Key Takeaways

• You can enroll in both PSHB and Medicare for broader healthcare coverage in 2025, but understanding how the two work together is essential to avoiding duplicate costs or reduced benefits.

• While combining both options can lower your out-of-pocket costs, it may also require you to follow stricter rules, meet specific eligibility conditions, and monitor how coverage is applied between programs.

PSHB and Medicare: A Dual Option in 2025

As a Postal Service employee or annuitant, you now have access to the new Postal Service Health Benefits (PSHB) Program, which officially replaced FEHB for USPS participants in 2025. At the same time, if you’re 65 or older—or otherwise eligible—you also qualify for Medicare.

This creates an important opportunity: you can be enrolled in both PSHB and Medicare. However, to benefit fully, you must understand how each program works individually, how they interact, and what decisions you need to make.

Why You Might Want Both

Having both PSHB and Medicare in place can:

• Reduce out-of-pocket costs by coordinating benefits.

• Provide a wider range of coverage, especially for high-cost services.

• Help you meet deductibles faster due to overlapping cost-sharing structures.

• Ensure you remain covered even if one program does not pay fully.

However, having both is not always automatic or simple. You must know the eligibility rules, enrollment deadlines, and cost responsibilities to avoid unnecessary complications.

Eligibility Rules You Need to Know

Medicare Eligibility

You’re eligible for Medicare if:

• You are 65 or older.

• You’re under 65 with certain disabilities.

• You have end-stage renal disease (ESRD) or ALS.

You can enroll in:

• Part A (hospital insurance), usually premium-free.

• Part B (medical insurance), which comes with a monthly premium.

PSHB Eligibility

You’re eligible for PSHB in 2025 if you:

• Are a USPS employee or annuitant.

• Were previously enrolled in FEHB and transitioned to PSHB.

• Enroll during Open Season (November to December) or experience a qualifying life event.

If you’re Medicare-eligible and a Postal Service annuitant, you’re generally required to enroll in Medicare Part B to maintain full PSHB medical coverage—unless you meet one of the specific exemption categories.

Timing and Enrollment Windows Matter

Enrollment in both programs depends heavily on strict timeframes:

• Medicare Initial Enrollment Period (IEP): 3 months before, the month of, and 3 months after your 65th birthday.

• General Enrollment Period (GEP): January 1 to March 31 each year if you missed your IEP. Coverage begins July 1.

• Special Enrollment Period (SEP): For those who delayed Medicare due to other coverage, such as PSHB.

• PSHB Open Season: Held annually from November through December.

Missing deadlines can mean late penalties for Medicare Part B and possible gaps in PSHB coverage. This is particularly important in 2025, as the new PSHB rules now align more closely with Medicare requirements.

What Each Program Covers

PSHB Coverage

PSHB plans cover:

• Preventive care

• Primary and specialty doctor visits

• Hospitalization

• Prescription drugs (via integrated Part D for Medicare enrollees)

• Mental health services

Cost-sharing includes:

• In-network copayments ($20–$60 per visit depending on service)

• Coinsurance (typically 10%–30% in-network)

• Deductibles ($350–$2,000 depending on plan tier)

Medicare Coverage

Medicare Parts A and B cover:

• Inpatient care (Part A)

• Outpatient care and doctor visits (Part B)

• Preventive screenings

• Limited home health care and rehab services

In 2025:

• Part A has a $1,676 deductible per benefit period.

• Part B has a monthly premium of $185 and an annual deductible of $257.

Medicare does not fully cover:

• Long-term care

• Most dental and vision services

• Hearing aids

• Custodial nursing care

Who Pays First: Medicare or PSHB?

When you’re enrolled in both PSHB and Medicare, coordination of benefits determines which pays first.

• If you’re retired and have Medicare Parts A and B, Medicare pays first, and PSHB acts as secondary coverage.

• If you’re still actively employed by USPS, PSHB pays first, and Medicare is secondary.

Knowing this is vital when scheduling surgeries, imaging, or high-cost procedures. It can directly affect:

• How much you’re billed.

• Whether prior authorizations are required.

• Whether balance billing applies.

Prescription Drug Coverage Coordination

If you’re Medicare-eligible and enrolled in PSHB, your prescription coverage is typically provided through a Medicare Part D Employer Group Waiver Plan (EGWP). This integration brings benefits like:

• A $2,000 cap on out-of-pocket drug costs starting in 2025.

• Automatic Part D enrollment through PSHB.

• Lower copayments for many common prescriptions.

• Monthly payment options for high drug costs.

Opting out of this drug plan may result in losing all PSHB drug coverage. You may also face penalties if you try to re-enroll later.

Weighing the Tradeoffs

Financial Tradeoffs

Having both programs usually reduces your medical bills—but it increases your monthly premiums. In 2025, PSHB premiums plus Medicare Part B can add up quickly.

However, many PSHB plans offer incentives for Medicare enrollees, such as:

• Part B premium reimbursements.

• Waived deductibles.

• Lower copays and coinsurance.

But these vary by plan and only apply if you stay enrolled in both.

Administrative Complexity

Maintaining both PSHB and Medicare coverage requires careful management:

• Claims may need to be submitted to both Medicare and your PSHB plan.

• Errors can occur in processing, especially if providers are unfamiliar with coordination rules.

• Some services may need to be pre-approved by the secondary payer.

This coordination works best when you choose in-network providers familiar with both systems.

Coverage Redundancy

Some services covered by PSHB are also fully covered by Medicare. This overlap can make you feel like you’re paying twice for the same protection. However, redundancy can provide peace of mind in case one program denies a claim or limits coverage.

Understanding Exemptions and Exceptions

You may not be required to enroll in Medicare Part B if you:

• Retired on or before January 1, 2025, and are not already enrolled in Part B.

• Are age 64 or older as of January 1, 2025.

• Live overseas without access to Medicare services.

• Receive VA or Indian Health Services benefits.

If you fall into one of these categories, you can keep your PSHB plan without Part B. But be aware: you may face higher costs or fewer benefits compared to those who have both.

Making the Right Choice for Your Health in 2025

To decide whether to enroll in both PSHB and Medicare, consider:

• Your current and projected health needs.

• Your financial capacity to pay premiums.

• Your comfort with navigating dual coverage rules.

• Whether your doctors accept Medicare and are in your PSHB network.

• Whether the plan offers extra incentives for having Medicare.

Getting this decision right means you’ll avoid coverage gaps, minimize out-of-pocket spending, and access the providers you want.

Planning Ahead Before Open Season

Use the months leading up to the Open Season (November to December) to:

• Review your current PSHB plan and any notices of changes.

• Compare PSHB plans that coordinate well with Medicare.

• Confirm your Medicare enrollment status.

• Contact a licensed agent listed on this website for one-on-one guidance.

PSHB is still new in 2025, and this year’s Open Season is one of the most important yet—especially for retirees navigating Medicare integration.

Know What to Expect From Your Combined Coverage

As long as you stay on top of timelines, coordination rules, and cost-sharing structures, having both PSHB and Medicare can work well. But misunderstandings can be expensive.

If you miss enrollment deadlines, misunderstand primary vs. secondary payer status, or don’t check whether providers accept both plans—you may face bills you didn’t anticipate.

Staying informed is your best strategy for making these benefits work for you, not against you.

Learn How These Programs Fit Together Before You Enroll

Your decision to combine PSHB and Medicare should not be made lightly. While the coverage can be powerful, the tradeoffs are real—both financial and administrative. Take the time to review your options thoroughly, and don’t hesitate to reach out to a licensed agent listed on this website for professional advice tailored to your situation.