Key Takeaways

• Your Medicare Part B premium continues to increase in 2025 due to factors like rising healthcare costs, legislative changes, and income-related adjustments.

• As a PSHB enrollee, coordinating Medicare with your postal health benefits can help reduce your overall medical expenses, but only if you understand how premiums are determined and what options are available.

Why Your Premium Isn’t Staying the Same

You may have noticed that your Medicare Part B premium rarely stays flat. In 2025, the standard premium is $185 per month, an increase from previous years. This steady rise often feels frustrating, especially when you’re already managing other retirement expenses. But understanding why premiums go up can help you plan ahead and possibly find ways to limit your costs.

Several drivers contribute to this increase:

1. Healthcare Inflation

Medical services, outpatient care, and doctor visits are more expensive now than they were even a year ago. The federal government adjusts Medicare Part B premiums each year to reflect the actual and projected cost of providing outpatient services to beneficiaries.

2. Increased Utilization

The demand for services covered under Part B has grown. More diagnostic imaging, outpatient surgeries, chronic condition management, and durable medical equipment are being used. With higher usage comes increased costs to the program.

3. Legislative Adjustments

Policy changes enacted by Congress or CMS can shift how much is spent from the Medicare trust fund, which in turn affects how much you pay. For example, drug price negotiations, spending caps, or new coverage rules might lead to downstream cost shifts.

4. Income-Related Monthly Adjustment Amount (IRMAA)

If your income exceeds certain thresholds, you may pay more than the standard premium. In 2025, these thresholds begin at $106,000 for individuals and $212,000 for couples filing jointly. This income-related adjustment can significantly increase your monthly Part B premium, even if your medical needs haven’t changed.

What PSHB Enrollees Need to Know About These Increases

As a Postal Service Health Benefits (PSHB) enrollee, you occupy a unique position in the Medicare landscape. Unlike the general public, you have a federal benefit package that integrates with Medicare, but you must meet specific criteria for your coverage to work properly.

Medicare Part B Is Mandatory for Some PSHB Annuitants

Starting in 2025, Medicare-eligible annuitants and family members must be enrolled in Medicare Part B to maintain PSHB coverage, unless they fall into an exemption category. If you retired on or before January 1, 2025, or were age 64 or older as of that date, you may be exempt from the requirement.

If you are required to enroll and don’t, you risk losing your PSHB coverage altogether.

Medicare Enrollment Can Trigger Cost Savings Under PSHB

Many PSHB plans coordinate with Medicare to reduce your out-of-pocket costs. These benefits may include:

• Lower deductibles

• Reduced copayments

• Enhanced drug coverage through a Medicare Part D EGWP

However, these savings only kick in if you are enrolled in Medicare Parts A and B. If you delay Part B enrollment, you lose access to these benefits and may face late enrollment penalties.

Your Premium Is Based on 2023 Tax Data

The Social Security Administration uses your modified adjusted gross income (MAGI) from two years prior to determine whether IRMAA applies. For 2025, your 2023 tax return is the basis.

If your income has dropped significantly since then due to retirement, divorce, or another qualifying life event, you may request a reconsideration using Form SSA-44. This could reduce your premium to the standard $185 per month or below if you qualify for assistance.

Strategies to Manage or Offset Your Part B Premium

While you cannot eliminate Medicare Part B premiums, there are ways to reduce the burden or avoid unnecessary penalties.

Appeal an IRMAA Decision

If you’re being charged more than the standard rate and your circumstances have changed since 2023, submit a request for lower IRMAA through Social Security. This applies in cases of:

• Retirement

• Marriage or divorce

• Loss of income-producing property

• Employer settlement payout

Use Form SSA-44 and include documentation to support your appeal.

Coordinate Effectively With PSHB

If you’re already enrolled in Part B, ensure you’re enrolled in a PSHB plan that complements Medicare. Plans vary in how well they integrate. Some offer:

• Full reimbursement of Part B premiums

• Waived deductibles

• Lower coinsurance for Medicare-covered services

You can review and switch plans during the November to December Open Season.

Time Your Retirement and Enrollment

If you are approaching retirement and near age 65, it’s essential to understand how your Medicare eligibility intersects with your PSHB benefits. Enrolling in Medicare during your Initial Enrollment Period (IEP) ensures you avoid penalties. Your IEP begins three months before your 65th birthday, includes your birth month, and ends three months after.

If you miss this window, you must wait for the General Enrollment Period (January 1 to March 31), and your coverage won’t start until July 1. This could leave a gap in benefits and result in higher premiums due to penalties.

Consider Premium Reimbursement Plans

Some PSHB plans offer partial or full premium reimbursements for enrollees with Medicare Part B. These reimbursements can come in the form of:

• Monthly credits

• Annual reimbursements

• Health Reimbursement Arrangements (HRAs)

Check your plan brochure to see if you’re eligible and how to apply for the reimbursement.

Other Important Cost Considerations for 2025

Besides the monthly premium, Medicare Part B has other costs you should be aware of.

Annual Deductible

In 2025, the Part B deductible is $257. This is the amount you must pay out-of-pocket before Medicare starts covering your outpatient services. Some PSHB plans will pay this amount for you, depending on the plan design.

Coinsurance After the Deductible

Once you meet the deductible, you usually pay 20% of the Medicare-approved amount for most services. However, with PSHB coordination, some or all of this cost may be covered by your health plan.

Late Enrollment Penalty

If you delay enrolling in Part B and don’t qualify for a Special Enrollment Period (such as having active employment coverage), you’ll pay a late enrollment penalty. This penalty adds 10% to your monthly premium for each 12-month period you could have enrolled but didn’t. It is permanent.

High-Income Surcharges

As previously mentioned, IRMAA applies to higher-income individuals and can raise your monthly premium significantly. The surcharge tiers rise progressively, so even a small increase in MAGI can push you into the next bracket.

Understanding the Role of Your PSHB Plan

Your PSHB plan isn’t just a secondary payer. It plays a crucial role in shaping how much you actually spend on healthcare once you’re enrolled in Medicare. But this only works effectively if you:

• Choose a plan that coordinates well with Medicare

• Enroll in Medicare Parts A and B on time

• Review your plan benefits each Open Season to ensure you’re getting maximum value

Most PSHB plans are structured to work seamlessly with Medicare once you’re eligible. Still, not all provide the same level of integration or premium reimbursement. That’s why reviewing your plan details annually is critical.

Don’t Ignore Your ANOC Letter

Each fall, your plan will send you an Annual Notice of Change (ANOC). This document outlines any changes to:

• Premiums

• Deductibles

• Covered services

• Cost-sharing

Reviewing this letter can help you decide if your current plan still fits your needs or if it’s time to switch. Open Season gives you that opportunity each year.

Reviewing Your Situation Is Key to Staying Ahead

Medicare Part B premium increases are a reality, but that doesn’t mean you’re powerless. As a PSHB enrollee, you have tools and strategies to keep your healthcare costs in check. The most effective steps include:

• Knowing your enrollment deadlines

• Appealing IRMAA if applicable

• Reviewing and switching plans during Open Season

• Taking advantage of premium reimbursement programs

Small proactive measures today can prevent unexpected costs down the road.

How to Make Smart Decisions About Your Coverage

Choosing when and how to enroll in Medicare Part B, and how to coordinate it with your PSHB plan, requires planning. Don’t wait until you get hit with a higher premium or a denial of coverage to act.

If you’re unsure which plan aligns best with your Medicare enrollment, or if you’re concerned about rising premiums, now is the time to speak with a licensed agent listed on this website. They can help you evaluate your options and ensure you stay compliant and covered.