Key Takeaways

• Medicare Part A covers hospital care, but your financial responsibility can increase quickly if your stay extends beyond standard coverage periods or includes out-of-network services.

• As a PSHB enrollee, you must understand how Medicare Part A works with your PSHB plan so that you can avoid surprise out-of-pocket costs during hospitalization.

Understanding Medicare Part A Basics

Medicare Part A, often referred to as hospital insurance, typically covers inpatient hospital care, skilled nursing facility care, hospice, and some home health services. If you’re eligible through work history, you likely pay no monthly premium for Part A. However, “premium-free” doesn’t mean “cost-free.”

Your costs under Medicare Part A can include:

• A deductible for each benefit period

• Daily coinsurance for extended hospital stays

• Higher coinsurance after specific time limits are exceeded

In 2025, the inpatient hospital deductible under Part A is $1,676 per benefit period. Once you meet this deductible, Medicare pays for up to 60 days of inpatient care in a hospital per benefit period. However, if you stay longer, the cost-sharing increases substantially.

Cost-Sharing That Can Escalate Quickly

Medicare defines a benefit period as beginning the day you’re admitted as an inpatient and ending after 60 consecutive days without inpatient care. Here’s how the coverage breaks down:

• Days 1–60: Covered in full after you meet the deductible

• Days 61–90: You pay $419 per day

• Days 91–150: You pay $838 per day, using your 60 lifetime reserve days

• Beyond 150 days: You pay all costs

These figures highlight how a lengthy hospital stay could become financially burdensome, even with Medicare Part A. And while you may assume your PSHB plan will step in to cover what Medicare doesn’t, this coordination depends heavily on enrollment in both Medicare Parts A and B.

Skilled Nursing Facility Limits

Medicare Part A also covers skilled nursing facility (SNF) care, but strict conditions apply:

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

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

Coverage limits in 2025 include:

• Days 1–20: Fully covered

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

• After day 100: You pay all costs

These limits reset with a new benefit period, but they can still result in significant out-of-pocket expenses if your recovery requires extended care.

PSHB and Medicare Part A: How They Interact

If you’re enrolled in a Postal Service Health Benefits (PSHB) plan and become eligible for Medicare, your PSHB plan works with Medicare to coordinate benefits. Medicare usually becomes the primary payer once you’re eligible, and PSHB becomes secondary.

This coordination often reduces your costs, but only when both Medicare Part A and B are active. If you enroll in Part A but decline Part B, your PSHB plan may reduce coverage for services Medicare Part B would have covered, leaving you with higher out-of-pocket expenses.

The integration provides important benefits, such as:

• Waived or reduced deductibles

• Lower coinsurance or copays

• Prescription drug benefits coordinated under Part D through your PSHB plan

But the key factor is full Medicare enrollment. Part A alone does not give you the full cost-sharing protections you may be expecting.

When Lifetime Reserve Days Are Used Up

Each Medicare beneficiary has 60 lifetime reserve days that can be used when a hospital stay extends beyond 90 days within a benefit period. Once these days are used, they do not reset. Future hospitalizations beyond day 90 will not have additional reserve days available.

This means that if you’ve experienced lengthy hospital stays in the past, your future out-of-pocket responsibilities under Medicare Part A could be even greater. Your PSHB plan may help in some cases, but not if you lack Medicare Part B or are out-of-network.

Home Health and Hospice Care: Not Always Free

While Medicare Part A does cover some home health and hospice services, these come with caveats:

• Home health care under Part A must follow a qualifying hospital stay.

• Hospice care requires certification by a physician that you are terminally ill and have less than six months to live.

Even with hospice, you may face costs such as:

• 5% of the Medicare-approved amount for inpatient respite care

• Drug copayments (up to $5 per prescription)

In such circumstances, your PSHB plan may offer supplemental coverage, but again, that depends on full Medicare integration.

Common Misunderstandings About Part A Coverage

Many PSHB enrollees assume that as long as they have Medicare Part A, they are shielded from high hospital bills. This belief often leads to delayed Part B enrollment, which can create a cascade of issues:

• Delays in secondary coverage from PSHB

• Gaps in coverage for outpatient services

• Potential late enrollment penalties for Part B

Moreover, if you need services classified as outpatient but delivered in a hospital setting (like observation care), Medicare Part A may not cover them. These services typically fall under Part B.

The Impact of Not Enrolling in Part B

As of 2025, certain PSHB annuitants and family members are required to enroll in Medicare Part B to retain full PSHB coverage. If you are:

• A Medicare-eligible annuitant or family member

• Not exempt by age or status (e.g., retired before January 1, 2025, or 64+ on that date)

Then failing to enroll in Part B means your PSHB plan may not cover what Part B would have. This includes:

• Outpatient services

• Durable medical equipment

• Emergency room observation care

In addition, you could lose access to drug coverage through the integrated Medicare Part D plan offered by PSHB.

Observation vs. Inpatient Status: A Costly Distinction

Another often-overlooked detail is whether your hospital stay is classified as “inpatient” or “observation.” This matters greatly because:

• Inpatient stays fall under Medicare Part A.

• Observation care, even if overnight, is billed under Part B.

If you’re hospitalized but never formally admitted, you may not meet the criteria for SNF coverage post-discharge. That could leave you paying the full cost for nursing facility care if you assumed Medicare would pick it up.

PSHB plans often defer to Medicare’s classification and payment structure. This means your plan likely won’t fill the gap unless you are enrolled in Part B.

What Happens After 60 Days Without Hospital Care

Once you’re discharged and go 60 consecutive days without inpatient hospital care, your benefit period resets. This is beneficial in many cases, as it restarts your full 60-day hospital coverage under Part A after you meet a new deductible.

However, this also means:

• A new $1,676 deductible applies

• New cost-sharing begins for future care

If you require frequent hospitalizations, these costs can stack up quickly. Your PSHB plan may help mitigate the charges but only if you’re fully enrolled in Medicare.

Strategies to Protect Yourself from Hidden Costs

To minimize your financial exposure, consider the following steps:

• Enroll in both Medicare Part A and Part B when first eligible

• Understand how your PSHB plan coordinates with Medicare

• Check whether your providers accept Medicare assignment and are in-network with your PSHB plan

• Ask hospitals about your admission status (inpatient vs. observation)

• Keep track of your lifetime reserve days if you’ve had prior long-term hospitalizations

These actions can help you take full advantage of both Medicare and your PSHB benefits.

Why Full Enrollment Matters for PSHB Members

Your PSHB coverage is structured to complement Medicare, not replace it. If you don’t enroll in both Parts A and B, your PSHB plan may act as a stand-alone plan with higher out-of-pocket costs. In contrast, when used together, the plans can drastically reduce your cost exposure.

Some PSHB plans even offer incentives like:

• Premium reimbursements for Part B

• Waived deductibles or coinsurance when both Medicare Parts A and B are active

• Lower prescription costs through integrated Medicare Part D drug plans

These benefits are generally not available if you enroll in only Part A.

Awareness Is Your First Line of Defense

Understanding the true scope of Medicare Part A is vital, especially for PSHB enrollees preparing for retirement or approaching age 65. Relying solely on Part A can expose you to significant out-of-pocket costs if your care exceeds standard coverage timelines or if you require outpatient or observation services.

Taking proactive steps now will ensure you’re not caught off guard when you need care the most. You can’t afford to assume Medicare will cover everything simply because you’ve paid into it over your career.

Aligning Medicare With PSHB for True Hospital Coverage Protection

It’s easy to assume that Medicare Part A alone provides robust hospital coverage, but the reality is more complicated. As a PSHB enrollee, the best protection comes from aligning your Medicare enrollment choices with your PSHB plan’s structure. Enrolling in both Parts A and B, understanding benefit periods and coinsurance costs, and verifying inpatient status all play a critical role in managing your healthcare expenses.

To make informed decisions and protect yourself from costly gaps in coverage, speak with a licensed agent listed on this website for guidance tailored to your circumstances.