Key Takeaways

• Medicare Part A does cover essential hospital-related services, but you still face deductibles, coinsurance, and time-based limits that can leave you paying out-of-pocket sooner than expected.

• For Postal Service Health Benefits (PSHB) participants, Medicare Part A works best when fully understood and coordinated properly with your PSHB plan—otherwise, gaps in coverage could come with a high price.

What Medicare Part A Offers—And What It Leaves Out

Medicare Part A is often considered the foundation of hospital insurance for those aged 65 and older. It’s earned through payroll taxes during your working years, so for most people, it feels like a benefit that comes “free” upon retirement. But when you dig into the actual coverage, you realize that Part A does not fully insulate you from financial risk—especially if you’re relying on it without careful coordination with your PSHB plan.

Here’s what Medicare Part A actually covers in 2025, and what it means for your out-of-pocket responsibilities.

Hospital Stays: Covered With Conditions

Medicare Part A covers inpatient hospital stays, but not without conditions and costs:

• Deductible: You pay a $1,676 deductible each benefit period.

• Days 1-60: Fully covered after the deductible.

• Days 61-90: You pay $419 per day.

• Days 91 and beyond: You use 60 lifetime reserve days, paying $838 per day.

• After lifetime reserve days: You cover all costs.

A single hospital stay that lasts beyond 60 days could already be costly. But here’s where it gets more complex—a new benefit period begins after 60 days without inpatient care. That means you may face the deductible more than once in a year.

Skilled Nursing Facilities: Coverage Limits Apply

If you’re transferred to a skilled nursing facility (SNF) after a qualifying hospital stay (minimum 3 days inpatient, not observational status), Medicare Part A provides limited coverage:

• Days 1-20: Covered in full.

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

• Beyond 100 days: You pay 100% of the cost.

SNF stays are common after surgery or illness, but the 100-day cap is strict. If your care continues into a longer-term setting, Medicare Part A stops paying—leaving your PSHB plan or personal savings to take over.

Home Health Care: Very Limited Under Part A

Medicare Part A only covers home health care when it follows a hospital or SNF stay. It must be medically necessary and intermittent. Even then, it doesn’t include:

• 24-hour care at home

• Meals

• Homemaker services

• Personal care, like bathing or dressing (unless medically required)

This limited scope can be a surprise when you’re discharged and expecting ongoing support. PSHB plans may fill these gaps, but only if coordinated properly.

Hospice Care: Covered With Conditions

Medicare Part A covers hospice services for individuals with terminal illness and a life expectancy of six months or less, certified by a physician. Covered services include:

• Doctor and nursing services

• Pain management medications

• Bereavement counseling

• Inpatient respite care (short-term relief for caregivers)

However, hospice coverage under Part A comes with conditions: you must agree to give up curative treatments and switch to palliative care. Additionally, you may still be responsible for small copays and prescription drug costs related to pain management.

What You Still Have to Pay

The idea that Medicare Part A is cost-free is a half-truth. In 2025, here are the out-of-pocket costs you may still encounter:

• Deductibles: $1,676 per benefit period for hospital stays.

• Coinsurance: Applies after 60 days inpatient, after 20 days in SNFs, and on certain hospice medications.

• Lifetime Reserve Days: Limited to 60 total over your lifetime—once they’re gone, they don’t renew.

• No coverage: For custodial care, long-term care, or most outpatient services (which are instead covered under Part B).

While PSHB plans can reduce your exposure to some of these costs, you must enroll in Medicare Part A and, where required, Part B, to receive those coordinated benefits. That’s especially critical in 2025, when PSHB integration with Medicare is in full effect.

Why Part A Alone Isn’t Enough With PSHB

As a Postal Service retiree or employee eligible for PSHB, Medicare Part A alone will not protect you from significant healthcare costs. If you don’t enroll in Medicare Part B when required, your PSHB plan might not cover what you expect. Here’s why relying on Part A alone is risky:

Gaps in Hospital and Post-Acute Care Coverage

Even under Part A, hospital stays beyond 60 days and SNF stays beyond 20 days quickly become expensive. Without Medicare Part B, your PSHB plan may impose higher cost-sharing or deny certain benefits.

Loss of Enhanced PSHB Coordination Benefits

Many PSHB plans offer reduced deductibles and coinsurance for members enrolled in both Medicare Parts A and B. In 2025, certain PSHB plans provide:

• Lower out-of-pocket maximums

• Waived or reduced deductibles

• Coordination with Medicare Part D for prescription drugs (via EGWP)

Without full Medicare enrollment, you lose access to these benefits.

Prescription Drug Impacts

In 2025, PSHB plans for Medicare-eligible members include Part D prescription drug coverage. If you opt out of Medicare entirely, including Part A, you may forfeit prescription drug benefits under your PSHB plan.

What Enrollment Looks Like in 2025

Automatic Part A Enrollment

If you’re already receiving Social Security benefits, you’re typically enrolled in Medicare Part A automatically at age 65. You’ll receive your Medicare card in the mail.

If you are not drawing Social Security at 65, you must actively enroll during your Initial Enrollment Period, which starts three months before your 65th birthday and lasts seven months.

Medicare and PSHB Requirements

If you are a Postal Service annuitant and eligible for Medicare, you must enroll in Part B to maintain PSHB coverage in retirement, unless you fall into an exemption group, such as:

• You retired on or before January 1, 2025

• You were age 64 or older as of January 1, 2025

• You live overseas permanently

• You receive care from VA or Indian Health Services

Even though Part A isn’t technically required, skipping it can affect your PSHB plan benefits and drug coverage.

Timing Matters: Know the Benefit Period Rules

One major area of confusion is the difference between a calendar year and a benefit period. Medicare Part A uses benefit periods, not calendar years, for its cost-sharing calculations. Each benefit period starts the day you’re admitted as an inpatient and ends when you haven’t received inpatient or SNF care for 60 days.

That means:

• You could have multiple benefit periods in a single year.

• Each one comes with its own $1,676 deductible.

It’s crucial to understand this rule, especially if you’re managing chronic conditions that could lead to recurring hospitalizations. You may think you’ve “met your deductible for the year,” only to find out you’re starting a new benefit period.

The Role of Your PSHB Plan

Your PSHB plan in 2025 is designed to work alongside Medicare. But it assumes you are enrolled in both Parts A and B. When you are, your PSHB plan often becomes secondary and pays for costs that Medicare doesn’t cover fully.

Depending on the plan, your PSHB benefits may include:

• Payment of remaining hospital coinsurance

• Additional skilled nursing days or full coverage

• Expanded home health services

• Prescription drugs with an annual out-of-pocket cap of $2,000

But without Medicare in place, your PSHB plan could shift into a primary payer role—and cost you more as a result.

What You Can Do to Minimize Risk

To ensure that Medicare Part A works effectively within the PSHB structure, consider the following:

• Enroll in Part A and Part B if you’re Medicare-eligible and not exempt.

• Review your PSHB plan’s brochure to confirm coordination benefits.

• Track your benefit periods to avoid unexpected deductibles.

• Use a licensed agent to help clarify how your Medicare and PSHB benefits interact.

• Plan for long-term care that is not covered by Medicare Part A or PSHB.

These steps can help you reduce out-of-pocket surprises and maximize the value of the benefits you’ve earned.

Medicare Part A: A Good Start, But Not the Whole Picture

Medicare Part A forms the bedrock of your hospital insurance, but it comes with time-limited coverage, strict rules, and substantial gaps. For PSHB members, it’s not enough to rely on Part A alone and assume you’re protected. You need to make sure your coverage aligns with Medicare requirements and your PSHB plan’s coordination policies.

Talk to a licensed agent listed on this website to understand how Part A fits into your overall healthcare strategy and how to prevent unexpected costs in 2025 and beyond.