Key Takeaways

• Enrolling in a PSHB plan while eligible for Medicare means both programs actively coordinate benefits, which can significantly impact your coverage and costs.

• In 2025, many PSHB plans offer lower cost-sharing and other incentives if you’re enrolled in Medicare Part B, but failing to enroll could lead to higher expenses and reduced access to integrated benefits.

Medicare Isn’t Passive—It Plays a Defining Role in PSHB

If you’re a Postal Service annuitant or family member eligible for Medicare in 2025, enrolling in the Postal Service Health Benefits (PSHB) Program isn’t as simple as choosing a health plan and moving on. Medicare becomes a critical factor that directly shapes how your benefits work—and how much you end up paying.

Many assume that Medicare stays in the background once PSHB kicks in. That’s not how it works. Your eligibility for Medicare, especially Part B, influences how your PSHB plan is structured and what you can expect in terms of out-of-pocket costs, pharmacy benefits, and even access to care.

Let’s break down what this means for you in real terms.

PSHB Plans Are Built to Work With Medicare

In 2025, PSHB plans are designed with the expectation that eligible annuitants and their covered family members will enroll in Medicare Part B when eligible. Here’s how the programs work together:

• Medicare Part A (Hospital Insurance) covers inpatient hospital stays, skilled nursing facility care, and some home health care.

• Medicare Part B (Medical Insurance) covers outpatient care, preventive services, doctor visits, and durable medical equipment.

• Your PSHB Plan functions as a secondary payer when you are enrolled in Medicare Parts A and B, covering many costs that Medicare does not.

When Medicare is in play, PSHB plans often waive deductibles, reduce copayments, and cover prescription drugs more generously through a Medicare Part D Employer Group Waiver Plan (EGWP).

Enrolling in Part B Can Lower Your Total Costs

If you’re eligible for Medicare and choose not to enroll in Part B, your PSHB plan may become your primary payer instead of Medicare. This could lead to significantly higher out-of-pocket expenses, especially for outpatient services.

By contrast, enrolling in Part B in 2025 often comes with:

• Lower deductibles in your PSHB plan

• Reduced coinsurance or copayments for doctor visits

• Better coordination of benefits for chronic conditions or complex care

• Access to enhanced pharmacy networks under the integrated Part D EGWP

While you do have to pay a monthly premium for Medicare Part B ($185 in 2025), the reduction in other healthcare costs may more than make up for it over the course of the year.

The Mandatory Medicare Part B Rule Isn’t for Everyone

As of January 1, 2025, certain Postal Service annuitants and family members are required to enroll in Medicare Part B to maintain PSHB coverage. This includes:

• Anyone who is entitled to Medicare and retires after January 1, 2025

• Family members covered under your PSHB plan who are also entitled to Medicare

But there are exceptions. You’re not required to enroll in Part B if:

• You retired on or before January 1, 2025

• You’re employed by USPS and were 64 or older as of January 1, 2025

• You live outside the U.S.

• You are covered by VA or Indian Health Services

Even if you’re not required to enroll, doing so can still offer significant advantages, particularly with cost-sharing and integrated benefits.

Prescription Drugs Are Tied to Medicare Enrollment

One of the most overlooked aspects of PSHB in 2025 is the integration of Medicare Part D through EGWP plans. These plans are specifically created for Medicare-eligible enrollees who also have PSHB coverage.

When you are enrolled in Medicare, your PSHB drug benefits are enhanced:

• You get access to a broader pharmacy network

• There’s a $2,000 cap on out-of-pocket drug costs

• Many plans include insulin coverage capped at $35 per month

But if you don’t enroll in Medicare, you won’t be eligible for this integrated Part D coverage. That means:

• You’ll lose access to PSHB prescription drug coverage

• You won’t be able to re-enroll unless you become newly Medicare-eligible again

This makes your Medicare decision crucial not just for hospital and medical services, but for your medications as well.

Enrollment Timing Can Affect Your Benefits

Timing is everything when it comes to enrolling in Medicare. Here’s what to watch out for:

• Initial Enrollment Period (IEP): Starts 3 months before you turn 65 and lasts for 7 months.

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

• Special Enrollment Period (SEP): You had one if you were transitioning from fehb to PSHB in 2024 and needed to enroll in Part B without penalty.

Missing your enrollment window can trigger late penalties and delayed coverage, and if you’re subject to the PSHB Medicare requirement, you may even lose eligibility for PSHB drug benefits.

Cost Sharing Without Medicare Can Be a Surprise

Many enrollees are shocked to learn how much more they pay when they decline Medicare. Here’s what can happen if you’re only on PSHB and skip Medicare Part B:

• You may pay the full PSHB deductible, often between $350 and $2,000 depending on your plan

• Coinsurance may apply for outpatient visits, lab work, or specialists—sometimes as high as 30%

• You’ll pay higher copayments for primary care and specialist visits

• Your maximum out-of-pocket costs can be significantly higher

Compare that to what happens when you have Medicare as your primary and PSHB as secondary: those cost-sharing amounts are usually waived or drastically reduced.

PSHB Plans Assume Medicare Will Be Primary

Another important detail is that PSHB plans in 2025 are structured assuming Medicare is your primary insurer once you’re eligible. That affects not just benefits, but claims processing and coverage limits.

If you skip Medicare Part B:

• Your PSHB plan might not pay for services that Medicare would have covered first

• You could be responsible for costs that would have otherwise been fully covered

• You’ll likely see longer claims processing times and higher billing totals

This coordination of benefits isn’t optional—it’s foundational to how PSHB works.

What If You’re Already on Medicare?

If you were already enrolled in Medicare prior to 2025 and moved into the PSHB system this year, your coverage will transition more smoothly. Your Medicare Part A and B benefits continue, and your PSHB plan becomes secondary.

Just be sure your Medicare enrollment is active and up to date:

• Confirm that your Medicare Part B premium is being paid

• Ensure you’re not enrolled in a standalone Part D plan, as PSHB integrates drug coverage through EGWP

• Verify that you’ve not opted out of PSHB drug coverage, which may be irreversible

How Medicare Affects Family Members Under PSHB

PSHB isn’t just about you. If your spouse or other covered family members are eligible for Medicare, their enrollment status also impacts:

• Whether PSHB acts as primary or secondary for them

• Their eligibility for enhanced pharmacy coverage

• Whether your household pays more or less out-of-pocket

Every family member’s Medicare status matters under PSHB. Coordination isn’t just individual—it’s household-wide.

Why This Year Matters More Than Most

2025 is the first full year of the PSHB system in effect. That means all the coordination between PSHB and Medicare is actively being implemented, and the way you respond to it has long-term consequences.

• The Medicare Part B requirement began this year for most new retirees

• Prescription drug benefits are fully tied to Medicare EGWP now

• Automatic enrollment doesn’t mean automatic integration—you still have decisions to make

Your Health Plan Choice Should Factor in Medicare

When you’re choosing a PSHB plan during Open Season (November to December), make sure you’re looking at how the plan treats Medicare enrollees:

• Does it offer lower deductibles or copays for those with Medicare?

• Is there full coverage coordination for inpatient and outpatient care?

• Does it provide integrated drug benefits through Medicare Part D?

Not all PSHB plans treat Medicare the same way, so review brochures and ask questions before selecting a plan.

Understanding Medicare’s Role Now Can Save You Later

Don’t treat Medicare as background noise—it’s central to how your PSHB coverage functions in 2025. Whether you’re an annuitant, family member, or just turning 65, your choices about Medicare affect everything from cost sharing to access to care.

If you’re unsure how to proceed, get in touch with a licensed agent listed on this website. They can help you assess your eligibility, compare PSHB options, and avoid common Medicare pitfalls that could cost you down the line.