Key Takeaways

• Medicare Part A is often misunderstood as “free hospital insurance,” but in 2025 it includes substantial cost-sharing, strict rules on coverage periods, and gaps that can leave you responsible for thousands.

• If you’re a Postal Service annuitant or employee approaching Medicare eligibility, you need to understand how your PSHB plan coordinates with Medicare Part A to avoid denied claims and high out-of-pocket expenses.

Why Part A Isn’t As All-Inclusive As You Might Think

Medicare Part A is typically the first piece of the Medicare puzzle people encounter, especially as they approach age 65. It’s commonly described as “premium-free” for those with sufficient work history, which creates the illusion that all hospital-related expenses are automatically covered. Unfortunately, that assumption can be both misleading and financially risky.

As a Postal Service Health Benefits (PSHB) enrollee, you may expect your Part A coverage to seamlessly cover your hospital stay and related services. But the reality is that Part A operates under a set of rules, timeframes, and conditions that can lead to unexpected bills unless you’re informed and proactive.

What Medicare Part A Does Cover

Medicare Part A primarily covers inpatient hospital care, but it also extends to several related services, including:

• Semi-private hospital rooms

• General nursing services

• Meals during inpatient stays

• Inpatient care in critical access hospitals and psychiatric facilities (up to a limit)

• Short-term skilled nursing facility care (if certain criteria are met)

• Home health care under certain conditions

• Hospice care for terminal illnesses

This coverage may seem comprehensive on the surface. But each of these services has limitations based on duration, qualifying conditions, and cost-sharing requirements.

The Benefit Period Trap: Timing Matters

A key detail often overlooked is that Medicare Part A operates based on benefit periods, not calendar years.

• A benefit period starts the day you are admitted to a hospital or skilled nursing facility.

• It ends when you have not received inpatient or skilled nursing care for 60 consecutive days.

• A new benefit period begins with each new admission after that 60-day break.

Why does this matter? Because each new benefit period comes with a new deductible and potential copayments. In 2025, the Part A inpatient hospital deductible is $1,676 per benefit period. You could pay this amount multiple times in one year if you have repeated admissions.

Coinsurance Costs After Day 60

Medicare Part A only covers your inpatient hospital stay in full for the first 60 days of each benefit period. After that, coinsurance applies:

• Days 61–90: You are responsible for $419 per day.

• Days 91–150: Medicare allows you to tap into 60 lifetime reserve days, with a $838 per day coinsurance.

• After lifetime reserve days: You pay 100% of costs.

These out-of-pocket costs add up quickly, especially for those who experience complications or long hospital stays. And once you’ve exhausted your 60 lifetime reserve days, they do not reset.

Skilled Nursing Facility Coverage Has Strict Conditions

Medicare Part A also offers coverage for skilled nursing facility (SNF) care, but only under tightly defined circumstances. To qualify:

• You must have a qualifying 3-day inpatient hospital stay.

• Your SNF care must begin within 30 days of hospital discharge.

• The care must be medically necessary and ordered by a doctor.

Even when approved, this coverage is limited:

• Days 1–20: $0 coinsurance.

• Days 21–100: $209.50 per day in coinsurance.

• After 100 days: You pay all costs.

Many people are surprised to learn that time in an observation unit doesn’t count toward the 3-day inpatient requirement, leaving them with no SNF coverage.

Hospice Care: Covered, But Limited

Part A does include coverage for hospice services if you’re diagnosed with a terminal illness and have a life expectancy of six months or less. This includes nursing care, counseling, medication for pain relief, and respite care.

However, not all costs are waived:

• You may owe a copayment of up to $5 per prescription for outpatient drugs.

• If you require inpatient respite care, 5% of the Medicare-approved amount may be billed to you.

And you must generally give up curative treatments for your condition to qualify for hospice under Part A.

Home Health Care Requirements

Medicare Part A also covers limited home health care if certain criteria are met:

• You must be under a doctor’s care.

• You must be certified as homebound.

• The care must be intermittent and medically necessary.

While home health services can be a helpful alternative to inpatient care, they are not available simply at your request or for general assistance with daily tasks.

How PSHB Coordinates With Medicare Part A

If you are a Postal Service retiree or annuitant, your PSHB plan becomes secondary to Medicare once you enroll. This means:

• Medicare pays first for hospital services.

• PSHB may cover your remaining out-of-pocket costs, depending on your specific plan.

Some PSHB plans waive deductibles or reduce coinsurance for enrollees with Medicare. Others offer additional support, such as lower copayments or coverage of services Medicare doesn’t cover.

But none of these benefits apply if you do not enroll in Medicare Part B when required. Coordination only works as intended when you follow both Medicare and PSHB enrollment timelines.

Timing Your Enrollment Correctly

To avoid gaps in coverage or penalties:

• Initial Enrollment Period (IEP): Begins 3 months before your 65th birthday and ends 3 months after. Enroll in Medicare during this window to avoid delays or late penalties.

• Special Enrollment Period (SEP): Available if you were covered under an employer group health plan. For PSHB annuitants required to enroll in Medicare Part B, the 2024 SEP ran from April 1 to September 30.

Missing these periods can result in higher premiums, denied claims, or even loss of your PSHB prescription drug coverage.

The Risk of Skipping Medicare Part A or B

Some retirees may consider delaying Medicare Part A or B, especially if they believe their PSHB plan provides sufficient coverage. But under the new PSHB rules effective in 2025:

• Medicare Part B enrollment is required for most Medicare-eligible annuitants and their family members.

• Failure to enroll could result in loss of drug coverage and higher medical costs.

The only exemptions apply to those who retired on or before January 1, 2025, are aged 64 or older as of that date, live overseas, or have VA or IHS benefits.

Understanding What Part A Doesn’t Cover

Here’s what Medicare Part A does not pay for:

• Doctor visits during inpatient stays (Part B typically covers these)

• Private-duty nursing

• Television or phone in hospital room (unless included)

• Personal care items such as razors or slippers

• Long-term custodial care

This means if you need extended help with daily living activities in a facility, such as bathing or eating assistance, it won’t be paid for by Part A.

Avoiding Surprise Bills

To protect yourself from unexpected costs:

• Keep track of your benefit period usage to avoid repeated deductibles.

• Confirm whether hospital stays are coded as inpatient or observation, especially for SNF eligibility.

• Maintain accurate records of your Medicare and PSHB enrollments.

• Understand how your PSHB plan coordinates with Medicare and what gaps remain.

Most importantly, schedule time with a licensed agent listed on this website to review your situation and make sure your coverage is optimized for 2025 and beyond.

What This Means for Your Health Planning in 2025

While Medicare Part A offers critical coverage for hospital and facility care, it’s far from complete. As a PSHB enrollee, you have an advantage, but only if you understand how the two systems work together. Failing to enroll in Medicare Part B, misunderstanding benefit periods, or assuming all inpatient services are covered can lead to major financial exposure.

By reviewing your options carefully and working with a licensed agent, you can make sure your health coverage supports your needs without unexpected expenses disrupting your retirement.