Key Takeaways

• Once you enroll in Medicare alongside your Postal Service Health Benefits (PSHB) plan, the way your deductible applies can shift significantly—sometimes reducing your out-of-pocket liability, other times requiring coordination between plans.

• Your PSHB plan may waive or reduce your deductible if you’re enrolled in Medicare Part B, but you need to actively understand how both systems work together to avoid unnecessary costs.

What a PSHB Deductible Looks Like on Its Own

Before Medicare enters the picture, your PSHB deductible is typically straightforward. It’s a fixed amount you must pay out-of-pocket each calendar year before your plan starts to pay for services beyond preventive care.

In 2025, most PSHB plans have deductibles that range between $350 and $500 for in-network care under Self Only coverage. If you have Self Plus One or Self and Family coverage, your deductible can double.

Here’s what that means:

• You must meet this annual deductible before your plan covers non-preventive services like specialist visits, imaging, lab work, or outpatient surgery.

• Preventive services often remain covered with no cost-sharing before the deductible kicks in.

• Deductibles do not include premiums or copayments.

When you rely solely on PSHB, you know the upfront cost expectation. But once you add Medicare, things change.

The Role of Medicare Part B in Shifting Deductible Costs

Medicare Part B becomes a major player in how your healthcare costs are calculated. Starting at age 65 (or earlier if you’re eligible due to disability), you’re allowed to enroll in Medicare. If you’re a postal retiree or annuitant enrolled in PSHB, and you’re Medicare-eligible, you’re now expected to enroll in Medicare Part B to retain full PSHB coverage.

Here’s what Medicare Part B brings in 2025:

• A monthly premium of $185

• An annual deductible of $257

When you pair PSHB with Medicare Part B:

• Medicare becomes the primary payer.

• Your PSHB plan becomes secondary, often filling in coverage gaps.

This coordination often works in your favor. Many PSHB plans reduce or eliminate their own deductibles when you have Medicare Part B. That’s a significant cost offset—but only if you’re enrolled in both and your plan explicitly offers this coordination benefit.

What Actually Happens to Your Deductible After Adding Medicare?

When Medicare becomes primary:

• Your healthcare providers bill Medicare first.

• Medicare pays its share and sends the remainder to your PSHB plan.

• Depending on the service and plan, the secondary PSHB coverage may cover the rest or leave a balance (such as a copay or a coinsurance amount).

Let’s look at the deductible impact:

• If your PSHB plan waives your deductible for Medicare-covered services: You don’t have to meet that original $350 or $500 threshold anymore—Medicare covers the bulk of your care, and your PSHB plan steps in afterward.

• If the PSHB deductible still applies: You may need to pay the Medicare deductible and the PSHB deductible, depending on how services are billed and which are covered under Medicare.

Why the Timing of Enrollment Matters

Enrolling in Medicare Part B as soon as you’re eligible is not just about avoiding late penalties. It’s also about maximizing coordination with your PSHB plan and limiting your out-of-pocket expenses.

The key enrollment milestones to keep in mind:

• Initial Enrollment Period (IEP): Begins 3 months before you turn 65, includes your birth month, and ends 3 months after.

• General Enrollment Period (GEP): Runs from January 1 to March 31 if you missed your IEP.

• Special Enrollment Period (SEP): Available for certain qualifying events, such as retirement after age 65.

Missing these can mean paying the full PSHB deductible without any Medicare coordination until the next enrollment window.

In 2025, PSHB plans require Medicare Part B enrollment for many retirees to retain full prescription and medical coverage. If you delay enrollment, you may face both higher deductibles and gaps in coverage.

What Medicare Doesn’t Cover Still Counts Toward Your Deductible

Medicare doesn’t cover everything. Some services fall outside its scope, including:

• Routine dental, hearing, and vision

• Certain prescription drugs (covered under Medicare Part D or EGWP within PSHB)

• Long-term custodial care

If these services are covered under your PSHB plan, you may still need to meet your plan’s deductible before it contributes.

Also, any services not approved by Medicare (even if covered by your PSHB plan) could still be subject to the plan’s deductible and coinsurance.

Deductibles and Out-of-Network Care Still Go Hand-in-Hand

Even if your PSHB deductible is waived for Medicare-covered services, that waiver typically applies only to in-network providers.

If you seek care from an out-of-network provider:

• You may face a separate, higher deductible (up to $3,000 in some cases).

• Coordination between Medicare and PSHB could be limited or unavailable.

Always verify:

• Whether the provider accepts Medicare.

• Whether they participate in your PSHB network.

When both are true, you typically benefit from reduced or eliminated deductibles.

The Annual Reset and Why It Matters for Retirees

Both your PSHB and Medicare Part B deductibles reset every January 1. That means each year, your first few healthcare visits or services might generate out-of-pocket expenses.

Planning tips:

• Schedule non-urgent care after you’ve met your deductible if you expect high service usage later in the year.

• Review your Explanation of Benefits (EOBs) regularly to track where you stand with deductibles.

In retirement, fixed incomes make these planning efforts more important. Even a small shift in deductible policy between Medicare and PSHB can affect your budget.

How to Know If You’re Eligible for Reduced or Waived PSHB Deductibles

Eligibility for waived or reduced deductibles usually depends on:

• Enrollment in Medicare Part B

• Your specific PSHB plan’s coordination-of-benefits rules

• Whether services are Medicare-approved

You should:

• Review your PSHB plan brochure

• Look for language like “Medicare coordination,” “waived deductible,” or “secondary coverage”

• Call your plan’s customer service if anything is unclear

If you’re unsure, a licensed agent listed on this website can explain what your plan actually covers once Medicare is involved.

What to Expect Each Year Moving Forward

As of 2025, the structure of PSHB plans is likely to keep evolving. Deductibles may:

• Adjust upward due to healthcare inflation

• Remain partially or fully waived for Medicare enrollees

• Be affected by new policy or coordination rules announced during Open Season

You should:

• Reassess your plan each November during Open Season

• Check if your deductible amount has changed for the upcoming year

• Evaluate whether you still benefit from keeping your current plan alongside Medicare

Open Season remains your once-a-year chance to switch if your deductible becomes unaffordable or stops coordinating well with Medicare.

Getting the Best Outcome from Dual Coverage

The Medicare + PSHB combination can be financially advantageous, but only when coordinated properly. To make the most of it:

• Confirm Medicare Part B enrollment if you’re eligible

• Compare plan documents for deductible waiver details

• Stick with in-network, Medicare-accepting providers

• Track your annual out-of-pocket costs, not just your premium

You don’t need to go it alone. For help navigating this complexity, reach out to a licensed agent listed on this website. They can break down your exact costs and help you choose a setup that protects your retirement income.

When PSHB Deductibles and Medicare Part B Work Together the Right Way

If done right, pairing PSHB with Medicare can lower your total costs dramatically. But it requires knowing how your deductible functions, what Medicare covers first, and how your PSHB plan follows up. Small oversights—like staying out of network or missing enrollment periods—can add hundreds or even thousands to your annual bill.

Don’t leave your deductible planning to chance. Speak with a licensed agent listed on this website who can review your specific PSHB and Medicare alignment and help you fine-tune your healthcare budget for 2025 and beyond.