Key Takeaways:

1. If you’re a Postal Service retiree, understanding how Medicare and the Postal Service Health Benefits (PSHB) program work together is crucial for making informed healthcare choices.

2. Enrolling in Medicare Part B is mandatory for most PSHB retirees, and doing so can reduce out-of-pocket costs through coordinated benefits.

Understanding How Medicare and PSHB Work Together

As a retiree or soon-to-be retiree under the Postal Service Health Benefits (PSHB) program, you might be wondering how Medicare fits into your healthcare coverage. The good news is that Medicare and PSHB are designed to work together, offering a structured approach to managing healthcare expenses. But there are essential factors to consider when deciding how to integrate both programs into your retirement healthcare strategy.

1. Medicare Part B Enrollment is Required for Most PSHB Retirees

Starting in 2025, Medicare-eligible PSHB annuitants and covered family members must enroll in Medicare Part B to maintain their PSHB coverage. This rule applies to those who become eligible for Medicare after retirement. If you retired on or before January 1, 2025, and you’re not enrolled in Part B, you can keep your PSHB coverage without enrolling in Medicare.

This requirement ensures that retirees have access to comprehensive healthcare while reducing costs for both individuals and the Postal Service. Failing to enroll in Part B when required can result in losing your PSHB coverage, so it’s essential to plan accordingly.

2. Coordinated Benefits Reduce Out-of-Pocket Costs

When you have both PSHB and Medicare, your plans work together to cover medical expenses. Here’s how coordination typically works:

• Medicare Parts A & B act as your primary coverage. Medicare will pay first for covered healthcare services.

• Your PSHB plan acts as secondary coverage. It may cover remaining costs, such as copayments, coinsurance, and deductibles.

This coordination significantly reduces your out-of-pocket expenses, making healthcare more affordable in retirement. In many cases, PSHB plans waive certain deductibles and copayments for retirees who are enrolled in Medicare Part B.

3. Prescription Drug Coverage Changes Under PSHB

Retirees enrolled in both PSHB and Medicare are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) for prescription drug coverage. This plan offers:

• A $2,000 annual out-of-pocket cap on prescription drug costs, providing financial relief for retirees with high medication expenses.

• Additional subsidies and discounts, making prescription drugs more affordable compared to standalone Medicare Part D plans.

Since this is an automatic enrollment, you don’t need to sign up separately. However, it’s important to review the details of the EGWP plan offered under your PSHB plan to understand how it affects your prescriptions.

4. Choosing the Right PSHB Plan Matters

Not all PSHB plans coordinate with Medicare in the same way. Some plans offer better benefits for those enrolled in Medicare Part B, such as:

• Lower deductibles and out-of-pocket maximums.

• Premium reimbursements or reduced costs for Medicare Part B enrollees.

• Enhanced coverage for services not fully covered by Medicare, such as vision and dental benefits.

Reviewing your plan options during Open Season (November 11 to December 13, 2025) ensures that you choose a PSHB plan that aligns with your healthcare needs and Medicare coverage.

5. Understanding Costs and Coverage Under Both Programs

While Medicare and PSHB together offer strong coverage, it’s essential to understand the costs involved. Here’s what you need to keep in mind:

• Medicare Part A: Most retirees qualify for premium-free Part A, which covers hospital stays, skilled nursing care, and hospice.

• Medicare Part B: The standard monthly premium for 2025 is $185. This is required for most PSHB retirees.

• PSHB Premiums and Cost Sharing: While PSHB covers a significant portion of healthcare costs, you’ll still have premiums, deductibles, and copayments depending on your plan choice.

What Happens If You Delay Medicare Part B Enrollment?

If you’re required to enroll in Medicare Part B but delay enrollment, you could face:

• A permanent late enrollment penalty that increases your Part B premium for life.

• Loss of PSHB coverage if you fail to enroll within the required timeframe.

• Higher out-of-pocket costs since you won’t have Medicare as your primary coverage.

To avoid these penalties, be sure to enroll in Medicare Part B when you become eligible.

Making the Best Choice for Your Retirement Healthcare

Understanding how Medicare and PSHB work together can help you maximize your benefits and minimize costs. Here are some key takeaways to guide your decision-making process:

• Review your PSHB plan options before Open Season to ensure the best fit with Medicare.

• Plan for Medicare Part B enrollment if you’re retiring after 2025 to maintain PSHB coverage.

• Take advantage of coordinated benefits to reduce out-of-pocket expenses.

• Understand your prescription drug coverage under the EGWP program.

If you have questions about how Medicare and PSHB work together, speaking with a licensed agent listed on this website can provide personalized guidance based on your specific situation.