Key Takeaways

• While Medicare Part A is often considered premium-free, it comes with significant out-of-pocket costs if you need extended hospital care or specialized services.

• As a Postal Service Health Benefits (PSHB) enrollee, understanding how Medicare Part A integrates with your PSHB plan is essential to avoid gaps in coverage and unexpected bills.

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

Medicare Part A is generally described as hospital insurance. For most people, particularly those who paid Medicare taxes for at least 40 quarters, it doesn’t require a monthly premium. But that doesn’t mean it’s truly free, especially when it comes to extended care or specific medical scenarios.

Here’s what Medicare Part A currently covers in 2025:

• Inpatient hospital stays

• Skilled nursing facility (SNF) care (with strict conditions)

• Hospice care

• Limited home health services

But here’s the catch: each of these services comes with conditions, limitations, and significant cost-sharing.

The 2025 Cost Structure for Medicare Part A

Even if you qualify for Part A without paying a monthly premium, you still face the following out-of-pocket costs:

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

• Daily coinsurance for extended hospital stays:

  • Days 1–60: $0 (after deductible)

  • Days 61–90: $419 per day

  • Days 91 and beyond (lifetime reserve days): $838 per day

  • After lifetime reserve days are used: all costs are your responsibility

• Skilled nursing facility care:

  • Days 1–20: $0

  • Days 21–100: $209.50 per day

  • Beyond 100 days: no coverage at all

These are not small expenses. A 90-day hospital stay could leave you paying over $10,000 out of pocket, even with Part A. And once your benefit period resets—which occurs after 60 days out of the hospital—you’ll owe a new deductible.

The Misleading Comfort of the Term “Benefit Period”

Unlike a calendar year or monthly billing cycle, a Medicare “benefit period” begins when you’re admitted as an inpatient and ends when you’ve been out of the hospital or SNF for 60 consecutive days. There’s no limit to the number of benefit periods you can have in a year.

That means you could end up paying the $1,676 deductible more than once in a single year—every time a new benefit period begins. For those dealing with recurring or chronic health issues, this can quickly drain your savings.

Limited Skilled Nursing Facility Coverage

Many people assume Medicare will pay for nursing home care. But this is only partly true and only under specific circumstances:

• You must have a qualifying hospital stay of at least three consecutive inpatient days.

• The SNF care must begin within 30 days of your discharge.

• The care must be medically necessary and not custodial in nature.

Even then, Medicare only covers 100 days per benefit period, and only the first 20 days are fully covered. After that, the daily rate becomes your responsibility.

Home Health Care and Hospice: Only When Very Specific Criteria Are Met

Medicare Part A may cover limited home health care if:

• You are homebound

• You need skilled care (not personal or custodial care)

• Your doctor certifies the need

And for hospice, eligibility requires:

• A terminal illness certified by a physician

• An agreement to forgo curative treatments

Even with hospice, some drugs or respite care may require copayments or cost-sharing.

What PSHB Adds—And What You Still Need to Watch

Your PSHB plan is designed to complement Medicare, especially once you retire. If you’re enrolled in both PSHB and Medicare Part A, your plan can cover some of the costs that Part A doesn’t, such as:

• Coinsurance for extended hospital stays

• Additional SNF coverage beyond what Medicare allows

• Reduced or waived deductibles (in certain plans)

However, the integration depends heavily on whether you also enroll in Medicare Part B. PSHB plans typically coordinate better when both Parts A and B are active.

Why Medicare Part B Enrollment Often Matters for PSHB Coordination

If you’re eligible for Medicare and stay enrolled in a PSHB plan without enrolling in Part B, your plan may act as the primary payer. This can lead to higher out-of-pocket costs because:

• Part A only covers hospital-related costs

• PSHB plans often assume Medicare is paying first for outpatient services

In 2025, certain PSHB plans offer better benefits for enrollees who are also enrolled in both Parts A and B—including reduced cost-sharing, lower copayments, and even Part B premium reimbursements. But these features may not apply if you only have Part A.

How Benefit Periods and Hospital Readmissions Lead to Financial Surprises

Let’s say you’re admitted for surgery, discharged, and then readmitted 65 days later. That triggers a new benefit period—and a new $1,676 deductible. If the readmission is related to a chronic condition, and you have multiple admissions within the same year, your total annual out-of-pocket hospital costs could skyrocket.

PSHB plans may help buffer these expenses, but only if you’ve selected a plan with supplemental coverage features that reduce hospital copayments or deductibles. Otherwise, you’re responsible for covering any leftover costs Medicare doesn’t pay.

Medicare Part A and the PSHB Prescription Drug Benefit

If you’re eligible for Medicare and stay enrolled in a PSHB plan, your drug coverage comes through a Medicare Part D Employer Group Waiver Plan (EGWP) integrated into your PSHB plan. This includes:

• A $2,000 annual cap on out-of-pocket drug expenses (2025)

• Expanded access to pharmacy networks

• Automatic enrollment if you’re Medicare-eligible

However, you must maintain Medicare Part B enrollment to retain these drug benefits. If you only have Part A, you risk losing this key benefit.

Understanding Lifetime Reserve Days

Medicare Part A provides 60 lifetime reserve days for hospital stays that exceed 90 days within a benefit period. These are one-time use: once they’re gone, they’re gone.

• For each lifetime reserve day used, you pay $838 per day in 2025.

• After using all 60 lifetime days, you pay 100% of the hospital bill beyond day 90 of any future benefit period.

This is another area where PSHB coverage may reduce financial stress—if your plan offers extended hospital stay coverage. Be sure to review your specific plan brochure to see how these costs are handled.

Coordination Issues That Could Affect Billing

When Medicare is your primary insurer and PSHB is secondary, billing should ideally flow from Medicare to your PSHB plan. But if:

• You don’t enroll in Medicare Part B

• You decline the integrated drug coverage

• You see an out-of-network provider

You could face billing delays or rejected claims. It’s essential to confirm with your PSHB carrier how coverage coordinates in such scenarios.

Don’t Overlook the 60-Day Reset Rule

The 60-day rule for benefit period resets may seem like a technicality, but it has a very real impact on your costs. Each new benefit period restarts the $1,676 hospital deductible—and resets SNF coverage days.

Many PSHB members are caught off guard by this, assuming their coverage restarts annually like private insurance. In fact, you could experience three or more benefit periods—and associated deductibles—in a single year.

Planning for Extended Illness or Recovery

If you’re anticipating a major surgery, long-term rehabilitation, or dealing with a progressive illness, it’s critical to understand:

• How many days are covered under Medicare Part A

• When your PSHB plan begins to offer secondary coverage

• Which services might require prior authorization or provider networks

Without this planning, you might end up with large hospital bills that neither Medicare nor your PSHB plan fully covers.

How to Protect Yourself Financially

To better manage the real costs behind Medicare Part A, consider the following:

• Review your PSHB plan brochure carefully to understand hospital coverage and coordination with Medicare.

• Enroll in Medicare Part B if you are eligible, as many PSHB plans enhance benefits when both Parts A and B are active.

• Keep track of your benefit period start and end dates to anticipate possible deductible resets.

• Reach out to a licensed agent listed on this website to review your current plan and discuss options.

Staying Informed Helps You Stay Protected

Understanding Medicare Part A costs in 2025—especially the often-overlooked components like benefit period resets, SNF limitations, and lifetime reserve days—is crucial for Postal Service Health Benefits members. While PSHB plans offer an added layer of financial protection, that protection is only effective when you fully understand how the systems work together.

Speak with a licensed agent listed on this website for personalized advice. They can help you make informed decisions about enrollment, coverage coordination, and your out-of-pocket risk.