Mulching your garden is generally considered to be a great way to improve soil conditions, help moderate the moisture content in your soil, and control weeds. If you mulch your hosta garden, pull back the mulch from around the crown of the plant about 4-6 inches to allow good air circulation up near all the stems. This will help control any fungal diseases. I've had some problems with more slugs when I mulch, so I often have a bare soil surface in my hosta beds to deprive slugs of any hiding place from which to launch their slimy attacks. However, with modern molluscicides it is quite easy to control the slugs and mulch the soil.