Key Takeaways

• Even though Medicare Part A is often described as “premium-free,” you may still face substantial costs—including deductibles, coinsurance, and coverage limitations—that can add up quickly during a hospital stay.

• As a Postal Service Health Benefits (PSHB) enrollee, understanding how your PSHB plan interacts with Medicare Part A is essential for avoiding surprise charges and maximizing your healthcare coverage.

The Truth Behind the “Free” Label of Medicare Part A

If you’ve heard that Medicare Part A is free, you’re not alone. The phrase “premium-free Part A” refers to the fact that most people who worked at least 40 quarters (10 years) while paying Medicare taxes don’t have to pay a monthly premium. But that doesn’t mean the coverage is entirely without cost.

In 2025, Medicare Part A still carries significant out-of-pocket expenses. These include deductibles, daily coinsurance charges, and specific limits on what Medicare will cover—particularly for longer hospital stays, skilled nursing care, and home health services. If you’re a current or retired USPS employee enrolled in PSHB, you’ll want to look closely at how these costs might affect you.

What Medicare Part A Covers (and What It Doesn’t)

Medicare Part A generally covers:

• Inpatient hospital stays

• Skilled nursing facility care (under specific conditions)

• Some home health care

• Hospice care

However, it doesn’t cover everything. Some key services not covered under Part A include:

• Long-term custodial care

• Personal care (e.g., help with bathing or dressing)

• Private-duty nursing

• A private room (unless medically necessary)

This means you’ll either need supplemental coverage or be prepared to cover the gap out-of-pocket—unless your PSHB plan fills some of these gaps.

The Deductible Kicks In Quickly

One of the first costs you’ll encounter with Medicare Part A is the inpatient hospital deductible. In 2025, this deductible is $1,676 per benefit period. And importantly, Medicare defines a “benefit period” as starting the day you’re admitted to a hospital and ending when you haven’t received inpatient care for 60 consecutive days.

If you’re hospitalized more than once within a year but outside a 60-day window, you may have to pay the deductible more than once. That adds up fast, especially for retirees with chronic conditions or unexpected health issues.

The Clock on Hospital Days Starts Ticking

After you meet your Part A deductible, Medicare covers your inpatient hospital costs for up to 60 days without coinsurance. But beyond that:

• Days 61–90: You pay a daily coinsurance of $419.

• Days 91 and beyond: You pay $838 per day, using up one of your 60 lifetime reserve days.

• After lifetime reserve days are used up: You pay all costs.

Your PSHB plan may offer additional coverage for extended hospital stays, but not all plans do. Check your plan brochure for specific provisions.

Skilled Nursing Facility Coverage Has Strict Rules

Skilled nursing facility (SNF) care is another area where many PSHB members are caught off guard. Medicare Part A will cover SNF care only if:

• You had a qualifying hospital stay of at least three days.

• You enter the SNF within a short time (generally 30 days) of discharge.

• Your SNF care is related to the condition treated during your hospital stay.

Even then, coverage is limited:

• Days 1–20: Medicare covers 100%.

• Days 21–100: You pay $209.50 per day.

• After 100 days: You pay all costs.

Your PSHB plan may reduce or eliminate some of these charges, but it depends on the specific plan option you chose during Open Season.

Home Health Care Isn’t Always Fully Covered

Home health services under Medicare Part A can seem like a good alternative to a hospital or SNF stay—but again, limitations apply. You must meet strict eligibility criteria, and while some services like physical therapy, intermittent skilled nursing, and medical social services are covered, personal care services are not.

Even when services are covered, you may still be responsible for:

• 20% of the cost of durable medical equipment (DME)

• Supplies not deemed medically necessary

Check whether your PSHB plan offers expanded home care support, which may reduce your exposure to these costs.

Hospice Care: Covered, But With Caveats

Hospice services are generally well-covered under Part A if your doctor certifies you as terminally ill and you agree to palliative care instead of curative treatment. But that doesn’t mean it’s free of all charges.

You may still pay:

• Copayments of up to $5 for prescription drugs

• 5% of the Medicare-approved amount for respite care

It’s also worth noting that hospice coverage under Medicare can affect what other services your PSHB plan will cover during the same period.

What PSHB Adds to the Equation

Postal Service Health Benefits (PSHB) plans are designed to integrate with Medicare—especially for retirees. Many plans waive deductibles or reduce coinsurance when you are also enrolled in Medicare Parts A and B. However, not all PSHB plans are equal.

Some important factors to look into:

• Does your PSHB plan offer full coordination with Medicare?

• Are deductibles or copayments waived if you have both Medicare Part A and PSHB?

• Are prescription drugs coordinated through a Medicare Part D EGWP (Employer Group Waiver Plan)?

Understanding your plan’s Summary of Benefits will help you avoid redundant costs or gaps in care.

Cost Planning Is Critical—Especially in Retirement

You may have assumed that turning 65 and enrolling in Medicare would significantly reduce your healthcare spending. But unless you’ve read the fine print on both Medicare and your PSHB plan, you could be facing:

• Repeat Part A deductibles within the same year

• Daily coinsurance costs for long hospital stays

• Out-of-pocket charges for SNF care past 20 days

• Gaps in home health services or hospice-related medications

These are not minor details. As a retiree on a fixed income, an unexpected hospitalization or extended SNF stay can shift your financial outlook. Coordination between Medicare and PSHB is key—but it’s not automatic. You have to make sure your enrollment and plan choices align.

Enrollment Timing Matters More Than You Think

Most PSHB retirees are strongly encouraged—or required—to enroll in Medicare Part B when they become eligible. While Part A is often considered a given at age 65, make sure you:

• Enroll during your Initial Enrollment Period (IEP), which begins three months before your 65th birthday and ends three months after.

• Avoid late enrollment penalties that can last for life if you miss this window.

• Confirm how PSHB will treat your coverage if you delay Part B enrollment.

Your choice to enroll (or delay) Medicare affects how costs are shared between Medicare and your PSHB plan—and ultimately, how much you pay out-of-pocket.

Reviewing Your Annual Plan Is Not Optional

Even if you’ve made all the right decisions so far, Medicare and PSHB rules change annually. Premiums go up. Deductibles shift. Coverage rules evolve. Each Open Season—from November to December—is your chance to:

• Reassess your current PSHB plan’s coordination with Medicare

• Review updates in the Medicare Part A deductible and cost-sharing

• Compare whether other PSHB plan options could reduce your exposure

If you’re not reviewing your plan annually, you might be absorbing costs your plan could have helped you avoid.

Understanding Medicare Part A Is a Financial Necessity

There’s a lot more to Medicare Part A than the absence of a premium. As a PSHB enrollee—whether you’re actively employed or retired—you need to understand:

• When the benefit period resets

• What counts as a qualifying hospital stay

• How coinsurance accumulates over time

• Whether your PSHB plan is aligned to reduce your exposure

These aren’t hypothetical issues. These are real scenarios that could cost you hundreds or even thousands of dollars if you don’t plan ahead.

It’s Time to Take a Second Look at Your Coverage

Medicare Part A might look simple at first glance, but the reality includes substantial out-of-pocket costs and nuanced rules that impact your Postal Service Health Benefits. If you’re relying on Medicare alone—or assuming your PSHB plan covers everything automatically—you could be in for a costly surprise.

To protect your health and your finances, make sure you’re clear on how Medicare Part A works in 2025—and how it pairs with your current PSHB plan. If you’re unsure, it’s worth the time to reach out and review your coverage with a licensed agent listed on this website. Their guidance can help you align your Medicare and PSHB benefits and avoid the financial traps hidden in plain sight.