Key Takeaways

• While Medicare Part A is often described as premium-free, it includes substantial cost-sharing like deductibles and coinsurance that PSHB enrollees need to understand.

• Enrolling in both Medicare Part A and a PSHB plan can offer stronger coverage, but overlooking cost responsibilities under Part A may result in large out-of-pocket surprises.

What “Free” Really Means for Medicare Part A

Many Postal Service retirees are under the impression that Medicare Part A is completely free. This belief often stems from the fact that most beneficiaries don’t pay a monthly premium for Part A if they or their spouse worked and paid Medicare taxes for at least 40 quarters (10 years). However, this interpretation of “free” misses critical details.

While you may not pay a premium, Part A includes several other costs that can quickly add up. These include inpatient hospital deductibles, daily coinsurance, and lifetime reserve day charges that many PSHB members overlook.

2025 Medicare Part A Costs That Affect You

Let’s break down the key Medicare Part A costs for 2025:

• Inpatient hospital deductible: $1,676 per benefit period. This amount resets after 60 days of no inpatient care, meaning you could face it multiple times in a single year.

• Hospital stay coinsurance:

  • Days 1-60: $0 per day (after deductible)

  • Days 61-90: $419 per day

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

  • After lifetime reserve days are used, you pay all costs.

• Skilled nursing facility care:

  • Days 1-20: $0

  • Days 21-100: $209.50 per day

  • After 100 days: You pay all costs

These figures show that Part A comes with serious out-of-pocket obligations, especially if your hospitalization is lengthy or repeated within a year.

Why These Costs Matter More with PSHB

As a Postal Service Health Benefits (PSHB) enrollee, you may assume your plan will cover all or most hospital-related expenses. While many PSHB plans coordinate with Medicare, they don’t replace Medicare Part A. If you only have PSHB and are Medicare-eligible but not enrolled in Part A, your PSHB plan might pay less or deny claims that Medicare would have paid first.

On the other hand, if you have both PSHB and Medicare Part A, your out-of-pocket costs could still depend on how your PSHB plan handles coordination of benefits. For example:

• Your PSHB plan might waive certain deductibles or coinsurance if Medicare pays first.

• Some plans reduce or eliminate hospital copays if you are enrolled in Part A.

• Others may not offer additional hospital benefits unless Medicare is your primary payer.

Understanding the interaction between the two is crucial to avoid gaps.

Hospital Benefit Periods Can Be Misleading

Another area of confusion is the concept of the benefit period under Medicare Part A. Many think this refers to a calendar year, but it doesn’t.

• A benefit period starts the day you are admitted as an inpatient in a hospital.

• It ends after you haven’t received inpatient care for 60 days in a row.

• If you are readmitted after that 60-day window, a new benefit period begins, and so does a new deductible.

That means multiple hospital stays in one year can result in several $1,676 deductibles. This is especially important for PSHB retirees with chronic conditions who face frequent admissions.

Skilled Nursing Facility Coverage Has Strict Conditions

Medicare Part A will only pay for skilled nursing facility (SNF) care under specific conditions:

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

• You must be admitted to the SNF within 30 days of discharge.

• Care must be medically necessary and require skilled services.

Many PSHB members assume their plan will step in when Medicare doesn’t pay, but not all PSHB plans fill the gaps left by Medicare Part A. If your plan doesn’t have robust SNF coverage, you could be left paying $209.50 per day from day 21 through day 100—or more if you exceed that.

How PSHB and Medicare Part A Coordinate

By default, Medicare pays first when you are a retiree enrolled in both PSHB and Medicare. Your PSHB plan then serves as the secondary payer. This coordination can reduce or eliminate some costs, but:

• You still need to meet Medicare’s cost-sharing obligations before your PSHB plan kicks in.

• Some PSHB plans offer special incentives for enrolling in Part A, such as waived deductibles or copays.

• Others require you to enroll in both Part A and Part B to receive enhanced benefits or reduced premiums.

So, while Part A reduces your upfront exposure, it doesn’t eliminate all costs.

What Happens If You Skip Part A?

If you’re eligible for premium-free Part A and choose not to enroll, your PSHB plan could treat your benefits differently. In 2025, most Medicare-eligible PSHB retirees must enroll in Medicare Part B to maintain full PSHB coverage. While Part A isn’t technically required, skipping it could result in the following:

• Higher cost-sharing

• Denied claims that Medicare would have paid

• Reduced PSHB coordination benefits

This is particularly risky if you end up in the hospital, need SNF care, or face lengthy inpatient treatment.

Lifetime Reserve Days Can Vanish Quickly

Medicare Part A offers up to 60 lifetime reserve days for hospital stays longer than 90 days. But they are not renewable.

• Once you use them, they’re gone forever.

• Each day costs $838 in 2025.

If your PSHB plan doesn’t supplement these charges, you’ll pay out-of-pocket. Some PSHB plans offer extended hospital coverage, but only if Medicare pays first. That makes Part A enrollment even more essential.

Considerations for Late Enrollment

If you delayed enrolling in Part A for any reason and aren’t eligible for premium-free coverage, you may face penalties if you enroll later. However, since most PSHB retirees qualify for premium-free Part A, the bigger risk is lack of coverage during early retirement or if you’re receiving care abroad (where Medicare doesn’t usually apply).

Also note:

• If you retire before age 65 and delay enrolling in Medicare, you should review your PSHB plan’s terms to avoid coverage disruptions.

• If you return to work or receive VA benefits, special rules may apply.

Don’t Rely Solely on PSHB for Hospital Costs

PSHB plans are strong, but they are built to coordinate with Medicare. They are not meant to serve as stand-alone coverage once you’re Medicare-eligible. Relying only on PSHB could leave you exposed to high inpatient costs if you haven’t enrolled in Part A.

For 2025, it makes financial sense to ensure your Medicare Part A enrollment is active and aligned with your PSHB plan to maximize protection and reduce out-of-pocket hospital charges.

Final Thoughts for 2025 PSHB Enrollees

Medicare Part A may not have a monthly premium for most, but it is far from cost-free. Deductibles, coinsurance, benefit periods, and lifetime limits can all affect your finances during a hospital stay or skilled nursing care episode. Pairing Part A with your PSHB plan is generally a smart move—but only if you understand how the two work together.

Speak with a licensed agent listed on this website to ensure you’re enrolled correctly, your costs are minimized, and your PSHB benefits are fully leveraged in 2025.