Key Takeaways

• Medicare Part B covers essential outpatient services, but its monthly premium, annual deductible, and cost-sharing can result in significant out-of-pocket expenses.

• If you’re enrolled in the Postal Service Health Benefits (PSHB) Program and become eligible for Medicare, you must pay close attention to coordination rules and enrollment deadlines to avoid gaps in coverage or penalties.

Medicare Part B: What It Covers in 2025

Medicare Part B is one of the foundational parts of Original Medicare, and in 2025, it continues to provide coverage for a broad range of medically necessary services. As a PSHB enrollee nearing Medicare eligibility, you should understand what is included under Part B and what you still need to plan for separately.

Services covered by Medicare Part B include:

• Doctor visits (both primary and specialists)

• Outpatient medical services and procedures

• Preventive screenings and immunizations

• Durable medical equipment (DME)

• Lab tests and imaging (such as X-rays, MRIs, CT scans)

• Mental health outpatient care

• Ambulance services (if medically necessary)

• Some home health services

These are outpatient services, meaning they are not covered by Medicare Part A, which handles inpatient hospital care. However, while Part B covers a wide range of services, it is far from free, and this is where the monthly surprises can begin.

Monthly Premiums Aren’t Optional

Everyone enrolled in Medicare Part B pays a monthly premium. In 2025, the standard monthly premium is $185, but you could pay more depending on your income, due to what is called the Income-Related Monthly Adjustment Amount (IRMAA). Your 2023 tax return is used to calculate your 2025 IRMAA tier.

For high-income individuals and couples, the monthly amount can increase significantly. These higher premiums are automatically deducted from your Social Security payment if you are receiving benefits. If not, you will receive a quarterly bill.

As a PSHB annuitant or employee who is newly Medicare-eligible, you should budget for this monthly premium in addition to your PSHB plan premiums. While PSHB plans may offer benefits when combined with Medicare Part B, they do not eliminate the need to pay the Part B premium.

Annual Deductible and Cost-Sharing

In addition to the monthly premium, Medicare Part B has a yearly deductible of $257 in 2025. This amount must be paid out of pocket before Medicare begins to pay its share.

After the deductible is met, Medicare generally covers 80% of the approved cost of most Part B services. You are responsible for the remaining 20% unless you have secondary insurance that pays the remainder. Fortunately, many PSHB plans coordinate benefits to help cover these remaining costs, but the amount varies by plan.

Understanding what your PSHB plan pays for and what remains your responsibility is critical for budgeting your healthcare expenses properly. Do not assume that Medicare covers everything in full just because you are enrolled.

Enrollment Timelines and Coordination Rules

If you’re a PSHB enrollee turning 65, you will likely need to enroll in Medicare Part B to maintain full PSHB benefits. Failing to do so could result in higher healthcare costs or even termination of drug coverage through PSHB.

Here are the key enrollment periods to remember:

• Initial Enrollment Period (IEP): This is the seven-month window around your 65th birthday: three months before, your birth month, and three months after. Enroll during this time to avoid late penalties.

• Special Enrollment Period (SEP): If you delayed Part B enrollment due to having active employment-based coverage (such as through USPS), you may qualify for an SEP when that employment ends. This SEP lasts for eight months but does not include coverage for drug plans unless otherwise specified.

• General Enrollment Period (GEP): Runs annually from January 1 to March 31, but enrolling during this window may lead to delayed coverage (starting July 1) and penalties for late enrollment.

If you are a Medicare-eligible Postal Service annuitant or family member, PSHB generally requires Part B enrollment unless you fall under one of the exemption categories:

• Retired on or before January 1, 2025

• Active employee aged 64 or older as of January 1, 2025

• Residing outside the U.S.

• Receiving care from the VA or Indian Health Service

Failure to enroll in Medicare Part B when required can result in a loss of prescription drug coverage through PSHB and limited re-enrollment rights later.

Medicare and PSHB: How the Costs Interact

Once enrolled in Medicare Part B, it becomes the primary payer for outpatient services. Your PSHB plan then acts as secondary payer. This coordination often reduces or eliminates your out-of-pocket costs for copayments, coinsurance, or deductibles that Medicare leaves behind.

Some PSHB plans may even offer incentives for Part B enrollees, such as:

• Reimbursement of a portion of the Part B premium

• Waived deductibles or lower cost-sharing

• Enhanced coverage for prescription drugs or ancillary services

Keep in mind that these benefits vary. While these features can lower your costs, they don’t eliminate the monthly Part B premium, nor do they apply retroactively.

You should also be aware of your PSHB plan’s out-of-pocket maximum. In 2025, for example, the in-network out-of-pocket maximum is $7,500 for Self Only coverage. However, enrolling in Medicare Part B can dramatically reduce how quickly you approach that threshold.

The IRMAA Factor: When Income Affects Your Costs

Medicare premiums are tiered by income. If your modified adjusted gross income (MAGI) in 2023 exceeded $106,000 as an individual or $212,000 as a couple filing jointly, your monthly Part B premium will include an IRMAA surcharge.

This surcharge can add several hundred dollars to your monthly costs. If you experience a life change like retirement or a significant income reduction, you can file an appeal with the Social Security Administration using Form SSA-44 to request a reduction in your IRMAA tier.

It’s important to check your income and understand how it affects your Medicare costs. Otherwise, you may be surprised by an unexpected premium bill that differs significantly from the standard $185.

PSHB Drug Coverage and the Role of Part B

Prescription drugs are generally not covered under Part B unless they are administered in a clinical setting (such as chemotherapy infusions or certain injectables).

Instead, your PSHB plan includes a Medicare Part D Employer Group Waiver Plan (EGWP) to provide prescription drug coverage. This is automatic when you enroll in a PSHB plan and Medicare Part B. But if you decline Part B, you will also lose access to the Part D EGWP.

Part D coverage through PSHB includes:

• A $2,000 annual out-of-pocket cap on prescription drugs starting in 2025

• Access to an expanded pharmacy network

• A $35 cap on insulin

Declining Medicare Part B has ripple effects. Once you opt out, you cannot rejoin the PSHB Part D plan except under very limited circumstances, such as your first Open Season after losing other drug coverage.

What Happens If You Delay?

Delaying Medicare Part B enrollment when required can have significant consequences:

• Late Enrollment Penalty: You’ll pay a 10% premium increase for each full 12-month period you were eligible but not enrolled. This penalty is permanent.

• Coverage Gaps: If you miss your IEP and don’t qualify for a SEP, your only chance to enroll is during the GEP, with coverage beginning in July. This delay could leave you without outpatient coverage for several months.

• Loss of PSHB Drug Benefits: If you fail to enroll in Part B when required, you lose access to your PSHB drug coverage permanently unless you qualify for a limited re-enrollment window.

It is essential to review your situation carefully before deciding to delay Medicare Part B.

How to Get Help Understanding Your Options

Understanding the relationship between Medicare Part B and PSHB coverage is not something you want to leave to chance. Timing, cost-sharing, and eligibility all affect your healthcare access and out-of-pocket burden.

Start by:

• Reviewing your PSHB plan’s 2025 brochure for coordination details

• Budgeting for your monthly Medicare Part B premium and any IRMAA adjustments

• Checking your Medicare eligibility and enrollment timeline

• Seeking personalized advice from a licensed agent listed on this website

Don’t assume that Part B is optional or that it duplicates your PSHB coverage. In most cases, it works with your PSHB plan to reduce your financial risk and improve access to care.

Managing Monthly Surprises and Staying Covered

Medicare Part B delivers substantial outpatient benefits in 2025, but it does so with recurring financial obligations that you must prepare for. As a PSHB enrollee, your plan and Medicare can work together to reduce your costs, but only if you enroll on time and understand how the systems interact.

If you’re approaching age 65 or supporting a family member who is, now is the time to take action. Understand your responsibilities, budget for the known costs, and avoid penalties or coverage disruptions.

For help with reviewing your specific options and selecting the right path forward, speak with a licensed agent listed on this website.