Key Takeaways

• Medicare Part B in 2025 carries a standard monthly premium of $185, but higher-income enrollees may pay significantly more.

• Enrollment timing, income brackets, and coordination with Postal Service Health Benefits (PSHB) plans can greatly influence your actual Part B costs.

Understanding Medicare Part B Costs in 2025

When you reach eligibility for Medicare, many people assume the “government coverage” is automatically free. However, Medicare Part B—which covers medical services like doctor visits, outpatient care, and preventive services—requires monthly premiums and other out-of-pocket costs. As a Postal Service retiree or worker transitioning into Medicare alongside your PSHB plan, it’s important to know exactly what you’re signing up for and how it affects your wallet.

Medicare Part B: A Quick Overview

Medicare Part B is part of Original Medicare. It covers:

• Doctor’s visits

• Outpatient services

• Durable medical equipment

• Preventive services (like vaccines and screenings)

• Ambulance services

Unlike Medicare Part A (which is often premium-free if you have enough work credits), Part B always has a premium—even if you’ve paid Medicare taxes during your working years.

Monthly Premiums You Should Expect

For 2025, the standard Medicare Part B premium is $185 per month. This applies if your modified adjusted gross income (MAGI) from two years prior—meaning your 2023 tax return—falls below certain income thresholds.

If your income is higher, you’ll be subject to an Income-Related Monthly Adjustment Amount (IRMAA). Here are the basic thresholds for 2025:

• Individuals earning over $106,000

• Married couples filing jointly earning over $212,000

If you cross these income levels, you’ll pay more than the standard $185, with higher premiums divided into several income brackets.

Late Enrollment Penalties That Can Sneak Up

Missing your Initial Enrollment Period (IEP) could trigger lifelong penalties. Your IEP starts three months before your 65th birthday, includes the month you turn 65, and extends three months after—a total of seven months.

If you don’t sign up during this window and aren’t eligible for a Special Enrollment Period, your monthly premium may increase by 10% for each full 12-month period you were eligible but didn’t enroll. This penalty applies for life.

The General Enrollment Period (GEP) runs from January 1 to March 31 every year, but coverage doesn’t start until July 1—potentially leaving you exposed to uncovered health expenses if you miss your IEP.

Part B Deductibles and Cost Sharing in 2025

In addition to the monthly premium, there are other costs:

• Annual Deductible: $257 in 2025

• Coinsurance: After meeting your deductible, you generally pay 20% of the Medicare-approved amount for services.

These costs can quickly add up if you need frequent medical care, even with your PSHB plan coordination.

How PSHB and Medicare Part B Work Together

If you are a Postal Service retiree, you must now coordinate PSHB with Medicare. For Medicare-eligible enrollees, PSHB requires enrollment in Medicare Part B to maintain full benefits, unless you meet a rare exemption.

Once you enroll:

• Medicare Part B becomes your primary payer.

• PSHB becomes your secondary payer, covering costs that Medicare doesn’t (like coinsurance and copayments).

• Many PSHB plans waive or significantly reduce your deductibles and cost-sharing if you have Part B.

Thus, having both PSHB and Part B can sharply reduce your overall out-of-pocket healthcare expenses, even though it adds a premium cost.

Income Changes That Can Affect Your Part B Premium

If your income has dropped significantly since your 2023 tax return (due to retirement, divorce, death of a spouse, or other qualifying life events), you can request a reconsideration of your IRMAA bracket.

Social Security processes these requests. You will need to submit Form SSA-44 and documentation of your income change.

Mistakes to Avoid When Managing Part B Enrollment

There are several costly mistakes you can avoid:

• Ignoring Your IEP: Missing your Initial Enrollment Period can lead to late penalties and delayed coverage.

• Overlooking IRMAA Appeals: Not appealing if you qualify for lower income brackets can cost you hundreds monthly.

• Failing to Enroll in Time for PSHB Requirements: If you fail to enroll in Medicare Part B when required, you risk losing valuable secondary benefits under your PSHB plan.

How Premiums Are Paid

If you already receive Social Security benefits, your Part B premium is deducted automatically from your monthly benefit.

If you’re not receiving Social Security yet, you’ll receive a bill quarterly. There are several options to pay:

• Direct billing

• Online payment through Medicare.gov

• Automatic bank withdrawal

What Happens If You Delay Social Security but Need Part B?

You don’t have to claim Social Security to enroll in Medicare Part B. Many Postal retirees prefer to delay Social Security to increase their future benefits but still enroll in Medicare during their IEP to avoid penalties.

Remember, you must actively enroll through the Social Security Administration, and you will be billed directly if not drawing Social Security.

Common Confusion Points with Part B

Several areas often confuse Postal retirees and workers:

• Part B and FEHB/PSHB Enrollment: Even if you already have PSHB coverage, Medicare Part B enrollment is mandatory to maintain full PSHB benefits when eligible.

• Dual Premiums: You’ll pay for both PSHB and Medicare Part B, though your combined out-of-pocket costs for healthcare services will usually be lower.

• Prescription Drug Coverage: Medicare Part D coverage is separate. For Postal retirees, PSHB plans generally include integrated prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP).

Impact of 2025 Changes on Your Healthcare Planning

The rules around PSHB integration with Medicare are new as of 2025. Every postal retiree or annuitant needs to understand:

• You must enroll in Medicare Part B to maintain PSHB coverage unless you qualify for an exception.

• If you opt out of Part B without an exemption, your PSHB benefits may be limited, especially for major medical services.

The 2025 PSHB transition makes the stakes higher. If you are approaching Medicare eligibility, planning ahead is crucial.

Frequently Asked Questions

Do I have to enroll in Medicare Part B if I have PSHB?

Yes, unless you are exempt (such as retiring before January 1, 2025, or meeting another exemption category).

Can I delay Part B if I’m still working for USPS after 65?

Yes. Active Postal employees can delay enrolling without penalty as long as they maintain PSHB coverage through employment. Special Enrollment Period rules apply when employment ends.

Will PSHB cover my Part B premium?

Some PSHB plans may offer partial reimbursement of Part B premiums as an added benefit, but this varies by plan. Review your specific plan’s brochure carefully.

What if I already have FEHB instead of PSHB?

If you are a Postal retiree, your coverage transitions to PSHB starting January 1, 2025. Your enrollment actions and Medicare requirements will follow PSHB rules.

Strategic Steps You Should Take Now

• Mark your calendar for your Initial Enrollment Period.

• Review your 2023 tax return to anticipate possible IRMAA surcharges.

• Plan your retirement timing if you are approaching Medicare eligibility while still actively working.

• Contact Social Security early to start your Part B enrollment process.

• Review your PSHB plan options during Open Season to optimize your Medicare integration.

Your action today could make a major financial difference tomorrow.

Securing Your Health and Finances for 2025 and Beyond

Understanding the real cost of Medicare Part B is essential when planning your retirement healthcare expenses as a Postal Service retiree or worker. The transition to PSHB, income-related adjustments, penalties for late enrollment, and the coordination between Medicare and PSHB all make it more important than ever to have a well-thought-out plan.

If you need personalized help, connect with a licensed insurance agent listed on this website to walk you through your options and ensure you are properly enrolled.