Key Takeaways

• Even if you are already enrolled in a PSHB plan in 2025, Medicare Part B enrollment may still be mandatory, depending on your retirement date and age.

• Declining Medicare when required can lead to the loss of certain PSHB benefits, including prescription drug coverage and cost-sharing reductions.

The Overlap That Isn’t Redundant

If you’re covered under a Postal Service Health Benefits (PSHB) plan, it’s easy to assume that Medicare is just an optional extra. After all, PSHB offers extensive medical coverage. But in 2025, for many annuitants and family members, Medicare—especially Part B—is far from optional.

Under current federal requirements, you may be mandated to enroll in Medicare Part B to continue receiving full PSHB benefits. Ignoring or postponing Medicare enrollment when required can reduce your coverage and increase your out-of-pocket expenses significantly.

Who Is Required to Enroll in Medicare Part B?

Not every PSHB member must enroll in Medicare Part B, but a clear set of rules applies in 2025:

• You must enroll in Part B if you are a Medicare-eligible Postal Service annuitant or eligible family member and you retired after January 1, 2025.

• You are exempt from mandatory Part B enrollment if you retired on or before January 1, 2025.

• If you are still employed and age 65 or older, you may defer Medicare enrollment until retirement without penalty.

Additionally, employees who were 64 or older as of January 1, 2025 are also exempt from the mandatory enrollment rule. However, if you fall outside of this exception, you’re expected to enroll in Part B once eligible.

Why the Requirement Exists

The mandate to enroll in Medicare Part B is not arbitrary. It is rooted in the cost-saving structure of the PSHB program. Here’s how it works:

• Coordination of benefits: Once you are enrolled in both PSHB and Medicare Part B, Medicare becomes your primary payer and PSHB becomes secondary. This significantly reduces the financial burden on the PSHB plan.

• Enhanced cost sharing: Many PSHB plans offer lower deductibles, waived coinsurance, and reduced copays only if you have Medicare Part B.

• Prescription drug coverage: You are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) through your PSHB plan. But to maintain this, you need Part B.

This integration isn’t just for efficiency—it’s tied directly to your coverage. Declining Part B when required means you could lose access to this enhanced coordination of benefits.

What Happens If You Decline Medicare?

The consequences of opting out of Medicare Part B when it’s required are not subtle. Here’s what you risk losing:

• Reduced coverage: PSHB plans may treat you as having incomplete coverage, meaning you could face higher deductibles, full coinsurance rates, and denied claims.

• Prescription drug access: You may be disenrolled from the PSHB Medicare Part D EGWP drug coverage if you do not have Part B.

• No re-entry opportunity: Once you’re dropped from Part D coverage through PSHB for refusing Part B, you can’t simply re-enroll midyear unless you qualify for a Special Enrollment Period.

These consequences are spelled out in PSHB program documents, and enforcement began on January 1, 2025.

Special Exemptions and Considerations

There are limited but important exemptions from the Medicare requirement under PSHB:

• You’re living outside the United States and are not eligible for Medicare coverage.

• You are receiving care through the VA or Indian Health Service, which is recognized as equivalent federal coverage.

• You retired before 2025 and are not currently enrolled in Medicare Part B.

In these cases, you may not be forced into Part B enrollment. But it is still crucial to understand the trade-offs if you voluntarily choose to skip Medicare.

The Costs You Need to Know

Some members avoid Medicare Part B due to its monthly premium. In 2025, the standard premium is $185 per month, and the annual deductible is $257. These figures can increase for individuals with higher income levels due to Income-Related Monthly Adjustment Amounts (IRMAA).

But when comparing these costs to the value of enhanced PSHB coordination, lower cost-sharing, and full prescription drug coverage, skipping Medicare rarely offers savings in the long term.

You Still Need to Act—Even If You’re Automatically Enrolled

While many PSHB members will be automatically enrolled in a new plan during Open Season, Medicare coordination is not automatic unless you’ve already signed up for Part B.

You will still need to:

• Confirm your Medicare enrollment status.

• Check that your PSHB plan is aware of your Medicare eligibility.

• Opt in to PSHB’s integrated pharmacy benefits, which are tied to your Medicare enrollment.

Failure to confirm these steps can result in billing issues or denied claims.

Open Season Doesn’t Change the Rules

PSHB enrollment during the annual Open Season from November to December allows you to change plans—but not your Medicare requirement.

Even if you switch to a different PSHB plan during Open Season, the Part B requirement stays the same. Your selected plan will check Medicare enrollment status before activating full benefits.

In 2025, many PSHB plans are offering added incentives for Medicare enrollees, including:

• Lower out-of-pocket maximums

• Waived deductibles

• Extra wellness benefits

But again, these incentives often apply only if you’re enrolled in Medicare Part B.

Planning for the Transition

If you are turning 65 soon or retiring in 2025, make Medicare enrollment part of your checklist. Your Initial Enrollment Period (IEP) begins 3 months before your 65th birthday and continues for 3 months after. Enroll during this window to avoid lifetime late penalties.

If you miss your IEP, you’ll have to wait for the General Enrollment Period (January 1–March 31), and your coverage won’t begin until July 1—leaving a gap in benefits.

Also, delaying enrollment can trigger a 10% premium increase for each 12-month period you should have been enrolled in Part B but weren’t.

Understanding the PSHB–Medicare Pharmacy Link

One of the most overlooked parts of the PSHB and Medicare relationship is pharmacy coverage. You can’t fully access your PSHB drug benefit if you opt out of Medicare Part B.

In 2025, most PSHB plans use an Employer Group Waiver Plan (EGWP) for Medicare-eligible members, tied to Part D. But eligibility for this benefit is contingent upon being enrolled in Medicare Part B.

Declining Part B means losing:

• Access to the EGWP drug plan

• Reduced insulin costs

• Expanded pharmacy networks

• The new $2,000 cap on annual out-of-pocket drug expenses

This loss could result in thousands more in out-of-pocket costs annually.

It’s Not Just You—Family Members Are Affected Too

If your spouse or covered family member is Medicare-eligible, they too may need to enroll in Medicare Part B to maintain full PSHB benefits. The same rules apply:

• If they are Medicare-eligible and covered under your PSHB plan, they must have Part B if they are not exempt.

• Coverage gaps, drug plan removal, and cost-sharing penalties apply to them as well if they’re not enrolled.

Keeping your household covered requires confirming everyone’s Medicare enrollment status.

Why Medicare Still Has a Place in 2025

Medicare might feel like an extra burden if you’re already paying for PSHB, but it is now a structural part of how the plan is designed to function—especially for retirees.

Instead of viewing Medicare as optional, understand it as a foundation that allows your PSHB plan to deliver enhanced benefits. It reduces your personal costs, ensures access to prescription drug protection, and aligns with how all new PSHB plans are structured.

Failing to enroll in Medicare when required is no longer just a personal decision—it can disqualify you from benefits you expected to rely on in retirement.

Make the Right Move With Help

Understanding the Medicare requirement under PSHB isn’t always easy, and the implications of skipping enrollment can be serious. If you’re unsure whether you’re required to enroll, or what steps to take, speak with a licensed agent listed on this website. They can walk you through your timeline, evaluate your options, and make sure you’re positioned for uninterrupted coverage.