Key Takeaways

• Enrolling in Medicare Part B is mandatory for many Postal retirees to keep full PSHB coverage in 2025 and beyond.

• Skipping Part B can result in significant coverage gaps, late penalties, and even loss of prescription drug benefits under PSHB.

Why Medicare Part B No Longer Feels Optional in 2025

You might be used to thinking of Medicare Part B as a personal choice. But in 2025, if you’re a Postal Service retiree or a Medicare-eligible family member covered under the Postal Service Health Benefits (PSHB) Program, that mindset could cost you far more than just a monthly premium.

Starting January 1, 2025, Medicare Part B enrollment is a requirement—not just a recommendation—for many Medicare-eligible annuitants and family members who want to maintain full PSHB benefits. This shift is not simply bureaucratic. It is a structural change that can alter your healthcare security, your out-of-pocket costs, and even your access to medications.

Who Must Enroll in Part B Under PSHB Rules

According to the PSHB framework:

• If you retired after January 1, 2025, and are eligible for Medicare, you must enroll in Medicare Part B to maintain full PSHB benefits.

• If you are a covered family member who is also Medicare-eligible (such as a spouse turning 65), the same rule applies.

• Those who retired on or before January 1, 2025, are exempt, provided they were not already enrolled in Medicare Part B by that time.

• Employees who were age 64 or older as of January 1, 2025, are also exempt.

If you fall into a required category and skip Part B, your PSHB plan will not cover medical services the way it would have with Medicare coordination.

What Happens If You Don’t Enroll in Part B

Here’s what skipping Part B means for your PSHB coverage:

• Loss of Coordination: PSHB plans are designed to coordinate with Medicare. If Medicare Part B isn’t in place, your PSHB plan acts like you have it anyway—leaving you responsible for the portion Medicare would have paid.

• Denied Claims or Reduced Benefits: Your plan might deny or reduce payments for outpatient services such as doctor visits, preventive screenings, durable medical equipment, and lab work.

• No Part D EGWP Access: PSHB’s prescription drug coverage for Medicare enrollees is integrated through a Medicare Part D Employer Group Waiver Plan (EGWP). Skipping Part B can disqualify you from this drug coverage.

• Irrevocable Consequences: If you skip Part B when required and your PSHB benefits are downgraded or terminated, you may not be able to reverse the damage retroactively.

The Late Enrollment Penalty Problem

If you delay Part B enrollment without a valid reason, the penalty adds up quickly. For every 12-month period you should have been enrolled but weren’t, Medicare adds a 10% penalty to your premium—for life.

Let’s say you delay enrollment for three years. That’s a 30% lifetime penalty tacked onto your monthly Part B premium, which in 2025 is $185 for most enrollees.

Worse, delaying Part B means you may only enroll during the General Enrollment Period (GEP) from January 1 to March 31, with coverage starting in July. That’s a gap of several months during which you may be underinsured.

When PSHB and Medicare Work Together

PSHB plans are built to wrap around Medicare—specifically, when both Parts A and B are in place. Here’s what typically happens:

• Medicare Pays First: For most services, Medicare is the primary payer.

• PSHB Pays Second: Your PSHB plan covers what Medicare doesn’t, often reducing or eliminating your out-of-pocket expenses.

• Reduced Cost Sharing: Many PSHB plans waive or reduce deductibles and coinsurance when Medicare is your primary coverage.

• Part B Reimbursement: Some PSHB plans may offer a partial reimbursement of your Part B premium or provide enhanced benefits when both Parts A and B are active.

But these benefits vanish or shrink dramatically if Part B is missing.

Special Enrollment Period for 2025 Transition

To help ease the transition, a Special Enrollment Period (SEP) was made available in 2024. From April 1 to September 30, 2024, eligible annuitants could enroll in Medicare Part B without a late penalty.

If you missed this window, the General Enrollment Period in early 2025 may be your next chance—but with potential penalties and delayed coverage.

Common Reasons People Skip Part B—and Why They Backfire

Here are a few rationales people use for skipping Part B and why they may regret it under PSHB in 2025:

• “It’s too expensive.”

  Skipping it may end up costing more. Without Medicare Part B, you’re exposed to higher out-of-pocket costs and could lose drug coverage altogether.

• “I already have PSHB.”

  PSHB plans assume you’re enrolled in both Medicare A and B when you’re eligible. Without both, your PSHB plan acts like Medicare paid its share—even if it didn’t.

• “I’m healthy now.”

  Health can change quickly, and if you wait until you need care, you may be locked out or face penalties for late enrollment.

• “I don’t understand how Medicare and PSHB work together.”

  That’s understandable—but misunderstanding doesn’t exempt you from penalties or coverage losses. Now is the time to get clarity.

Drug Coverage Risks If You Skip Part B

PSHB prescription drug coverage for Medicare enrollees is delivered through a Medicare Part D EGWP. This plan:

• Offers a $2,000 annual out-of-pocket cap for prescriptions

• Includes expanded pharmacy networks

• Caps insulin costs at $35/month

But you lose access to this benefit if you don’t enroll in Part B. Opting out effectively removes your drug coverage, and re-enrollment is limited to specific periods and requirements.

Exceptions and Exemptions

Some Medicare-eligible individuals are exempt from the mandatory Part B rule:

• Retired on or before January 1, 2025, and not already enrolled in Part B

• Living abroad without Medicare access

• Receiving VA or Indian Health Service benefits exclusively

• Employees aged 64 or older as of January 1, 2025

These individuals may maintain PSHB coverage without Part B, but are still encouraged to weigh the benefits of enrolling.

What to Do If You’re Not Sure

If you’re unsure whether you must enroll in Part B or how to coordinate it with PSHB:

• Review your PSHB plan brochure and Medicare materials.

• Check your retirement date and age as of January 1, 2025.

• Talk to a licensed agent listed on this website who understands PSHB and Medicare rules.

Timely decisions are critical. Waiting too long could result in irreversible coverage disruptions.

Timing Your Enrollment Correctly

Your Initial Enrollment Period (IEP) for Medicare starts three months before you turn 65 and continues for seven months (3 months before, the month of, and 3 months after your birthday).

Missing this window without employer coverage may trigger:

• Lifetime late enrollment penalties

• Gaps in coverage

• Restricted enrollment windows

The 2025 PSHB rules make it more important than ever to take this timeline seriously.

What Happens to Your PSHB Plan Without Part B

If you decline Part B and are not exempt, your PSHB plan won’t simply continue unchanged. Instead:

• It may process claims as if you had Part B, reducing your reimbursement

• Drug coverage under the EGWP may be revoked

• You may become responsible for the full cost of outpatient care

This undermines the coordination that keeps your costs lower.

Keep Your Benefits Working the Way They Should

The PSHB and Medicare systems are designed to work together—not separately. Think of Part B as the gateway to unlocking the full value of your PSHB plan in retirement.

If you qualify for Medicare and don’t meet the exemption criteria, enrolling in Part B is not just the safe choice—it’s the smart one.

Avoid the domino effect of late penalties, lost drug benefits, and denied claims. Get in touch with a licensed agent listed on this website to review your options and make the enrollment decisions that protect your health and your wallet.