Key Takeaways

• In 2025, Medicare Part D prescription drug coverage is now integrated directly into PSHB for Medicare-eligible postal retirees and family members.

• Understanding how this integration works and what it replaces is crucial to avoid losing essential prescription drug coverage or duplicating benefits.

The Shift to PSHB Prescription Drug Coverage in 2025

If you’re a Medicare-eligible postal retiree or a covered family member, you now receive your prescription drug benefits through the Medicare Part D Employer Group Waiver Plan (EGWP) built into your PSHB plan. This change marks a major departure from the old FEHB structure and requires new awareness on your part as a plan member.

In prior years under FEHB, you had the option to enroll separately in a Medicare Part D plan, but it wasn’t required. Now, with the Postal Service Health Benefits (PSHB) program replacing FEHB for postal workers and retirees starting January 1, 2025, prescription drug coverage is automatically included—provided you’re enrolled in Medicare Part B and meet eligibility criteria.

How the Medicare Part D Integration Works

The integration is not optional for those who qualify. Here’s what you need to know:

• Automatic Enrollment: If you’re enrolled in Medicare Part A and Part B, you will automatically be enrolled in your PSHB plan’s EGWP.

• No Standalone Part D Plans Needed: You do not need (and should not enroll in) a separate standalone Medicare Part D plan. Doing so may cause coordination issues or disenrollment from PSHB drug coverage.

• Built-in Coverage: Your PSHB plan provides prescription drug benefits through a Medicare Part D EGWP, which functions like a group Medicare Part D plan tailored for postal retirees.

What This Means for Your Coverage

This transition to PSHB with embedded Part D has several immediate implications:

• Simplified Enrollment: There’s no need to navigate the standalone Medicare Part D market anymore.

• Expanded Access: The EGWP often includes an enhanced formulary and broader pharmacy network than what was available through FEHB alone.

• Part D Protections Apply: You are now fully protected by Medicare Part D rules—including the new $2,000 annual out-of-pocket cap.

Why You Need Medicare Part B to Keep Drug Coverage

Unlike previous years, your eligibility for the PSHB drug benefit hinges on your enrollment in Medicare Part B. Without Part B, you may forfeit access to prescription drug coverage under PSHB, leaving you exposed to high out-of-pocket drug costs.

• Part B Is Now a Gateway: If you qualify but are not enrolled in Part B, your PSHB plan may exclude you from its EGWP.

• Enrollment Deadline Passed in 2024: A Special Enrollment Period ran from April to September 2024 to allow eligible retirees to enroll in Part B without a late penalty. If you missed it, you may face delays and penalties.

• 2025 Ongoing Requirement: Going forward, you must maintain Medicare Part B enrollment to keep the drug coverage portion of your PSHB active.

What Happens If You Opt Out of EGWP?

You do have the ability to opt out of the EGWP portion of your PSHB plan—but doing so is strongly discouraged unless you have alternate, creditable coverage.

Consequences include:

• Loss of PSHB Drug Coverage: Your PSHB plan will not provide any prescription drug coverage if you opt out.

• Limited Re-enrollment Rights: You may not be able to rejoin the PSHB drug plan until a future Open Season or qualifying life event.

• Potential Gaps in Coverage: Opting out may leave you with no Part D coverage unless you independently enroll in another Part D plan, which can trigger coordination problems.

How the $2,000 Out-of-Pocket Cap Affects You

One of the biggest changes to Medicare Part D in 2025 is the introduction of a $2,000 annual cap on out-of-pocket prescription drug expenses. This is a major improvement over prior years, where catastrophic coverage phases left beneficiaries paying coinsurance indefinitely.

Under PSHB:

• Cap Applies Automatically: If you’re in the EGWP, your drug costs stop at $2,000 annually.

• No More Donut Hole: The coverage gap is gone. Once you hit $2,000 in out-of-pocket drug expenses, your plan covers the rest.

• Lower Risk of Budget Shocks: This cap provides predictable cost protection that wasn’t available under the FEHB structure.

Coordinating with Your Existing FEHB Coverage (If Any)

While PSHB replaces FEHB for postal retirees in 2025, there are limited scenarios where coordination may still be relevant:

• Family Members Not Yet Medicare Eligible: If you’re part of a Self Plus One or Self and Family plan, your non-Medicare-eligible dependents may still receive coverage through the regular PSHB medical and drug plan.

• No Dual Part D Coverage Needed: You should not be enrolled in any separate Part D plan if you’re receiving drug benefits through PSHB.

Premiums and Cost-Sharing Expectations

Even though PSHB drug benefits are part of your health plan, they are governed by Medicare Part D rules. Here’s how this affects your costs:

• No Separate Premium: The cost of drug coverage is bundled with your PSHB premium.

• Part B Premium Still Applies: You must continue paying the standard Medicare Part B premium ($185/month in 2025), plus any IRMAA surcharge if applicable.

• Cost-Sharing Applies: You’ll pay copayments or coinsurance for prescriptions until you hit the $2,000 annual limit.

The Role of the Medicare Prescription Payment Plan

Also new in 2025 is the option to pay for your out-of-pocket drug costs in monthly installments rather than all at once. Known as the Medicare Prescription Payment Plan, this feature can help you manage costs more evenly throughout the year.

• Applies to Out-of-Pocket Drug Costs: Once enrolled in the PSHB EGWP, you can choose this option to spread out payments.

• No Interest or Late Fees: The plan allows monthly payments with no added costs.

• Voluntary Enrollment: You must opt in if you want to use this installment option.

Enrollment, Appeals, and Plan Support

The PSHB program has built-in support for its drug coverage. Here’s what to expect:

• Automatic Enrollment Notifications: If you’re eligible, you were notified during the 2024 Open Season.

• Help with Appeals: If a drug is denied or not covered, you can use the standard Medicare Part D appeals process.

• Customer Support: Your PSHB plan has a help line for drug coverage questions, pharmacy network issues, and appeals guidance.

Actions to Take Right Now

You don’t have to wait until the next Open Season to get organized. Here’s what you can do now:

• Verify Your Medicare Enrollment: Confirm that you’re enrolled in both Part A and Part B.

• Check for EGWP Enrollment: Review your PSHB plan materials or call your plan to confirm you’re enrolled in the prescription drug portion.

• Avoid Duplicate Coverage: Cancel any separate Medicare Part D plans to avoid conflicts.

• Consider the Payment Plan: If you expect high drug costs, explore the monthly payment option.

Why Staying Informed About PSHB Drug Coverage Matters

Prescription drug coverage is no longer a side issue for postal retirees. In 2025, it’s central to how your PSHB plan works—especially if you’re Medicare-eligible. Missing deadlines, opting out accidentally, or ignoring Part B requirements can all result in lost coverage, higher costs, or both.

To ensure your benefits stay intact, speak with a licensed agent listed on this website. They can review your current plan, confirm your Medicare enrollment status, and help you understand how your PSHB drug benefits work now and in the future.