Key Takeaways

• Medicare Part A, while typically premium-free for most Postal Service annuitants, still requires understanding how it coordinates with PSHB in 2025.

• If you qualify for Medicare, PSHB plans often assume you are enrolled in both Parts A and B—and your costs and coverage may be affected if you’re not.

Understanding the Basics of Medicare Part A

Medicare Part A is hospital insurance. It helps cover inpatient hospital care, skilled nursing facility care, hospice, and some home health services. For most Postal Service retirees, Medicare Part A comes without a monthly premium—as long as you or your spouse worked and paid Medicare taxes for at least 40 quarters (about 10 years).

In 2025, the inpatient hospital deductible under Part A is $1,676 per benefit period. Coinsurance applies after day 60 in a hospital stay, and skilled nursing facility coinsurance kicks in after 20 days. These are critical figures to keep in mind as you consider how Medicare works with PSHB.

PSHB Plans Expect You to Enroll in Medicare Part A

The Postal Service Health Benefits (PSHB) Program was launched in 2025. It replaces FEHB for postal employees, retirees, and eligible family members. One major shift with PSHB is its stronger alignment with Medicare, particularly Parts A and B.

If you are eligible for Medicare, PSHB plans are built to assume you have it. This assumption impacts cost-sharing, benefits coordination, and even your access to certain plan features. In short, skipping Medicare Part A—even if it’s technically optional—can lead to gaps in coverage and higher out-of-pocket costs.

Why PSHB Plans Prefer Medicare as Primary

When you are enrolled in both Medicare and PSHB, Medicare typically pays first (primary), and your PSHB plan acts as secondary coverage. This layered payment structure often reduces your overall costs.

For example:

• Medicare Part A covers inpatient stays first.

• Your PSHB plan may cover remaining costs like coinsurance or services not fully covered by Medicare.

Without Medicare, the PSHB plan becomes solely responsible for hospital-related costs, which could mean more out-of-pocket spending for you.

When and How to Enroll in Medicare Part A

If you’re approaching age 65 in 2025, you have a 7-month Initial Enrollment Period (IEP) to sign up for Medicare. It includes:

• The 3 months before your 65th birthday

• The month of your birthday

• The 3 months after your birthday

If you’re already receiving Social Security benefits, enrollment in Part A is automatic. Otherwise, you’ll need to enroll through the Social Security Administration.

Special Rules for Postal Annuitants

If you’re a retired Postal Service worker or annuitant and eligible for Medicare, PSHB requires enrollment in Medicare Part B unless you’re exempt. Even though Part A is usually free, it’s still critical to enroll because PSHB plans coordinate benefits under the assumption that you have it.

Failing to enroll in Medicare Part A when eligible doesn’t trigger penalties—but it could make your PSHB plan costlier and less efficient.

What Medicare Part A Actually Covers

Medicare Part A coverage includes:

• Inpatient hospital stays: Covers semi-private rooms, meals, general nursing, and drugs as part of your inpatient treatment.

• Skilled nursing facility care: After a qualifying hospital stay of 3 days, covers up to 100 days in a skilled nursing facility (with cost-sharing starting on day 21).

• Hospice care: For terminal illness, covers pain relief, symptom management, and supportive services.

• Limited home health care: Covers intermittent skilled nursing care and physical therapy, under strict conditions.

Coverage Limits to Know

Medicare Part A is not unlimited. In 2025:

• You pay a deductible of $1,676 per benefit period.

• After 60 days in the hospital, you pay daily coinsurance: $419 per day for days 61–90.

• Beyond day 90, you use up to 60 lifetime reserve days with coinsurance of $838 per day.

These figures matter when evaluating how well PSHB fills in gaps and whether your secondary coverage is sufficient.

Coordinating PSHB with Medicare Part A

When you have both PSHB and Medicare Part A, coordination of benefits kicks in automatically. Medicare processes your claims first. Then, your PSHB plan reviews what’s left unpaid and determines if it covers the remaining balance.

What This Coordination Means for You

• Lower out-of-pocket costs: You may avoid or reduce deductibles, copayments, and coinsurance.

• Access to more providers: Some providers only accept Medicare or have lower rates under Medicare.

• Smoother billing: Claims flow electronically between Medicare and your PSHB plan, reducing paperwork for you.

If You Delay or Decline Medicare Part A

Although Medicare Part A doesn’t impose late penalties if you delay enrollment, there are still risks:

• Higher medical bills: If you’re hospitalized and don’t have Medicare, your PSHB plan may not cover the full cost.

• Possible denial of services: Some services may only be covered if Medicare pays first.

• Lack of coordination: Without Part A, your PSHB plan has to operate as primary insurance—often with less favorable cost-sharing.

Important: You May Not Be Able to Re-Enroll Easily

If you voluntarily delay Medicare Part A, re-enrollment outside your Initial Enrollment Period could be limited unless you qualify for a Special Enrollment Period (SEP).

Medicare Advantage Doesn’t Replace Part A

Some postal retirees may also consider Medicare Advantage plans. However, PSHB plans are designed to coordinate with Original Medicare—Part A and Part B.

Even if you enroll in a Medicare Advantage plan, you are still considered to have Medicare Part A. That’s because Medicare Advantage is not a replacement for entitlement—it’s a delivery method.

But be cautious: Using Medicare Advantage alongside PSHB can be complicated and may result in duplication of coverage or unexpected claim denials if plans don’t align.

Timing Your Enrollment for Maximum Benefit

The best strategy is to align your Medicare enrollment with your PSHB coverage activation:

• If you’re turning 65, enroll in Medicare Part A during your Initial Enrollment Period.

• If you’re retiring and losing active employee status, coordinate Medicare start dates to avoid gaps.

• If you already have Medicare from a disability, ensure your PSHB plan knows and adjusts its coordination rules accordingly.

What Happens If You’re Not Eligible for Free Part A?

Some postal workers or spouses may not qualify for premium-free Medicare Part A. If you have fewer than 40 quarters of Medicare-covered employment, you might pay up to $518/month in 2025.

In this case, weigh the cost carefully against:

• The risk of being fully reliant on PSHB

• The potential gaps in hospital coverage

• The out-of-pocket savings from proper coordination

Some choose to buy into Part A, even with the premium, to ensure full PSHB coordination. Others may be exempt from Part B enrollment under PSHB if the premium is a hardship. But that exemption does not apply to Part A.

Reviewing Your Benefits Annually

Open Season from November to December each year is your chance to review your PSHB plan. If your healthcare needs or Medicare status change, this is your window to adjust coverage.

• Reassess whether your Medicare enrollment status is up to date.

• Confirm your PSHB plan still meets your needs.

• Review whether your providers accept both Medicare and your PSHB plan.

Don’t miss this opportunity to ensure you’re maximizing your health benefits through coordination.

Why Medicare Part A Still Matters in the PSHB Era

Although PSHB provides strong health insurance on its own, it works best when paired with Medicare. Part A is a foundational piece of this equation. If you’re eligible and don’t enroll, you’re likely leaving benefits and savings on the table.

Even though it may feel redundant, the layered protection of Medicare and PSHB means:

• Better cost protection

• Broader access to services

• Smoother claim processing

To make the most of your benefits, take the time to enroll in Medicare Part A on schedule—and let your PSHB plan do what it’s designed to do: work in tandem with Medicare.

Make the Right Choice for Your Coverage

In 2025, PSHB plans are tightly linked with Medicare, and your enrollment choices directly impact how well your coverage works. Medicare Part A may be premium-free, but ignoring it can cost you far more in missed benefits and unexpected expenses.

If you’re unsure how to time your enrollment or coordinate coverage, reach out to a licensed insurance agent listed on this website for help. They can walk you through your options based on your retirement status, Medicare eligibility, and PSHB plan selection.