Key Takeaways

• Medicare Part A offers essential hospital coverage, but it does not cover everything you might expect. There are limitations on services, costs, and timelines that can leave gaps in care if not coordinated with PSHB.

• Your Postal Service Health Benefits (PSHB) plan fills many of the gaps left by Medicare Part A, but only if you understand how both programs interact. Assuming that Medicare alone is enough could expose you to high out-of-pocket expenses.

Why Medicare Part A Alone May Leave You Vulnerable

Medicare Part A is often misunderstood as a catch-all hospital insurance plan. While it covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services, the scope and duration are limited. In 2025, if you rely solely on Part A without aligning it with your Postal Service Health Benefits (PSHB) coverage, you may encounter costly blind spots.

Coverage Isn’t Unlimited

Part A benefits are bound by benefit periods and strict qualification rules:

• Inpatient hospital deductible: $1,676 per benefit period

• Coinsurance for extended hospital stays: Starting on day 61, you pay $419 per day; after day 90, it increases to $838 per day (lifetime reserve days)

• Skilled Nursing Facility (SNF) care: Only covered after a qualifying 3-day inpatient hospital stay, with full coverage for the first 20 days and a $209.50 daily coinsurance from days 21 to 100

These costs add up quickly if your hospital or SNF stay exceeds the covered timelines.

Limitations on Services

Medicare Part A does not cover:

• Doctor services received during an inpatient stay (those fall under Part B)

• Prescription drugs administered outside the hospital setting

• Custodial or long-term care

• Routine dental, hearing, or vision services

These gaps become especially noticeable if you’re under the impression that Part A alone protects you from high costs during serious illnesses or extended recovery.

How PSHB Complements Medicare Part A

The Postal Service Health Benefits (PSHB) program was created specifically for USPS employees and retirees and took effect in 2025. Its structure is designed to work alongside Medicare, especially for those eligible for Part A and B. The goal is to reduce your out-of-pocket exposure and ensure comprehensive care.

Waived Deductibles and Coinsurance

Many PSHB plans waive or reduce deductibles and coinsurance if you’re enrolled in both Medicare Part A and B. This coordination helps eliminate the double-billing that could happen if you rely on one program alone.

For example:

• When Medicare Part A pays as primary, your PSHB plan may pick up remaining hospital costs.

• For skilled nursing care, your PSHB plan may cover coinsurance that Medicare doesn’t.

Enhanced Prescription Coverage

Medicare Part A doesn’t include outpatient drug benefits. Under the PSHB program, drug coverage is handled through an integrated Medicare Part D Employer Group Waiver Plan (EGWP), giving you access to:

• A $2,000 out-of-pocket cap on prescriptions in 2025

• A $35 monthly insulin cap

• Expanded pharmacy networks

This addition is critical for managing chronic conditions affordably.

Your enrollment Decisions Matter

Assuming that enrolling in Medicare Part A is enough can result in unexpected bills, especially under the new PSHB structure. As of January 1, 2025, Medicare-eligible annuitants and family members must enroll in Medicare Part B to maintain full PSHB benefits—with a few exceptions:

• Retirees who retired on or before January 1, 2025 and were not already enrolled in Part B

• Employees who were age 64 or older on January 1, 2025

• Individuals living overseas

• Those eligible for VA or Indian Health Service benefits

Failing to enroll in Part B (if required) may mean:

• Loss of PSHB prescription drug coverage

• Limited coordination of benefits

• Increased out-of-pocket expenses

Hospital Coverage: Where Medicare Stops and PSHB Steps In

Even if you have Medicare Part A, a hospital stay can come with bills that aren’t obvious upfront. Without coordination from PSHB, you may face:

• Emergency room copayments not covered by Medicare

• Follow-up outpatient care (under Part B) that isn’t supplemented by a PSHB plan

• Delays in billing coordination that result in denials or balance billing

With PSHB in place, these gaps are often closed—but only if Medicare and your PSHB plan are aware of each other and share information correctly.

Coordination of Benefits (COB)

To activate these benefits, you need to:

• Ensure that Medicare is listed as your primary payer

• Confirm that your PSHB plan has your correct Medicare details

• Review your Explanation of Benefits (EOBs) to verify correct billing sequences

If this step is skipped or your coordination is incomplete, you could end up paying costs Medicare doesn’t cover—costs that your PSHB plan might otherwise absorb.

What About Hospice, Home Health, and Long-Term Care?

Medicare Part A covers hospice care only if a doctor certifies that you have a terminal illness and are expected to live six months or less. PSHB plans generally do not duplicate hospice coverage but may offer:

• Additional palliative care services

• Family support and caregiver counseling

• Continued drug coverage during hospice that Medicare may restrict

As for long-term custodial care, neither Medicare Part A nor most PSHB plans cover extended nursing home stays without medical necessity. You’ll need to plan separately for this—perhaps through long-term care insurance or personal savings.

You Could Lose Drug Coverage If You Skip This Step

Under PSHB rules in 2025, Medicare-eligible annuitants and eligible family members are automatically enrolled in a Medicare Part D EGWP drug plan through their PSHB coverage. However, to activate this benefit:

• You must be enrolled in Medicare Part B (except if exempt)

• You must not opt out of the EGWP plan

If you choose to opt out or fail to enroll in Part B when required, you lose access to prescription coverage under PSHB. This decision is not reversible outside of limited re-enrollment periods. The impact is long-term, affecting both cost and access to medications.

Common Misconceptions About Medicare Part A and PSHB

It’s easy to assume you’re fully covered once you enroll in Medicare Part A. Here’s where many make incorrect assumptions:

• Thinking Part A covers outpatient care: It does not. Doctor visits, tests, and outpatient surgery fall under Part B.

• Believing PSHB works independently of Medicare: PSHB benefits depend heavily on Medicare enrollment and coordination.

• Assuming no need for Part B due to Part A enrollment: For full PSHB access, both Parts A and B are essential unless you meet an exemption.

• Not updating coordination of benefits info: If Medicare and PSHB aren’t correctly linked, bills may fall back on you.

Avoiding these pitfalls starts with understanding how the two programs fit together.

Taking the Right Steps in 2025

If you’re already enrolled in PSHB and Medicare Part A, make sure you:

1. Enroll in Medicare Part B unless you’re exempt.

2. Verify your Coordination of Benefits with your PSHB plan.

3. Keep all documents updated—especially during Open Season (November to December).

4. Stay enrolled in the EGWP prescription plan if you’re Medicare-eligible.

5. Review plan materials annually for changes in coinsurance, deductibles, and covered services.

Align Your Benefits—Don’t Assume They’re Aligned Automatically

PSHB and Medicare Part A are powerful tools when used together. But neither one replaces the other. Instead, they’re built to work as a team—if you do your part to align them.

Taking the time to review your plan materials, understand what each component covers, and confirm your eligibility and enrollment can prevent costly gaps in coverage. If you’re unsure about your next steps, it’s time to speak with a professional.

To make sure your benefits are working in sync—and you’re not paying more than necessary—reach out to a licensed agent listed on this website for personalized guidance.