Key Takeaways

• Even though Medicare and PSHB are meant to work together, missteps in coordination can lead to unexpected out-of-pocket expenses, service denials, or drug coverage confusion.

• As of 2025, PSHB requires certain Medicare-eligible retirees and dependents to enroll in Medicare Part B to maintain full benefits—but who exactly must enroll depends on age, retirement date, and other factors.

What You Expect From Medicare and PSHB Working Together

On paper, pairing Medicare with your Postal Service Health Benefits (PSHB) plan should offer peace of mind. Medicare covers many basic services, and your PSHB plan is designed to fill in the gaps—right? Unfortunately, it’s not always that seamless. In 2025, a new layer of rules and requirements has reshaped how coordination works between these two major sources of coverage. If you don’t fully understand who pays first, what services are included, or how prescription drugs are handled, you could be left with costly surprises.

Who Needs to Enroll in Medicare for PSHB in 2025

Under the new PSHB requirements that took effect in January 2025, Medicare Part B enrollment is mandatory for many, but not all, annuitants and their family members. Here’s how to know if you fall into the required group:

• You must enroll in Medicare Part B if:

  • You are a Postal Service annuitant entitled to Medicare Part A.

  • You turn 65 on or after January 1, 2025.

  • You are a family member also eligible for Medicare.

• You are exempt from the requirement if:

  • You retired on or before January 1, 2025.

  • You were age 64 or older as of January 1, 2025.

  • You live overseas.

  • You are covered through VA or Indian Health Service programs.

Failing to enroll in Part B when it’s required means losing your drug coverage and certain medical benefits under PSHB.

Why Coordination Can Get Complicated Fast

It’s easy to assume your PSHB plan will automatically align with Medicare. But without proper understanding, you may face problems like:

• Incorrect billing order: Some providers may bill PSHB first when Medicare should be primary.

• Claims rejections: If Medicare denies a service, your PSHB plan may follow suit.

• Out-of-network issues: Medicare may cover something that your PSHB plan limits to a narrower network.

• Missed pharmacy integration: PSHB drug coverage for Medicare enrollees is through a Part D Employer Group Waiver Plan (EGWP)—opting out of this could eliminate your drug benefits.

Understanding how these two systems interact is no longer optional. Misalignment doesn’t just cause frustration—it costs you money.

Who Pays First: Medicare or PSHB?

Coordination of benefits depends on your status. Here’s how it generally works in 2025:

• If you are a Medicare-eligible annuitant, Medicare pays first, and PSHB pays second.

• If you are an active employee, PSHB pays first, and Medicare pays second (if you’ve enrolled).

This distinction is important, especially for those continuing to work beyond age 65 or who return to service. Incorrect coordination leads to delayed or denied claims.

Key Medicare Parts and How They Coordinate With PSHB

Let’s briefly walk through each part of Medicare and how it interacts with your PSHB plan:

Medicare Part A (Hospital Insurance)

• Most people don’t pay a premium for Part A.

• Medicare pays first for inpatient hospital stays.

• PSHB plans typically cover remaining deductibles or coinsurance.

Medicare Part B (Medical Insurance)

• Part B has a standard monthly premium of $185 in 2025.

• It covers outpatient care, preventive services, durable medical equipment.

• If you’re required to enroll and don’t, PSHB may drop some benefits.

• PSHB plans usually waive or reduce copays and deductibles for those enrolled in Part B.

Medicare Part D (Prescription Drugs)

• PSHB plans integrate Part D through an EGWP.

• As of 2025, this includes:

  • $2,000 out-of-pocket cap for covered medications.

  • $35 insulin cost-sharing limit.

• If you decline this EGWP, you lose prescription drug coverage under PSHB.

Medicare Advantage (Part C)

• Some PSHB members mistakenly think they need a Medicare Advantage plan.

• In reality, if you’re enrolled in PSHB and Medicare Parts A and B, you do not need to enroll in a separate Medicare Advantage plan.

The Risks of Not Enrolling When Required

Ignoring or delaying Medicare Part B enrollment when you’re required to do so doesn’t just lead to higher premiums—it can cause:

• Loss of PSHB drug coverage

• No cost-sharing reductions under your PSHB plan

• Delays in care from claim denials or coordination errors

In some cases, if you didn’t sign up during your Initial Enrollment Period, you may have to wait until the General Enrollment Period (January 1 to March 31) the following year, with coverage only starting in July—and possibly with lifetime late penalties.

How Prescription Drug Coverage Has Changed in 2025

In 2025, prescription drug coverage under PSHB changed significantly. All Medicare-eligible PSHB enrollees are automatically enrolled in a Medicare Part D EGWP unless they opt out. Key updates include:

• Automatic enrollment into EGWP plans that align with your PSHB selection.

• Out-of-pocket cost cap of $2,000 annually.

• Expanded pharmacy networks and home delivery options.

Declining EGWP coverage disqualifies you from receiving any prescription drug benefits through PSHB.

Special Enrollment Periods to Fix Coordination Errors

If you missed your Medicare Part B enrollment window due to confusion or misinformation, you might qualify for a Special Enrollment Period (SEP). This includes situations such as:

• Loss of employer coverage

• Being newly notified of Medicare requirements under PSHB

• Administrative errors or misinformation

SEPs allow you to enroll outside the standard periods without late penalties, but only under strict conditions. Contacting a licensed agent listed on this website can help clarify your eligibility.

Medicare and PSHB in Retirement vs. Active Service

Whether you’re retired or still working makes a big difference in how Medicare and PSHB coordinate:

• Retired Postal workers: Medicare is primary. You must follow PSHB rules to keep full benefits.

• Active Postal workers: PSHB is primary, even if you’re enrolled in Medicare. You can defer Part B without penalty until retirement.

For those nearing retirement, coordinating enrollment timing is key to avoiding coverage gaps.

PSHB Plan Benefits With Medicare: What Improves?

Many PSHB plans enhance your benefits if you have Medicare. While the specifics vary by plan, common improvements include:

• Lower copayments for doctor visits and hospital stays

• Waived or reduced deductibles

• Expanded provider access and fewer referral requirements

• Better coverage for lab work, imaging, and outpatient procedures

However, these cost-sharing improvements only apply if you are enrolled in Medicare Part B. Otherwise, the plan processes your claims as if you didn’t have Medicare, meaning you pay more out-of-pocket.

Action Steps to Ensure Proper Coordination

You can avoid most coordination issues by being proactive. Here’s what you should do:

• Confirm whether you are required to enroll in Medicare Part B based on your retirement date and age.

• Review your Medicare enrollment status and correct any gaps immediately.

• Do not decline EGWP drug coverage unless you have other creditable coverage.

• Ensure your healthcare providers know your coordination order (who pays first).

• Check your PSHB plan brochure to confirm what benefits change with Medicare enrollment.

• Keep documentation and communication logs in case you need to appeal a denial.

Getting PSHB and Medicare to Work for You

Pairing PSHB with Medicare in 2025 is not just a checkbox on a form—it’s a complex relationship that demands your attention. From understanding who pays first to ensuring you’re enrolled in the right parts at the right time, the details matter. Medicare adds value to your PSHB coverage—but only if it’s coordinated correctly.

To make sure you’re getting every benefit you’re entitled to—and avoiding unnecessary expenses—speak with a licensed agent listed on this website. They can help you review your specific situation and walk you through the next steps confidently.