesn’t cover includes:

• Outpatient care

• Doctor visits not tied to inpatient admission

• Most prescription drugs (outside of hospice)

• Long-term custodial care

PSHB plans may cover some of these areas, but once you become eligible for Medicare, your PSHB plan assumes Medicare is in place. That means Part A is not optional without consequences.

You Paid for It Already—So Why Decline It?

If you or your spouse worked for at least 10 years in Medicare-covered employment, you’re eligible for premium-free Part A starting at age 65. Since it’s already been funded through payroll taxes, declining it typically doesn’t save you money. Instead, it may cost you more in the long run.

Your PSHB plan works under the assumption that Medicare becomes your primary payer when you’re eligible. If you don’t enroll in Part A, your PSHB plan may:

• Refuse to pay the amount Medicare would have covered

• Require you to cover those costs yourself

• Consider you out-of-network in certain facilities

This means you’re duplicating your coverage gap, not simplifying your healthcare.

PSHB Coordination Rules in 2025: Medicare Matters More Than Before

In 2025, new PSHB rules make Medicare enrollment more than a suggestion. If you are a Medicare-eligible annuitant or family member, you’re generally required to enroll in Medicare Part B to keep your PSHB benefits. But Part A is foundational too—it integrates with PSHB in key ways:

• Inpatient services: Medicare Part A becomes the primary payer for covered inpatient stays. Your PSHB plan picks up the rest.

• Skilled nursing care: Medicare covers the first 20 days in full (after a qualifying hospital stay). Without Part A, those costs shift to your PSHB plan—or to you.

• Home health and hospice: These benefits may be coordinated through Medicare, with PSHB covering non-overlapping services.

Not enrolling in Part A causes your PSHB plan to operate differently, often reducing how much it pays and requiring more from your pocket.

Cost-Sharing Implications Without Part A

PSHB plans in 2025 have cost-sharing structures based on coordination with Medicare. If you don’t enroll in Part A:

• You lose the benefit of Medicare’s coverage first layer.

• Your PSHB plan may impose higher coinsurance or deductibles.

• You may pay up to the full inpatient hospital bill.

Given that the Medicare Part A deductible in 2025 is $1,676 per benefit period, and daily coinsurance can reach $419 for days 61–90, PSHB plans use this baseline to calculate their own responsibilities. Without Part A, you may not benefit from those shared-cost calculations.

Eligibility and Enrollment Timing for Part A

You can sign up for Medicare Part A during several periods:

• Initial Enrollment Period (IEP): 7-month window starting 3 months before the month you turn 65

• General Enrollment Period (GEP): January 1 to March 31 if you missed IEP, with coverage beginning July 1

• Special Enrollment Period (SEP): If you delayed due to active employment coverage and now you’re retiring

For Postal retirees, your eligibility for PSHB integration begins once you retire and become Medicare-eligible. Missing the Part A enrollment window doesn’t incur a late penalty, but it may delay your PSHB coordination and increase your short-term out-of-pocket expenses.

What Happens if You Only Enroll in Part B?

Some Postal retirees mistakenly believe that Part B alone satisfies Medicare coordination. However, Part B only covers:

• Doctor visits

• Outpatient services

• Durable medical equipment

Without Part A, you lack protection against major hospitalization costs. PSHB plans may not pick up the full difference. That’s why most plans assume you have both Part A and B if you are Medicare-eligible.

Furthermore, enrolling in only Part B means:

• Medicare won’t pay anything toward hospital stays

• You may be treated as uninsured for inpatient care by facilities

• Claims may be delayed or denied as coordination fails between Medicare and PSHB

The Financial Upside of Part A Enrollment

Beyond coverage protection, enrolling in Part A can reduce your total healthcare costs:

• Lower deductible exposure: Your PSHB plan may waive or lower deductibles for those with Medicare

• Reduced coinsurance: Copayments for inpatient care may drop significantly when Medicare is primary

• Pharmacy savings: Although Part A doesn’t cover prescriptions generally, when paired with PSHB’s integrated drug coverage, your total drug-related spending may decrease

PSHB plans are increasingly designed to complement Medicare, not replace it. By forgoing Part A, you’re making your coverage more expensive and less efficient.

PSHB Enrollment and Medicare Part A Integration: What You Should Know

The PSHB system transitioned in January 2025, requiring that Medicare-eligible annuitants enroll in Part B unless exempt. While Part A isn’t legally mandated, here’s why it’s functionally essential:

• Claims processing depends on Medicare’s primary role

• Plan designs expect dual coverage

• Drug plan enrollment through PSHB’s EGWP is smoother with full Medicare alignment

If you’re already retired or retire before the end of 2025, you may qualify for certain exemptions, but opting out of Part A still leaves critical coverage gaps.

Are There Any Exceptions to Taking Part A?

There are very few scenarios where declining Part A makes sense:

• If you have to pay the full Part A premium (usually due to insufficient work credits)

• If you are enrolled in a non-PSHB plan that requires different coordination

• If you are overseas and receiving care outside Medicare’s scope

Even then, weigh the financial impact carefully. Most annuitants with PSHB will benefit from taking Part A as soon as eligible.

Medicare as Primary: What PSHB Pays Afterward

Once you enroll in Medicare, it pays first for eligible services. Your PSHB plan then covers:

• Deductibles and coinsurance left after Medicare pays

• Non-covered services (depending on your plan)

• Additional services not included under Medicare, like dental or hearing

If you skip Part A, this coordination doesn’t function correctly. Your PSHB plan may reject claims or shift more costs to you.

Timeline of Key Events for 2025 Retirees

If you’re turning 65 or retiring in 2025, here’s what you need to plan:

• 3 months before your 65th birthday: Begin Part A enrollment

• Month you turn 65: Medicare coverage starts

• Post-retirement (if after age 65): Enroll in Part A if not already enrolled

• Before Open Season (November–December): Review PSHB plan to ensure it coordinates properly with Medicare

Missing these checkpoints can complicate your PSHB coverage and lead to unexpected hospital costs.

Choosing the Right Time to Enroll

For most PSHB participants, enrolling in Part A at age 65—regardless of employment status—is the best move. Since there’s no premium for most, delaying serves little benefit.

If you are still working and covered by active employment, you may choose to delay Part B without penalty, but you can and should still take Part A. This ensures your PSHB plan is properly aligned once Medicare becomes primary.

Why Medicare Part A Is the Quiet Cornerstone of Your Retirement Healthcare

It’s easy to think of your PSHB plan as your safety net, but without Medicare Part A, that net may have holes. The 2025 coordination rules don’t allow much wiggle room, and PSHB plans increasingly assume that all Medicare-eligible members are participating fully in the system.

If you’re planning for retirement or already enrolled in PSHB, take a moment to verify your Medicare status—specifically whether Part A is active. This one step could prevent thousands in future hospital costs and make your PSHB coverage function the way it’s designed.

Take the Next Step Toward Full Protection

Don’t overlook how important Medicare Part A is to your Postal Service Health Benefits. While your PSHB plan may feel all-encompassing, it isn’t meant to function alone once Medicare becomes available. Part A ensures you aren’t overpaying for inpatient care and that your plan pays what it’s supposed to.

To avoid missteps and make the most of your benefits, get in touch with a licensed agent listed on this website. They can help confirm your current enrollment, explain what’s next based on your retirement date, and walk you through optimizing your coverage.