Key Takeaways

• Missing Medicare Part B enrollment when required can result in the loss of prescription drug coverage under your PSHB plan.

• Once disrupted, Medicare and PSHB coordination issues can lead to higher out-of-pocket costs and limited re-enrollment options.

Why Your Medicare Decision Matters So Much Under PSHB

When the Postal Service Health Benefits (PSHB) program launched in 2025, it came with a crucial Medicare integration requirement for annuitants and eligible family members. If you’re entitled to Medicare Part A and are enrolled in a PSHB plan, you’re generally required to also enroll in Medicare Part B to maintain full PSHB benefits. If you don’t, your coverage will be affected—and in ways that aren’t always easy to undo.

This requirement represents more than just red tape. It influences your access to doctors, hospitals, prescriptions, and overall out-of-pocket expenses. In short, making the wrong Medicare decision can set off a domino effect on your PSHB coverage.

The Medicare Part B Rule for PSHB Annuitants

As of January 1, 2025, Medicare-eligible PSHB annuitants and family members must be enrolled in both Medicare Part A and Part B to remain fully covered by a PSHB plan.

This applies if:

• You’re a Postal Service annuitant enrolled in Medicare Part A.

• You’re a covered family member eligible for Medicare Part A.

There are exceptions, but they are narrowly defined. You may be exempt if:

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

• You or your covered family member reside abroad.

• You’re a beneficiary of Indian Health Services or the VA.

If none of these apply and you’re eligible for Part B, you must enroll. Otherwise, your PSHB coverage becomes severely limited.

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

Failing to enroll in Medicare Part B when required triggers several consequences:

• Prescription drug coverage is dropped. PSHB plans integrate with a Medicare Part D Employer Group Waiver Plan (EGWP). Without Part B, you’re excluded from this, and PSHB plans will remove your prescription benefits.

• Medical costs go up. You’ll be responsible for the full cost of services that Medicare would otherwise cover first, which could mean higher deductibles and coinsurance.

• No second chances for drug coverage. Once you opt out of Medicare Part B and lose PSHB drug coverage, you generally can’t get it back unless you re-enroll in Part B.

Timing Is Critical: Enrollment Periods You Can’t Miss

Initial Enrollment Period (IEP)

This 7-month window begins three months before you turn 65, includes your birthday month, and extends three months after.

If you enroll during this period, your Medicare Part B coverage starts smoothly with no penalties.

Special Enrollment Period (SEP) for PSHB

The Office of Personnel Management (OPM) provided a one-time Special Enrollment Period from April 1 through September 30, 2024 for annuitants to sign up for Part B without penalty. This has now ended.

If you missed this SEP, your only option is the General Enrollment Period from January 1 to March 31 each year, with coverage starting July 1—and late penalties may apply.

Why the Drug Coverage Link Matters

PSHB plans offer prescription benefits through a Medicare Part D EGWP. This integrated benefit depends on your Medicare Part B enrollment. If you decline Part B, you’re no longer eligible for the drug benefit.

The 2025 Medicare Part D structure includes a $2,000 annual out-of-pocket cap and a broader pharmacy network. But this only applies if you’re enrolled in both Medicare Part A and Part B. Without it, you lose access to these enhanced protections, and you’ll be left covering your medication costs out-of-pocket or seeking private drug coverage elsewhere.

You Could Be Paying More Than You Realize

Avoiding Medicare Part B to save on the monthly premium may seem like a good idea—until you run the numbers:

• PSHB cost-sharing increases without Medicare. Your coinsurance rates, deductibles, and copayments could all jump.

• No EGWP means no $2,000 cap on drugs. You’ll face uncapped medication costs.

• You lose cost coordination. Normally, Medicare pays first, and your PSHB plan picks up the rest. Without Part B, your plan becomes your primary insurer, which costs more.

These changes don’t just affect one year—they accumulate over time. A single mistake can snowball into thousands of dollars in additional costs.

Re-Enrolling Later Isn’t Simple

If you decline Part B and later change your mind, you can’t just sign up whenever you want. You’ll have to wait for the General Enrollment Period and may pay a late enrollment penalty—10% for every 12-month period you delayed Part B after becoming eligible.

Even if you do enroll later, your PSHB prescription drug coverage may not automatically resume. Some plans allow re-enrollment in their EGWP coverage after rejoining Medicare Part B, but others don’t. You’ll need to confirm this directly with your plan.

What to Check Before You Decline Part B

Before making a Medicare decision, make sure you:

• Know your eligibility status. Just because you’re enrolled in Medicare Part A doesn’t mean you’re exempt from the Part B rule.

• Understand your plan’s drug coverage terms. Not all PSHB plans handle re-enrollment the same way.

• Check cost-sharing differences. Use your PSHB plan brochure to compare benefits with and without Medicare.

• Review your timeline. If you’re approaching age 65 or retiring soon, act early.

Don’t Confuse FEHB Rules With PSHB Rules

Under FEHB, you could choose to skip Medicare Part B and still retain your full drug and medical coverage. That’s no longer the case under PSHB in 2025.

This is a major shift, and it trips up many annuitants who assume PSHB works the same way. The rules are stricter now—and mistakes are costlier.

Coordination of Benefits: Medicare Always Comes First

For Medicare-eligible enrollees, Medicare becomes the primary payer once you’re retired. Your PSHB plan serves as secondary payer. That means:

• Medicare pays first for covered services.

• Your PSHB plan pays remaining eligible costs (after deductibles, coinsurance, or copays).

If you don’t enroll in Medicare Part B, your PSHB plan becomes the only payer—and you’re stuck with a higher share of the cost.

Medicare + PSHB = Stronger Coverage When Aligned

When you’re enrolled in both Medicare Part A and Part B, and your PSHB plan integrates properly, your total healthcare burden is usually much lighter:

• Reduced or waived deductibles

• Lower out-of-pocket maximums

• Extra coverage for chronic conditions

• Prescription drug protections under EGWP

This synergy is the foundation of the PSHB program’s design in 2025. Without it, you lose much of the plan’s value.

It’s Not Just About You: Family Members Are Affected Too

If you have family members on your PSHB plan who are Medicare-eligible, they also need to be enrolled in Medicare Part B to maintain full benefits.

This often affects spouses who turn 65 or have a disability. Failing to coordinate enrollment timelines within your household can jeopardize their access to drug coverage and increase your household’s total out-of-pocket burden.

The Long-Term Impact of One Misstep

One Medicare misstep can trigger a cascade:

• You lose prescription benefits.

• You face late enrollment penalties.

• Your PSHB plan costs more.

• You can’t rejoin your previous drug plan.

• Your family’s coverage gets disrupted.

All of this stems from a single error—often made out of confusion or a desire to save a few hundred dollars on premiums.

In contrast, getting it right the first time leads to a coordinated, cost-efficient setup that supports you for the long haul.

Make Medicare Part of Your PSHB Planning Strategy

Your Medicare choices directly shape your PSHB benefits. Don’t treat Medicare enrollment like a separate decision. It’s part of your overall strategy—and needs the same level of attention as plan selection and retirement budgeting.

Talk with a licensed agent listed on this website to evaluate your Medicare status, understand your PSHB options, and make sure your plan works as it should.