Key Takeaways

• Medicare Part A offers essential hospital insurance, but by itself, it does not cover all the costs you may face during an inpatient stay. Even when combined with PSHB coverage, some gaps remain that can surprise many Postal retirees.

• Understanding how Medicare Part A coordinates with your PSHB plan—and where your out-of-pocket costs might still arise—is key to making sure you’re protected during a hospital stay.

What Medicare Part A Actually Covers in 2025

Medicare Part A is the part of Original Medicare that covers inpatient hospital care, skilled nursing facility stays, hospice care, and some home health services. In 2025, it continues to play a central role for Medicare-eligible Postal retirees, but its benefits come with specific limits:

• Hospital Deductible: $1,676 per benefit period

• Coinsurance:

  • Days 1–60: $0

  • Days 61–90: $419 per day

  • Days 91 and beyond: $838 per day (up to 60 lifetime reserve days)

• Skilled Nursing Facility Care: First 20 days are fully covered; days 21–100 require $209.50 per day

These figures are for 2025 and reflect cost-sharing obligations that retirees must prepare for, even with Medicare Part A in place.

What PSHB Covers—And What It Doesn’t

The Postal Service Health Benefits (PSHB) Program provides broader coverage for active and retired postal workers starting in 2025, replacing FEHB for postal employees. For Medicare-eligible annuitants, PSHB plans coordinate with Medicare Part A and B to provide additional protection.

In most cases, when you have both Medicare and a PSHB plan:

• Medicare pays first

• PSHB pays second

• You may still owe any remaining costs not covered by either

PSHB plans can help cover some costs Medicare Part A doesn’t, such as deductibles and coinsurance—but this depends on the specific PSHB plan and whether you are also enrolled in Medicare Part B. Not all cost-sharing is eliminated just because you have both coverages.

Where the Coverage Gaps Begin to Appear

1. Hospital Deductibles Not Always Covered in Full

If you are enrolled in Medicare Part A only and not Part B, many PSHB plans may not pick up the full $1,676 hospital deductible. Some plans require you to have both Part A and Part B before they offer secondary coverage. This can leave you exposed to the full deductible amount each benefit period.

2. Coinsurance After 60 Days of Hospitalization

Extended hospital stays (beyond 60 days) quickly rack up coinsurance. Medicare only fully covers the first 60 days. Starting on day 61, you owe $419 per day. While some PSHB plans may absorb some of that, others may not unless you have Medicare Part B in place too.

3. Lifetime Reserve Days

Once you’ve used up your 60 lifetime reserve days under Medicare Part A, you are responsible for all hospital costs. PSHB plans vary in how much additional protection they offer here, but there’s no guarantee they’ll cover 100% of these expenses.

4. Out-of-Network Hospitals

If you are hospitalized at a facility that is out-of-network for your PSHB plan, your costs could be higher. Even if Medicare Part A covers the hospital stay, PSHB may limit its benefits based on provider contracts.

5. Observation Status Instead of Admission

Medicare Part A only covers inpatient admissions—not observation stays, even if you spend the night in a hospital bed. If your status is considered observation, Medicare Part B applies instead. If you do not have Part B, your PSHB plan might treat this as outpatient care, subject to different (and often higher) copays or coinsurance.

6. Skilled Nursing Facility Costs

Medicare Part A covers the first 20 days in a skilled nursing facility after a qualifying hospital stay. After that, you are responsible for $209.50 per day (2025 amount) up to day 100. PSHB coverage may help, but only if your plan includes coordination with Medicare Part A and B. Again, without Part B, you may not be fully covered.

Why Medicare Part B Matters in Hospital Scenarios

Many Postal retirees believe Medicare Part A alone is sufficient for hospital coverage, especially if they have PSHB. But in 2025, PSHB plans often tie their secondary benefits to having both Medicare Part A and Part B. This includes coverage for:

• Physician services received during hospitalization

• Lab tests, diagnostic imaging, and specialists’ fees

• Observation care or ER services leading to inpatient admission

Without Part B, your PSHB plan may apply its standard deductible, copayments, and coinsurance, which can be substantial. Some PSHB plans also reduce or waive certain costs entirely when both Medicare Parts A and B are active.

Understanding the Coordination Rules

Knowing who pays first helps you estimate your exposure:

• If you’re retired and enrolled in Medicare, Medicare pays first, and your PSHB plan is secondary.

• If you’re still employed and covered by PSHB through your job, PSHB pays first, and Medicare is secondary.

These coordination rules matter because they affect what services are covered, how much you pay, and when prior authorization or referrals may be required.

Avoiding Surprise Costs With Proper Planning

Hospital costs can escalate quickly when assumptions about coverage don’t align with reality. Here’s how to avoid common pitfalls:

• Enroll in Medicare Part B when first eligible unless you have a specific exemption (such as retirement before January 1, 2025)

• Check how your specific PSHB plan handles coordination with Medicare—some plans reduce cost-sharing only when Parts A and B are active

• Confirm network status of the hospital and attending providers before planned procedures

• Understand the benefit period rules—Medicare’s benefit periods reset after 60 days without inpatient care, meaning you may face another deductible soon after discharge

• Ask for inpatient admission status in writing—especially if you’re held for observation, since this affects which part of Medicare is billed

Important Deadlines and Exceptions in 2025

In 2025, Medicare-eligible annuitants and family members are required to enroll in Medicare Part B to keep their full PSHB benefits—unless they:

• Retired on or before January 1, 2025, and are not currently enrolled in Part B

• Were age 64 or older as of January 1, 2025

• Live overseas full-time

• Receive care through the VA or Indian Health Service

Failing to meet these conditions or refusing Part B when required may result in loss of PSHB drug coverage and limited benefits.

Prescription Drug Coverage Is Also Affected

Although not part of hospital insurance, your inpatient experience often involves prescriptions. PSHB includes Medicare Part D through an Employer Group Waiver Plan (EGWP), but to remain eligible, you must stay enrolled in both PSHB and Medicare Part B (if required).

Dropping Part B—intentionally or by accident—could trigger a loss of drug coverage, including:

• Hospital-administered drugs

• Post-discharge medications filled at retail or mail-order pharmacies

• Coverage under the $2,000 out-of-pocket cap in 2025

Coverage Gaps Aren’t Always Obvious

Many retirees discover these coverage gaps too late—typically after a costly hospital stay. The most common mistake is assuming that PSHB automatically fills all holes left by Medicare Part A. In reality, coverage varies significantly depending on your PSHB plan, whether you have Medicare Part B, and where you receive care.

Even having both Part A and PSHB doesn’t guarantee you’ll avoid all costs:

• Emergency room visits before admission may not be covered under Part A

• Doctor fees during inpatient care may fall under Part B

• Follow-up outpatient treatments may require Part B or face higher PSHB cost-sharing

These are the reasons why reviewing your plan and Medicare status is not a one-time task—it should be part of your annual benefits review.

What You Can Do Next to Stay Protected

Hospital coverage under Medicare Part A is foundational, but not foolproof. PSHB adds value, but only when it’s coordinated properly—and only if you’ve met your responsibilities as a retiree. In 2025, those responsibilities include:

• Enrolling in Medicare Part B if you’re required to

• Reviewing your PSHB plan’s benefits and limitations annually

• Understanding the cost-sharing that applies to extended hospitalizations, skilled nursing care, and observation stays

Failing to connect the dots between Medicare and PSHB could lead to gaps in care and unexpected expenses. It’s worth taking the time now to learn where your plan protects you—and where it may fall short.

Align Your Coverage Before the Bills Arrive

Hospital costs under Medicare Part A are not automatic protection from financial risk—especially when you rely on PSHB to pick up the rest. If you haven’t already reviewed your plan documents or confirmed whether Medicare Part B is required in your situation, now is the time.

To avoid high deductibles, coinsurance, or denied claims, speak with a licensed agent listed on this website. They can walk you through what your PSHB plan does—and doesn’t—cover in tandem with Medicare. Being proactive today means fewer surprises tomorrow.