Key Takeaways

• Medicare alone doesn’t fully replace your Postal Service Health Benefits (PSHB) coverage—understanding how the two coordinate is essential for cost control and access to care.

• Your coverage decisions after turning 65 can permanently affect how much you pay, what’s covered, and whether you can re-enroll in certain benefits later.

Understanding Medicare Basics Is Only the First Step

When you first hear about Medicare, it may seem like a cleanly segmented set of plans—Part A for hospital insurance, Part B for outpatient care, Part D for prescriptions, and maybe a supplemental or Medicare Advantage plan on top. But once you begin making actual enrollment decisions, especially as a Postal Service annuitant transitioning into PSHB, the lines get much blurrier.

The PSHB program now requires most Medicare-eligible annuitants and family members to enroll in Medicare Part B to maintain full coverage. This change means you need more than a surface-level understanding of Medicare—you need to know how it fits with your PSHB benefits, how enrollment timing affects your costs, and what decisions you can’t reverse.

How Medicare Part A and Part B Work in 2025

You’re automatically eligible for Medicare at age 65 if you or your spouse paid Medicare taxes for at least 10 years. In 2025:

• Part A remains premium-free for most enrollees but has an inpatient hospital deductible of $1,676 per benefit period.

• Part B carries a monthly premium of $185, with an annual deductible of $257.

These costs can be shared or reduced depending on your PSHB plan’s coordination with Medicare. But skipping Medicare Part B when you’re required to enroll can lead to:

• Loss of PSHB medical coverage

• Permanent late enrollment penalties

• Limited future enrollment opportunities

PSHB Plans Expect You to Enroll in Medicare Part B

If you’re an annuitant and Medicare-eligible in 2025, you are generally required to enroll in Medicare Part B to maintain full PSHB coverage. Exceptions include:

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

• Actively employed Postal workers who are 64 or older as of January 1, 2025

• Certain overseas residents or those covered under Indian Health Services or VA

PSHB plans may reduce deductibles, lower copayments, or offer reimbursements when you have Medicare Part B. But these features often don’t apply if you fail to enroll on time.

Enrollment Timelines You Can’t Miss

Understanding Medicare timelines is critical to maintaining uninterrupted PSHB coverage. Here are the key periods:

1. Initial Enrollment Period (IEP)

This 7-month window starts three months before your 65th birthday month, includes your birthday month, and ends three months after. If you enroll during the first three months, Medicare starts the month you turn 65.

2. Special Enrollment Period (SEP) for PSHB

In 2024, there was a Special Enrollment Period from April 1 to September 30 for PSHB members who previously declined Part B. If you missed that, your next chance may only come with a penalty or qualifying life event.

3. General Enrollment Period (GEP)

If you miss the IEP and don’t qualify for an SEP, you can enroll during the GEP from January 1 to March 31, with coverage beginning July 1. But this often includes late penalties.

Commonly Overlooked Costs When You Delay or Decline Medicare

Skipping or delaying Medicare enrollment might feel like a cost-saving move in the short term, but it can lead to higher overall expenses and gaps in coverage. Here’s how:

• Part B late enrollment penalty: 10% added to your premium for every 12-month period you were eligible but didn’t enroll.

• Out-of-pocket PSHB costs increase: Many PSHB plans apply higher copayments or deductibles if you don’t have Medicare.

• No drug coverage safety net: Without Medicare Part D, you could lose access to the integrated drug benefit within your PSHB plan.

Prescription Coverage Through PSHB After Medicare

If you’re Medicare-eligible and enrolled in a PSHB plan, your prescription drug coverage is typically provided through an Employer Group Waiver Plan (EGWP), which is a type of Medicare Part D. In 2025:

• The Part D deductible is capped at $590.

• There’s now a $2,000 annual out-of-pocket cap for prescription drugs.

• Insulin copays remain limited to $35/month under federal provisions.

These benefits are only available if you remain enrolled in both Medicare and PSHB. Opting out of the Medicare-integrated drug benefit can significantly limit your access to affordable prescriptions.

What Changes—and What Stays the Same—After You Turn 65

Once you reach 65 and qualify for Medicare, several PSHB plan elements adjust automatically—but some stay constant.

What Changes:

• Coordination of Benefits (COB) begins: Medicare becomes primary, and PSHB becomes secondary.

• Lower cost-sharing: Many PSHB plans waive or reduce copays and deductibles if Medicare is primary.

• Eligibility for reimbursements: Some plans may offer partial or full reimbursement of your Part B premium.

What Stays the Same:

• You still pay PSHB premiums: Medicare doesn’t replace your PSHB plan—it complements it.

• Provider networks may remain unchanged: Most PSHB plans offer national coverage, and you can keep your current doctors if they accept Medicare.

• Family coverage rules stay in place: Your family members under 65 still rely solely on PSHB.

What Happens If You Don’t Enroll in Medicare Part B

Failing to enroll in Medicare Part B when required has lasting consequences. You may:

• Lose medical coverage under PSHB

• Face lifetime penalties on Part B premiums

• Have fewer opportunities to enroll in the future

And importantly, if you try to rely on PSHB alone without Medicare, your out-of-pocket costs could climb sharply because the plan treats you as if you have Medicare when processing your claims.

How to Decide Whether to Keep PSHB After Medicare Eligibility

The default for Postal retirees is to keep PSHB and enroll in Medicare. Dropping PSHB may seem like a way to save on premiums, but this strategy often backfires:

• No re-enrollment guarantee: Once you cancel PSHB, you may not be allowed back unless you qualify under a narrow set of exceptions.

• Loss of family coverage: Dropping PSHB cancels coverage for your spouse and dependents.

• Reduced coordination: Medicare alone may not cover everything, especially for services like dental, vision, or extended hospital stays.

In nearly every case, keeping PSHB while adding Medicare ensures more robust protection and often lowers overall costs when the two work together.

The Coordination Advantage: Why PSHB and Medicare Together Make Sense

One of the biggest benefits of keeping both PSHB and Medicare is how they coordinate. In most cases:

• Medicare pays first

• Your PSHB plan picks up the rest

This combination can nearly eliminate out-of-pocket costs for services like:

• Hospital stays

• Office visits

• Lab work and imaging

• Preventive care

But this only works if you’re properly enrolled in Medicare and remain in good standing with PSHB.

Planning Ahead: What You Should Do at Age 64

As you approach Medicare eligibility, you should start preparing about 6 to 9 months before your 65th birthday:

• Review your PSHB plan brochure to understand how it works with Medicare

• Check your eligibility and enrollment timeline for Medicare

• Set reminders to enroll in Medicare during your IEP

• Consult a licensed agent listed on the website for support tailored to Postal retirees

Failing to prepare can result in automatic changes you didn’t intend—or worse, a coverage gap that’s difficult and expensive to fix.

Real Coverage Decisions Require Real Strategy

Medicare sounds simple—until you have to make choices that affect your long-term health, finances, and family benefits. That’s why it’s critical to treat enrollment and coordination with your PSHB plan as a strategic process, not a one-time decision.

If you’re unsure about your options or how recent changes affect you, speak with a licensed agent listed on this website. Making the right move at the right time can help you protect your benefits and avoid long-term regrets.