Key Takeaways

• If you’re a Postal Service retiree, your PSHB plan coordinates with Medicare, affecting costs, coverage, and provider access. Enrolling in Medicare Part B is crucial to maximize benefits.

• The PSHB transition in 2025 means understanding how Medicare integration impacts premiums, deductibles, and cost-sharing. Reviewing your options ensures you get the best possible coverage.

How Medicare and PSHB Work Together in 2025

With the shift to the Postal Service Health Benefits (PSHB) program in 2025, understanding how your healthcare benefits interact with Medicare is more important than ever. Whether you’re an active USPS employee planning for retirement or already retired, knowing how these systems coordinate can help you avoid unnecessary costs and ensure you receive seamless care.

The Basics of Medicare and PSHB

• Medicare is the federal health insurance program for people 65 and older or those with qualifying disabilities. It consists of Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage).

• PSHB is replacing FEHB for postal retirees and employees. Many plans within PSHB are designed to work alongside Medicare to reduce your out-of-pocket costs.

Since this transition affects nearly every USPS retiree, it’s essential to understand how these two systems interact.

What Happens When You Enroll in Medicare?

If you’re retired and eligible for Medicare, enrolling in Part A and Part B is generally required to maintain PSHB coverage. Here’s how they work together:

• Medicare Becomes Your Primary Insurance – Once enrolled, Medicare pays first for your covered healthcare services, while your PSHB plan becomes secondary, covering some remaining costs.

• Lower Out-of-Pocket Costs – With Medicare, your PSHB deductibles, copays, and coinsurance can be significantly reduced or even eliminated, depending on the plan.

• Access to More Providers – Enrolling in Medicare allows you to see any provider nationwide that accepts Medicare, expanding your healthcare options.

• Prescription Drug Coverage Adjustments – If you have Medicare Part D, PSHB coordinates your prescription benefits through an Employer Group Waiver Plan (EGWP) to reduce costs.

How PSHB Benefits Change When You Have Medicare

If you’re eligible for Medicare, your PSHB plan will coordinate differently than it did under FEHB. Here’s what you need to know:

1. Premium Adjustments

Your PSHB premiums remain the same, but your Medicare enrollment could lead to reduced overall costs. Some PSHB plans may offer partial reimbursements for your Medicare Part B premiums, helping offset expenses.

2. Reduced Deductibles and Copayments

Most PSHB plans waive or significantly lower deductibles, copays, and coinsurance when Medicare is your primary insurance. Without Medicare, your out-of-pocket costs for services like hospital stays and specialist visits could be higher.

3. Provider Flexibility

With Medicare as primary coverage, you are not limited to PSHB in-network providers. You can visit any doctor or hospital that accepts Medicare without needing referrals or pre-authorizations from PSHB.

4. Out-of-Pocket Maximums

In 2025, PSHB plans have annual out-of-pocket maximums that vary depending on the plan. Since Medicare covers a large portion of medical expenses, your actual costs under PSHB could be significantly lower compared to those without Medicare.

What If You Choose Not to Enroll in Medicare?

If you don’t enroll in Medicare Part B, your PSHB plan remains your primary insurance, but there are consequences:

• Higher Out-of-Pocket Costs – Without Medicare, you bear the full cost of deductibles and coinsurance under your PSHB plan.

• Limited Coverage Options – Some providers may require Medicare as primary coverage before accepting PSHB.

• Late Enrollment Penalties – If you delay enrolling in Medicare Part B, you may face permanent penalties that increase your monthly premium.

For most USPS retirees, enrolling in Medicare maximizes benefits and keeps healthcare costs predictable.

How Prescription Drug Coverage Works

1. Medicare Part D and PSHB

If you have Medicare Part D, your PSHB plan will coordinate through an Employer Group Waiver Plan (EGWP). This setup:

• Automatically enrolls Medicare-eligible annuitants into a Medicare Part D prescription drug plan.

• Lowers overall drug costs by utilizing both Medicare and PSHB benefits.

• Provides catastrophic drug coverage protections under Medicare rules.

2. Without Medicare Part D

If you don’t enroll in Medicare Part D, your PSHB plan still offers prescription drug benefits, but they may not be as cost-effective as a combined Medicare-PSHB arrangement.

Key Deadlines and Enrollment Periods

Missing enrollment deadlines can result in penalties or gaps in coverage. Here’s what you need to keep in mind:

• Initial Medicare Enrollment Period (IEP): Starts 3 months before you turn 65 and lasts 7 months.

• General Enrollment Period (GEP): Runs January 1 – March 31 each year, with coverage beginning in July.

• PSHB Open Season: Typically November to December, when you can switch PSHB plans if needed.

• Special Enrollment Period (SEP): If you’re still working past 65, you can delay Medicare without penalty and enroll within 8 months after leaving USPS.

Choosing the Right PSHB Plan with Medicare

Not all PSHB plans coordinate with Medicare in the same way. When selecting a plan, consider:

• Whether the plan offers Medicare Part B premium reimbursements

• How much the plan reduces copays and deductibles when paired with Medicare

• Which providers and hospitals are covered under both Medicare and PSHB

• Whether vision, dental, and hearing benefits are included

• How your prescription costs align with the plan’s drug formulary

• Out-of-network coverage options if you travel frequently

Reviewing these details ensures you maximize your benefits while keeping healthcare costs manageable.

What This Means for USPS Retirees

The transition to PSHB in 2025 is a major shift in how USPS retirees receive health benefits. If you’re already retired or planning to retire soon, staying informed about Medicare coordination helps you make the best financial and healthcare decisions.

To explore your Medicare and PSHB options, consider speaking with a licensed agent listed on this website for personalized guidance.