Key Takeaways

• Medicare Part A is not entirely free; it comes with deductibles, coinsurance, and coverage limits you need to prepare for—especially as a PSHB enrollee.

• Understanding how Medicare Part A works with your Postal Service Health Benefits (PSHB) plan ensures you avoid coverage gaps and unexpected costs.

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

Medicare Part A is often referred to as hospital insurance. It covers inpatient care in hospitals, skilled nursing facility care, hospice care, and some home health care services. But the coverage is limited by specific durations and cost-sharing requirements. Here’s how it works in 2025:

• Inpatient Hospital Deductible: $1,676 per benefit period.

• Coinsurance for Hospital Stays:

  • Days 1-60: $0 (after deductible)

  • Days 61-90: $419 per day

  • Days 91 and beyond: $838 per day for lifetime reserve days (you only get 60 of these for your entire life)

• Skilled Nursing Facility Care: Covered up to 100 days after a qualifying 3-day hospital stay, but:

  • Days 1-20: $0

  • Days 21-100: $209.50 per day

  • After 100 days: You pay all costs

The takeaway is simple: if your hospital stay is lengthy, or you need extended care in a facility, your out-of-pocket exposure under Medicare Part A alone can add up fast.

Do You Really Get Part A for Free?

For most people, Medicare Part A is premium-free if you or your spouse paid Medicare taxes for at least 40 quarters (10 years). But if you haven’t met that threshold:

• If you worked 30-39 quarters: You pay $284/month.

• If you worked fewer than 30 quarters: You pay $518/month.

Even if you qualify for premium-free Part A, that does not mean it’s cost-free. Deductibles and coinsurance still apply. And that “no premium” status only covers the basic Part A coverage—it doesn’t waive cost-sharing.

What the PSHB Program Adds to the Equation

The new Postal Service Health Benefits (PSHB) program, which fully replaced FEHB for postal employees and annuitants in 2025, is designed to work in coordination with Medicare. If you’re 65 or older and retired, or if you’re Medicare-eligible for another reason, enrolling in Medicare Part A (and B) is essential to keep your PSHB benefits functioning properly.

Here’s what PSHB plans may offer when you pair them with Medicare Part A:

• Waived or lowered deductibles and coinsurance for inpatient stays

• Integrated pharmacy coverage under a Medicare Part D EGWP

• Simplified claims coordination between Medicare and your PSHB plan

That coordination only works if you’re enrolled in Medicare. Without Part A, your PSHB plan becomes your primary payer, and you lose out on cost-sharing protections that Medicare would provide.

When Coverage Runs Out

The limits of Medicare Part A coverage are clearly defined:

• Hospital stays over 90 days dip into lifetime reserve days

• Skilled nursing care caps out after 100 days per benefit period

• Hospice and home health care services must meet strict eligibility

Your PSHB plan may pick up some of these costs, but only if you’re enrolled in both Medicare and the PSHB plan. If you opt out of Medicare, you’re not just absorbing more risk—you’re potentially paying higher out-of-pocket costs through PSHB, too.

Why You Can’t Rely on Part A Alone

Even if you paid into the system and receive premium-free Part A, relying on it alone is risky. It doesn’t cover:

• Outpatient care (you need Part B for this)

• Routine dental, vision, or hearing services

• Prescription drugs (that’s where Part D or PSHB’s EGWP comes in)

• Long-term custodial care

• Services outside defined benefit periods

If you only have Part A, and skip Part B, you’re expected to pay the full cost for outpatient doctor visits, tests, and preventive care. And without drug coverage, even basic medications become expensive.

PSHB plans are structured to complement Medicare. That structure starts to fall apart when Medicare enrollment is incomplete.

Enrollment Timing Matters

You’re eligible to enroll in Medicare Part A starting three months before the month you turn 65, continuing through the month of your birthday, and ending three months after. That’s a 7-month Initial Enrollment Period.

If you miss that window, you may have to wait until the General Enrollment Period (January 1 – March 31), with coverage beginning July 1. During that time, you may lack key benefits, and late penalties could apply to Part B—although not typically to Part A.

For postal retirees in the PSHB program, failure to enroll on time can trigger complications with plan coordination, especially if Medicare Part B is also skipped.

What If You’re Still Working?

If you’re an active USPS employee past age 65, you may delay Part B without penalty. But Medicare Part A often kicks in automatically at age 65 if you’re already collecting Social Security. It becomes secondary to your PSHB plan.

However, when you retire, Medicare becomes primary. If you failed to enroll in Part A or B before retirement, your PSHB coverage could become more expensive and less efficient.

The $1,676 Deductible: Who Pays?

Every hospital admission under Medicare Part A comes with a new deductible of $1,676 per benefit period in 2025. A benefit period begins the day you’re admitted and ends after you’ve been out of a hospital or skilled nursing facility for 60 days in a row. That means:

• You could pay this deductible more than once in a year

• There is no annual limit on how many benefit periods can occur

PSHB plans may cover some or all of this deductible—but only if you’re properly enrolled in Medicare. If you aren’t, that cost might fall entirely on you.

What Your PSHB Plan Might Require

As of 2025, Medicare Part B is required for continued PSHB coverage in most cases if you’re Medicare-eligible. Part A is not mandatory, but strongly encouraged.

Your PSHB plan will still operate without Part A, but your share of costs will likely increase. You may also lose access to enhanced coordination benefits. For example:

• Deductibles and coinsurance may not be waived

• Prescription drug integration through EGWP may be disrupted

• Claims processing may be delayed or denied due to primary/secondary payer confusion

Hospital Stay Scenarios

If you’re hospitalized in 2025 for a procedure that requires a 5-day stay, here’s how costs may break down under different coverage configurations:

• With Medicare Part A + PSHB: Medicare pays first, PSHB covers most or all of the remainder.

• With PSHB alone: You could face the full deductible and daily coinsurance costs depending on your plan’s inpatient coverage rules.

While this doesn’t represent every situation, it shows how much financial protection you lose when you rely solely on PSHB without Medicare.

Don’t Confuse Coverage with Certainty

It’s a common mistake to assume that just because you have Medicare Part A, you’re fully protected. Or to believe that PSHB will pick up any slack. But the fine print tells a different story:

• Cost-sharing isn’t waived unless both systems work together

• Coverage limits exist even under Medicare

• Delays in enrollment create administrative and financial headaches

In 2025, the combination of Medicare and PSHB is what delivers robust protection. One without the other is incomplete.

Why a Medicare Enrollment Strategy Should Be Part of Your PSHB Plan

If you are a postal retiree or planning to retire soon, don’t just look at PSHB enrollment as a checkbox. Think of it as part of your broader Medicare strategy.

Evaluate:

• Your work history to confirm Part A eligibility

• Your enrollment timelines to avoid late penalties

• Whether you’re maximizing coordination benefits between Medicare and PSHB

Delaying or skipping Medicare enrollment may seem like a way to save in the short term, but it often backfires. Higher costs, confusion during claims, and loss of access to enhanced drug and hospital coverage are just a few of the risks.

Understanding Medicare Part A and PSHB Together Protects You

While the phrase “premium-free” gets a lot of attention, it’s what happens after you’re admitted to a hospital that determines the real cost of Medicare Part A. And when it comes to your PSHB plan, enrolling in Medicare isn’t optional if you want full protection—it’s foundational.

For clarity on what coverage you need and how to align Medicare with your PSHB benefits, speak with a licensed agent listed on this website. They can help you avoid common enrollment mistakes and make choices that safeguard both your health and finances.