Key Takeaways

• Medicare Part A is often described as “premium-free,” but that doesn’t mean it’s cost-free—especially during extended hospital stays. Costs sharply increase after day 60 of inpatient care.

• As a PSHB enrollee, understanding how Medicare Part A pairs with your health benefits can help you avoid thousands in surprise out-of-pocket charges.

Understanding the True Cost Behind “Free” Medicare Part A

Medicare Part A often gives off the impression that it’s completely free if you’ve worked long enough. While most people do qualify for premium-free coverage based on their work history, what often gets overlooked is what Part A doesn’t cover—or how much you’ll owe when your hospital stay drags beyond the initial threshold.

In 2025, Medicare Part A comes with substantial cost-sharing requirements that kick in depending on the duration and setting of your care. If you rely on PSHB as your main health coverage, this matters more than ever.

What Medicare Part A Actually Covers

Medicare Part A provides inpatient hospital coverage. That includes:

• Semi-private rooms

• Meals

• General nursing

• Inpatient drugs as part of your treatment

• Care in critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals

• Skilled nursing facility care (with strict limits)

• Some home health services (after hospital discharge)

• Hospice care for the terminally ill

It does not cover private-duty nursing, a private room (unless medically necessary), or non-essential hospital services such as TV or phone access.

The Breakdown of Hospital Costs in 2025

Here’s where the idea of “free” quickly dissolves:

• $1,676 deductible: You pay this amount per benefit period, not per year. A benefit period begins the day you’re admitted and ends after you’ve been out of the hospital or skilled nursing facility for 60 days.

• Days 1–60: After the deductible, Medicare pays the full cost.

• Days 61–90: You owe $419 per day.

• Days 91 and beyond: You begin using your 60 lifetime reserve days, and Medicare covers all but $838 per day.

• Beyond lifetime reserve days: You pay all costs for hospital care.

If your PSHB plan doesn’t coordinate well with these tiers, you could be hit with unexpected bills.

Skilled Nursing Facility Costs Add Up, Too

Don’t confuse hospital coverage with skilled nursing coverage. Even if you qualify, Medicare Part A limits apply strictly:

• Days 1–20: Fully covered

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

• After day 100: You pay all costs

Qualification requires a prior hospital stay of at least three consecutive days, and discharge must be related to the reason for skilled nursing care.

How PSHB Fits into the Medicare Picture

With the transition to the Postal Service Health Benefits (PSHB) Program in 2025, the way your plan interacts with Medicare Part A has changed for good. PSHB plans are required to integrate with Medicare Parts A and B for annuitants who are eligible and enrolled.

If you have both Medicare and PSHB:

• Medicare Part A pays first

• PSHB pays second, covering deductibles, copayments, and coinsurance depending on the plan

If you’re not enrolled in Medicare, your PSHB plan becomes your primary and only payer—and that means you’ll shoulder more of the cost-sharing burden directly.

Why Day 61 Is a Tipping Point

Until day 60, Medicare covers your inpatient stay almost entirely after the deductible. But on day 61, you start paying $419 per day in 2025. That adds up quickly:

• 10 extra days = $4,190

• 20 extra days = $8,380

Lifetime reserve days (beginning on day 91) provide some cushion, but they are non-renewable. Once you use them, they’re gone for life.

Some PSHB plans help soften these costs if you are enrolled in Medicare, but not all. It depends on your plan’s coordination of benefits. Without Medicare, your plan treats the entire expense as primary—and may only cover a percentage, leaving you with substantial out-of-pocket liability.

Why You Can’t Rely on PSHB Alone After Age 65

If you’re 65 or older and eligible for Medicare, opting not to enroll in Part A (or Part B) could leave significant gaps. PSHB plans in 2025 are structured to work alongside Medicare. This structure assumes:

• Medicare is the primary payer

• PSHB is the secondary payer, designed to fill the gaps

Without Medicare, you shift the financial burden to your PSHB plan and to yourself. In most cases, this results in higher:

• Deductibles

• Coinsurance

• Copayments

Understanding Benefit Periods and Their Impact

The 60-day benefit period reset rule under Medicare is not well known but is critically important. Every time you go 60 days without inpatient or skilled nursing care, a new benefit period begins. That means:

• You owe the full $1,676 deductible again

• Your days 1-60 protection resets, but so do the cost tiers

You could be hospitalized multiple times in a single year and pay the deductible each time. This can spiral into thousands if your PSHB plan doesn’t bridge these costs.

What About Hospice and Home Health Services?

Hospice care is fully covered under Part A for terminally ill patients, but only when:

• You elect to receive palliative rather than curative care

• A hospice doctor certifies that you’re expected to live six months or less

Even then, room and board costs in your home or facility are not covered unless you’re in a Medicare-approved hospice facility.

Home health care, while partially covered, requires prior hospitalization and is typically limited in scope and duration. PSHB plans might offer broader coverage, but only if you’re enrolled in Medicare.

Don’t Confuse No Premium With No Cost

Many Postal Service retirees qualify for premium-free Medicare Part A because of their work history. But that word “premium-free” is often mistaken for cost-free, which is not accurate. Here’s the distinction:

• Premium-free: No monthly cost if you (or your spouse) paid Medicare taxes for 40+ quarters

• Not cost-free: Deductibles, copayments, and coinsurance still apply

You may think skipping Medicare enrollment saves you money in the short term. But the long-term risk of high inpatient costs—especially without full coordination from your PSHB plan—is far more expensive.

How to Avoid Surprise Charges

To reduce your risk of overwhelming hospital bills under PSHB:

• Enroll in Medicare Part A (and Part B if applicable) when first eligible

• Review your PSHB plan brochure to confirm how Medicare coordination works

• Understand your plan’s hospital and skilled nursing benefits

• Don’t assume your PSHB plan covers everything just because you’re retired

• Be aware of benefit period resets and lifetime reserve day limits

What to Ask Before You Need a Hospital Bed

The worst time to learn about coverage gaps is when you’re already in the hospital. Before you need care, ask these questions:

• Does your PSHB plan require Medicare enrollment at age 65?

• Does your plan cover hospital coinsurance after day 60?

• What happens if you don’t have any lifetime reserve days left?

• Will your plan cover skilled nursing if you skip Part A?

• How does your plan define a benefit period?

These answers will vary depending on your specific PSHB option. That’s why your decision to enroll in Medicare has to be proactive, not reactive.

Know Your Numbers and Make Them Work for You

The costs tied to Medicare Part A beyond day 60 can be shocking if you’re not prepared. Even worse, the coordination between PSHB and Medicare doesn’t automatically happen unless you enroll. You have to set the system in motion.

Talk to a licensed agent listed on this website for personal advice based on your PSHB plan. The right move today can protect your finances tomorrow.