Key Takeaways

• Medicare Part A is not free and does not cover all hospital-related costs. Understanding its limitations is essential for effective healthcare planning.

• Postal retirees enrolled in PSHB plans may reduce their hospital cost burden when also enrolled in Medicare Part A and Part B—but assuming full coverage can leave you with surprise bills.

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

Medicare Part A provides inpatient hospital coverage, but that doesn’t mean it pays every bill. Many people mistakenly believe that if they have Part A, they’re fully protected in the hospital. That’s not the case.

Here’s what Part A does cover:

• Inpatient hospital stays (after formal admission by a doctor)

• Skilled nursing facility (SNF) care after a qualifying hospital stay

• Some home health care services

• Hospice care

But each of these categories has limits—often based on duration, setting, or service type. And those limits are where the surprises begin.

Why the Hospital Deductible Is Just the Start

In 2025, the Medicare Part A deductible is $1,676 per benefit period. That means you pay this amount each time you start a new benefit period, not annually. A benefit period begins the day you’re admitted as an inpatient and ends when you haven’t received inpatient or skilled nursing care for 60 days in a row.

That $1,676 can hit multiple times a year if you’re hospitalized more than once with gaps in between.

Beyond the deductible, there are daily coinsurance charges:

• Days 1–60: $0 coinsurance (once deductible is met)

• Days 61–90: $419 per day

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

After you use your 60 lifetime reserve days, Medicare stops paying. You’re responsible for the full cost.

Skilled Nursing Facility Care: Not as Broad as It Seems

Many people assume they can go straight to a skilled nursing facility (SNF) after surgery or hospitalization and have Medicare Part A cover it entirely. That’s only partially true.

To qualify for SNF coverage under Part A, all of the following must apply:

• You were admitted to a hospital as an inpatient for at least 3 consecutive days (not including the discharge day).

• You enter the SNF within 30 days of leaving the hospital.

• You require skilled nursing care related to the hospital condition.

Even when these conditions are met, coverage is limited:

• Days 1–20: $0 coinsurance

• Days 21–100: $209.50 daily coinsurance

• After 100 days: You pay all costs

Many hospital stays are now classified as “observation,” not inpatient. Observation status doesn’t count toward the 3-day requirement, leaving you with no SNF coverage.

Observation Status: A Costly Classification

A significant gap in Part A coverage arises when a hospital classifies you as an outpatient under “observation status,” even if you stay overnight. This classification has financial consequences.

• Observation stays are covered under Medicare Part B, not Part A.

• Any drugs administered in the hospital may not be covered—or may be billed as self-administered.

• Observation days don’t count toward the 3-day requirement for SNF care under Part A.

As a result, you could face:

• A full hospital bill for outpatient services

• No skilled nursing facility coverage

• Higher out-of-pocket drug costs while in the hospital

Home Health and Hospice Limitations

Medicare Part A offers some home health and hospice services, but they are not unlimited.

Home health care is only covered if:

• You’re homebound and under a doctor’s care

• Services are medically necessary and intermittent

• The provider is Medicare-certified

Covered services may include physical therapy, nursing care, and speech therapy—but custodial care (like help with bathing or eating) is not covered.

Hospice care under Part A requires you to:

• Have a terminal illness with a prognosis of 6 months or less

• Agree to comfort-focused (palliative) treatment instead of curative

Hospice does not cover:

• Room and board at a facility (unless it’s for respite or crisis care)

• Treatment aimed at curing the illness

PSHB Integration with Medicare Part A

If you’re a Postal Service retiree or annuitant, you may be enrolled in a PSHB plan. While these plans often work in tandem with Medicare, assuming Part A will handle all your hospital expenses is risky.

Here’s how PSHB typically coordinates with Medicare Part A:

• Primary vs. Secondary Payer: When you have both PSHB and Medicare, Medicare generally pays first, and PSHB covers remaining eligible costs.

• Reduced Cost Sharing: Some PSHB plans waive or reduce deductibles, coinsurance, and copays for members who enroll in both Part A and Part B.

• Prescription Coverage: Hospital-administered drugs not covered by Part A might still be billed through your PSHB plan’s pharmacy benefit.

To get the most benefit, Part B enrollment is often essential. Part A alone may leave large gaps that your PSHB plan won’t cover unless Part B is also in place.

Costs You Still May Face Even with Both Part A and PSHB

Even if you’re covered by both Medicare Part A and a PSHB plan, there are still out-of-pocket costs to consider:

• Hospital deductibles and coinsurance (if your PSHB plan doesn’t fully wrap around Medicare)

• Observation status expenses billed under Part B (which Part A doesn’t cover)

• SNF stays not meeting Medicare’s qualifying criteria

• Non-covered hospital services (e.g., private rooms, televisions, long-term custodial care)

Your PSHB plan may help, but it’s not guaranteed to cover all of these gaps unless you’re enrolled in both Part A and Part B.

Why Timing and Classification Matter

Hospital bills under Medicare Part A can escalate quickly depending on the timing of your admission and classification:

• Multiple hospital stays in a year: You may face the $1,676 deductible multiple times.

• Stay longer than 60 days: Daily coinsurance kicks in.

• Re-hospitalized after 60 days: A new benefit period starts, with a new deductible.

• Observation vs. inpatient: Only inpatient status triggers Part A.

These details, while technical, have major financial implications.

What to Do Before, During, and After a Hospital Stay

Being proactive can prevent Medicare Part A surprises:

Before hospitalization:

• Confirm that your PSHB plan is active and understand how it coordinates with Medicare

• If you’re eligible for Medicare Part B and haven’t enrolled, strongly consider doing so

During hospitalization:

• Ask if you’ve been formally admitted as an inpatient

• Request a written notice of your admission status

• Clarify what services are covered and which are not

After discharge:

• Review your hospital bill and Medicare Summary Notice (MSN)

• Confirm whether your stay qualifies for SNF care

• Contact your PSHB plan to coordinate any secondary payments

How to Get Clear on Your Coverage

Avoiding assumptions about Medicare Part A means asking the right questions and keeping documentation:

• Don’t rely solely on hospital staff to explain your Medicare status

• Be aware of your benefit periods and whether they’ve reset

• Know your rights to appeal observation status and denied SNF claims

Understanding how your PSHB plan fits into this picture is just as important. Many plans offer help lines or benefits advisors to clarify how your plan interacts with Medicare.

Hospital Coverage Isn’t Automatic Protection

Believing Medicare Part A covers everything in the hospital is a costly mistake. Even with a strong PSHB plan, you need to understand the mechanics of how Medicare defines care types, cost-sharing periods, and eligibility rules.

If you haven’t enrolled in Medicare Part B, you may be missing essential wraparound coverage that helps your PSHB plan work as intended. And if you don’t check how you’re classified during a hospital stay, you may be stuck paying bills Medicare doesn’t cover.

Take action now to get in touch with a licensed agent listed on this website. They can help you compare PSHB plan details, understand your Medicare coordination, and make sure you’re prepared—before the next hospital bill arrives.