Key Takeaways

• In 2025, understanding how Medicare works with your Postal Service Health Benefits (PSHB) plan is essential, especially if you’re a retiree or nearing retirement age.

• Certain Medicare enrollment requirements and cost-sharing rules apply specifically to PSHB participants and can affect your access to care and out-of-pocket costs.

Medicare Basics Still Matter in the PSHB Era

Just because you’re part of the PSHB program doesn’t mean you can tune out Medicare. In fact, understanding Medicare is more important than ever in 2025, especially because PSHB now coordinates closely with Medicare Part A and Part B for eligible retirees and family members.

Whether you’re retired or planning ahead, knowing how Parts A, B, and D interact with your PSHB plan will help you avoid coverage gaps, unnecessary expenses, and enrollment penalties.

Who Needs to Worry About Medicare in PSHB?

Not everyone in PSHB needs to enroll in Medicare. But if you meet any of the following conditions, you should be paying close attention:

• You’re a retiree who turned 65 before or during 2025

• You’re a family member covered under a retiree’s PSHB plan and you’re eligible for Medicare

• You’re turning 65 soon and plan to retire shortly afterward

If you fall into any of these groups, then Medicare Part B enrollment is not just important — it may be mandatory.

Medicare Part B Is Now Required for Many Annuitants

The PSHB rules introduced in 2025 require most Medicare-eligible annuitants and family members to enroll in Medicare Part B to maintain full PSHB medical and prescription coverage.

Who Is Required to Enroll in Part B?

You must enroll in Medicare Part B unless you are:

• A retiree who retired on or before January 1, 2025, and is not already enrolled in Part B

• An employee aged 64 or older as of January 1, 2025

• Living abroad in a region where Medicare doesn’t apply

• Covered by Indian Health Services or Veterans Affairs in a way that satisfies PSHB exceptions

If you’re not in one of these categories and you’re Medicare-eligible, you are required to enroll in Part B. Failing to do so may result in loss of medical coverage under PSHB.

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

If you’re required to enroll in Medicare Part B and fail to do so, you will lose your medical coverage under PSHB. Your prescription drug coverage may also be affected, especially because PSHB drug benefits for Medicare enrollees are coordinated through a Medicare Part D Employer Group Waiver Plan (EGWP).

You can only opt out of Medicare Part D through PSHB if you specifically decline the EGWP option, but doing so will also mean losing access to PSHB drug benefits.

Understanding the Timeline: When to Enroll in Medicare

You become eligible for Medicare starting three months before the month you turn 65. Your Initial Enrollment Period (IEP) runs for seven months: three months before, the month of, and three months after your 65th birthday.

For 2025, if you delayed enrolling in Part B because you were still working, you may be eligible for a Special Enrollment Period (SEP) once you retire. This SEP generally lasts for 8 months after your job-based coverage ends.

If you miss both your IEP and SEP, you can enroll during the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. However, coverage starts in July and late penalties may apply.

PSHB Prescription Drug Coverage Depends on Medicare Coordination

All Medicare-eligible retirees and covered family members under PSHB will automatically be enrolled in a Medicare Part D EGWP unless they actively opt out.

This EGWP gives you access to:

• A $2,000 annual out-of-pocket cap on prescription drugs

• A $35 monthly insulin cap

• Enhanced formulary and pharmacy network access

If you opt out of this coverage, you will lose your prescription drug benefits under PSHB and will not be able to rejoin later unless you meet specific re-enrollment conditions.

How PSHB Plans Coordinate With Medicare Parts A and B

If you’re enrolled in Medicare Part A and B, your PSHB plan becomes a secondary payer for most medical services. That typically results in significant savings.

What You Can Expect:

• Lower or waived deductibles: Many PSHB plans reduce or eliminate their own deductibles when you also have Medicare Part B.

• Lower copayments and coinsurance: Because Medicare pays first, your PSHB plan may only need to pay the remaining balance.

• No need to meet multiple deductibles: When Medicare is primary, some services may bypass the plan’s cost-sharing thresholds altogether.

The Costs of Medicare in 2025: What You Need to Budget For

Even though PSHB and Medicare work together to reduce costs, there are still some expenses you need to plan for.

Medicare Part A (Hospital Insurance):

• Premiums: Usually free if you’ve worked at least 10 years.

• Deductible: $1,676 per benefit period.

• Coinsurance: $419 per day (days 61–90), $838 per day beyond that using lifetime reserve days.

Medicare Part B (Medical Insurance):

• Monthly premium: $185 standard, more if you’re subject to IRMAA.

• Deductible: $257 annually.

• Coinsurance: Typically 20% after deductible, though PSHB may cover this balance.

Medicare Part D (Prescription Drug Coverage via PSHB EGWP):

• Deductible: Up to $590 in 2025, though many PSHB-integrated plans waive this.

• Out-of-pocket cap: $2,000 for the year, a major benefit under the 2025 reforms.

Why Medicare Still Matters Even if You Think You Have Full Coverage

Many retirees assume their PSHB plan will cover everything. But the integration of Medicare into PSHB in 2025 means your benefits, costs, and even eligibility for certain services are shaped by your Medicare status.

Failing to enroll in Medicare Part B if you’re required to can cost you your entire PSHB medical coverage. And not understanding how drug coverage works under Medicare Part D and the EGWP could leave you paying more than you need to—or with gaps in your access to necessary medications.

What About Medicare Advantage?

While some may hear about Medicare Advantage as an alternative, the PSHB program does not use private Medicare Advantage plans. Instead, it integrates with Original Medicare (Parts A and B) and provides supplemental benefits through federal employer-based coverage.

There’s no option within PSHB to switch to or choose a Medicare Advantage plan. Your benefits remain within the framework of Original Medicare and your selected PSHB plan.

Other Federal Benefits Remain Unchanged

Your eligibility for other federal benefit programs such as:

• FEDVIP (Dental and Vision)

• FEGLI (Life Insurance)

• FSAFEDS (Flexible Spending Accounts)

• FLTCIP (Long-Term Care Insurance)

…is not affected by your Medicare enrollment. However, these programs do not coordinate with Medicare in the same way PSHB does, so you should manage them separately.

How to Get Help With Medicare and PSHB Decisions

If you’re unsure whether you need to enroll in Medicare or how it will affect your PSHB benefits, help is available. Review your eligibility notices, Annual Notice of Change (ANOC) letters, and Medicare communications.

You can also speak with a licensed agent listed on this website to:

• Clarify your Medicare enrollment timeline

• Understand how your PSHB plan coordinates with Medicare

• Learn how much you might save by enrolling in Medicare Part B

• Avoid penalties and gaps in coverage

Medicare and PSHB Together Define Your Retirement Coverage

Even though PSHB offers robust benefits, it’s not meant to work alone for retirees. Medicare is no longer optional for most annuitants in 2025. Instead, it’s a required piece of your overall healthcare picture.

Understanding how Medicare Part A, B, and D fit into your PSHB coverage is key to protecting your access to care and avoiding unnecessary out-of-pocket costs. Don’t rely on assumptions or outdated information.

Take the time now to review your situation and contact a licensed agent listed on this website for guidance. Your retirement coverage depends on it.