Key Takeaways

• Medicare Part A has strict coverage limits and can leave you responsible for major out-of-pocket hospital costs if you rely on it alone.

• As a PSHB enrollee, coordinating Medicare with your health plan can reduce these unexpected charges, but it requires careful planning and understanding of what is and isn’t covered.

What Medicare Part A Actually Covers

Medicare Part A is often referred to as hospital insurance. While that sounds reassuring, it doesn’t mean full hospital coverage in the way many people assume. It has very specific rules, limited durations, and cost-sharing responsibilities that could lead to hefty bills if you’re not prepared.

Here’s what Part A typically covers:

• Inpatient hospital stays: Including semi-private rooms, meals, general nursing, and some hospital services and supplies.

• Skilled nursing facility (SNF) care: But only under strict conditions and not for long-term custodial care.

• Hospice care: For terminally ill patients meeting eligibility criteria.

• Some home health care: Very limited and only under certain physician-ordered conditions.

Coverage is not unlimited. You pay deductibles, coinsurance, and may hit coverage limits faster than expected.

Hospital Stay Durations Matter More Than You Think

Under Medicare Part A in 2025, the key figure to remember is 60 days. If you’re hospitalized as an inpatient, your stay is grouped into what’s called a benefit period. The benefit period starts the day you’re admitted and ends when you haven’t received inpatient care for 60 consecutive days.

Here’s what the current cost-sharing structure looks like:

• Day 1–60: You pay a one-time $1,676 deductible per benefit period.

• Day 61–90: You pay $419 per day in coinsurance.

• Day 91 and beyond: You pay $838 per day while using up to 60 lifetime reserve days.

• After lifetime reserve days are used: You pay all costs.

If you have multiple hospital stays throughout the year, you could pay the deductible more than once, because each new benefit period restarts your cost-sharing clock.

Observation Status Doesn’t Count as Inpatient

This is one of the most common sources of confusion—and surprise bills. Just because you stay overnight in a hospital doesn’t mean Medicare classifies it as an inpatient stay.

If you’re under “observation status,” you’re considered an outpatient. Medicare Part A doesn’t cover outpatient services, even if you’re in a hospital bed, getting treatment, and staying overnight. Instead, these costs fall under Medicare Part B (if you have it), or your PSHB plan.

You could be responsible for:

• Full cost of the hospital room

• Doctor’s services billed under Part B

• Medications administered during the stay

• Any tests or procedures done during that period

If you don’t have Part B, you may be left entirely uncovered for these services unless your PSHB plan picks them up.

Skilled Nursing Facility (SNF) Coverage Isn’t Open-Ended

Many assume Medicare Part A covers long-term nursing home stays. It doesn’t. Here’s the actual coverage timeline:

• You must have a prior inpatient hospital stay of at least 3 days.

• You must enter the SNF within 30 days of that stay.

• You must need daily skilled care related to the hospital stay.

If you meet these criteria, you get:

• Days 1–20: Covered in full by Medicare Part A.

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

• After day 100: Medicare pays nothing.

Again, your PSHB plan might cover some of these costs, but only if it coordinates with Medicare and you’re properly enrolled in both.

What Happens If You Don’t Enroll in Medicare Part B?

If you’re eligible for Medicare and do not enroll in Part B, your PSHB plan may require you to pay more out of pocket. In 2025, Medicare-eligible Postal retirees and their covered family members are generally required to enroll in Part B to keep full PSHB benefits, unless they qualify for an exemption.

Without Part B:

• You’ll likely be charged higher cost-sharing under your PSHB plan.

• Certain services won’t be covered at all if Medicare was expected to be primary.

• You might lose access to preferred providers who only coordinate with Medicare.

The PSHB Connection: What You Need to Know

PSHB plans are designed to coordinate with Medicare, particularly Part A and Part B. When both are active:

• Medicare pays first, then your PSHB plan may pay the remaining costs.

• This coordination significantly lowers your out-of-pocket burden.

• Some PSHB plans waive deductibles or offer Part B premium reimbursement.

However, if you delay or decline Medicare enrollment when eligible, your PSHB plan is no longer required to coordinate benefits in the same way.

Why Assuming Part A Is Enough Can Lead to Big Bills

It’s easy to assume that because Part A is premium-free for most people, it will take care of hospital costs. But:

• Observation stays don’t count.

• Multiple benefit periods mean multiple deductibles.

• Skilled nursing facility limits leave gaps after 100 days.

• No coverage for long-term care beyond the initial SNF window.

• No coverage for doctor’s services unless you have Part B or another plan.

PSHB enrollees who coordinate Medicare coverage correctly generally fare better financially and have fewer billing disputes.

How to Check Your Status and Avoid Gaps

To make sure you’re covered adequately, follow these steps:

• Confirm your Medicare enrollment: Log into your Social Security account or call Medicare directly.

• Check your PSHB plan’s rules: Review how your plan treats coordination with Medicare.

• Monitor hospital admission status: Always ask whether you are being admitted as an inpatient or kept under observation.

• Keep track of hospital dates: Know when your benefit period starts and ends to anticipate deductibles.

• Look out for SNF timelines: Ensure you transition within 30 days of an inpatient stay and meet all criteria.

Planning Ahead: Using PSHB and Medicare Together

By combining Part A, Part B, and a PSHB plan, you can significantly reduce your exposure to large hospital bills. But it doesn’t happen automatically. You must:

• Enroll in both Medicare Parts A and B as soon as you’re eligible.

• Choose a PSHB plan that clearly coordinates with Medicare.

• Avoid assuming that either Medicare or PSHB alone will fully protect you.

• Understand the timelines, benefit periods, and coverage caps for each.

When Coverage Ends and You’re on Your Own

If you’ve exhausted all Medicare-covered hospital or SNF days, you’re responsible for 100% of costs unless your PSHB plan steps in. These costs can add up quickly, especially for ongoing care or hospital stays that extend past benefit limits.

This is where having both Medicare Parts A and B, plus a PSHB plan that coordinates with them, offers the best protection.

Hospital Coverage Isn’t Automatic—It’s a Choice to Coordinate

Medicare Part A alone is not designed to stand on its own. If you’re a Postal retiree or nearing retirement, now is the time to make informed decisions about how you layer your coverage. Don’t rely on assumptions—rely on a plan.

If you’re unsure about how to proceed, speak to a licensed agent listed on this website. They can walk you through the process and help you avoid costly gaps.