Key Takeaways

• Medicare Part B enrollment is no longer a simple choice for many Postal Service annuitants—it’s now a PSHB requirement under certain conditions.

• If you or your covered family member is eligible for Medicare, skipping Part B could jeopardize your PSHB coverage and prescription benefits.

Understanding What Changed in 2025

As of January 1, 2025, the Postal Service Health Benefits (PSHB) Program officially replaced the Federal Employees Health Benefits (FEHB) Program for Postal Service employees, annuitants, and their eligible family members. While this transition brought along many familiar coverage elements, it also introduced new rules—especially when it comes to Medicare.

One of the most critical updates is that Medicare Part B is now a required piece of the healthcare puzzle for many retirees and covered family members. The integration of Medicare and PSHB is no longer just about saving money or expanding benefits—it may determine whether you’re even allowed to keep your health and prescription coverage at all.

Who Must Enroll in Medicare Part B

The requirement to enroll in Medicare Part B applies under specific conditions in 2025. You must enroll in Medicare Part B if:

• You are a Medicare-eligible annuitant or family member

• You are enrolled in a PSHB plan

• You do not meet any of the exemption criteria listed by OPM and the USPS

You are exempt from the requirement if:

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

• You are an active employee aged 64 or older as of January 1, 2025

• You reside outside the United States

• You receive VA or Indian Health Service (IHS) benefits as your primary coverage

Everyone else falling outside these exemptions must enroll in Medicare Part B to maintain full PSHB coverage, including integrated prescription benefits.

What Happens If You Don’t Enroll?

If you’re required to enroll in Medicare Part B and fail to do so, your PSHB plan will not provide prescription drug coverage through the Medicare Part D Employer Group Waiver Plan (EGWP). In many plans, this results in the loss of prescription drug coverage altogether.

Worse yet, there are limitations on re-enrolling in PSHB prescription coverage if you opt out of Part B and later change your mind. The re-enrollment window is restricted and may not occur annually. This makes skipping Medicare Part B a risky choice, both financially and medically.

How Medicare Part B Works with PSHB

When you enroll in both Medicare Part B and a PSHB plan, your coverage becomes coordinated—not duplicated. Medicare typically pays first, and your PSHB plan pays second. This means:

• Lower out-of-pocket costs: Many PSHB plans reduce or waive deductibles, coinsurance, and copayments when paired with Medicare Part B.

• Reduced prescription drug expenses: Thanks to integration with a Medicare Part D EGWP, you benefit from the $2,000 out-of-pocket cap now in effect in 2025.

• No double premiums: Though you pay separate premiums for PSHB and Medicare Part B, many plans offer premium reimbursements or reduced cost-sharing to offset this.

The Medicare Prescription Drug Integration

In 2025, all PSHB plans include automatic enrollment into a Medicare Part D Employer Group Waiver Plan for those eligible. This integration:

• Caps your annual out-of-pocket drug costs at $2,000

• Includes a $35 insulin cap

• Gives access to a broader pharmacy network

However, this only applies if you’re also enrolled in Medicare Part B. Without Part B, you are disqualified from the Part D benefit within your PSHB plan, even if you are otherwise eligible.

Timing Is Everything

You become eligible for Medicare at age 65. In 2025, your Initial Enrollment Period (IEP) for Medicare begins three months before your 65th birthday, includes your birth month, and extends three months after. Missing this 7-month window can result in:

• A late enrollment penalty that lasts for life

• A gap in coverage while you wait for the General Enrollment Period (January 1 to March 31 each year)

If you’re already past age 65 and newly subject to the PSHB requirement, there was a Special Enrollment Period from April 1 to September 30, 2024, to sign up for Medicare Part B without penalty. If you missed that period and didn’t enroll, your next opportunity may not come until the general period, with coverage starting July 1.

Key Enrollment Actions You Must Take

To remain in full compliance and avoid disruptions in care or costs:

• Check your Medicare eligibility status now

• Confirm your PSHB enrollment details—whether you’re an annuitant or family member

• Enroll in Medicare Part B if required and not yet enrolled

• Verify that your PSHB plan includes Medicare coordination benefits

Delaying action can have costly consequences, including prescription coverage loss and late penalties.

Common Misunderstandings You Should Clear Up

• “I already have FEHB, so I don’t need Medicare.” This was often true under FEHB, but PSHB changed the rules. Now, skipping Medicare Part B could cost you your drug coverage.

• “I can enroll later without issues.” Not always. Re-enrollment isn’t guaranteed yearly, and you could face coverage gaps or penalties.

• “Medicare and PSHB will overlap too much.” Actually, the two work together to reduce your total costs—especially in 2025 with capped drug spending.

Why This Shift Was Introduced

This new requirement isn’t arbitrary. It was introduced to:

• Align the Postal Service with broader Medicare policy expectations

• Reduce federal and USPS healthcare costs through coordinated benefits

• Improve retiree healthcare coverage by combining resources

With Medicare covering a primary portion of expenses, PSHB plans can reduce premium increases and still provide comprehensive care.

Comparing Costs With and Without Part B

While you do pay for both PSHB and Medicare Part B premiums, skipping Part B can result in significantly higher out-of-pocket costs due to:

• Higher deductibles

• Greater coinsurance or copayment amounts

• Complete loss of prescription drug benefits in many cases

In 2025, Medicare Part B’s standard monthly premium is $185, with an annual deductible of $257. If you qualify for income-based reductions, these figures may be lower.

Coordination with Other Benefits

Enrolling in Medicare Part B may also affect how your healthcare aligns with:

• Tricare for Life (for eligible veterans)

• VA or Indian Health Services (which may exempt you from the PSHB Medicare rule)

• Other employer-based coverage (which may coordinate differently)

Always review how these benefits interact to avoid overlapping coverage or unintended gaps.

Where You Can Get Reliable Help

The PSHB transition involves new systems, rules, and timelines. Fortunately, you don’t have to go through it alone. For tailored advice about:

• Medicare eligibility

• Enrollment requirements

• PSHB plan selection

• Coordination of benefits

Get in touch with a licensed agent listed on this website. They can walk you through the timing, costs, and plan features so you make confident decisions.

When Your Next Step Matters Most

Medicare might have once felt like a personal decision based on your budget or health preferences. But in 2025, the PSHB system rewrites that script. If you’re eligible and not exempt, enrolling in Medicare Part B is more than smart—it’s necessary.

Now is the time to act. Whether you’re a recent retiree, approaching age 65, or helping a family member prepare, reviewing your PSHB and Medicare options can protect your access to vital coverage.

Reach out to a licensed agent listed on this website to clarify your Medicare Part B status and ensure your PSHB benefits stay fully intact.