Key Takeaways

• Medicare and PSHB can coordinate well together in 2025, but only if you understand how billing, claims, and secondary coverage work.

• Issues can arise if enrollment steps are missed, if providers misunderstand the coordination, or if the coverage rules between the two systems clash.

The Basics: Medicare and PSHB Side by Side

When you enroll in Medicare and maintain Postal Service Health Benefits (PSHB) coverage, you typically enjoy layered protection against healthcare costs. In 2025, Medicare remains the primary payer for eligible services, and PSHB acts as the secondary payer.

This setup usually means:

• Medicare pays first.

• PSHB picks up many of the remaining costs, such as copayments, coinsurance, or deductibles.

• Your out-of-pocket burden is often significantly reduced compared to having only one type of coverage.

For retirees who are Medicare-eligible, PSHB plans are specifically designed to integrate with Medicare Part A (hospital insurance) and Part B (medical insurance). If you don’t enroll in Medicare Part B when required, your PSHB benefits can change dramatically.

When You Must Enroll in Medicare Part B

If you are a Postal Service retiree who became Medicare-eligible on or after January 1, 2025, you are required to enroll in Medicare Part B to maintain full PSHB benefits. Missing this enrollment can:

• Limit your coverage.

• Increase your costs.

• Restrict your provider access.

However, retirees who were already retired before January 1, 2025, are generally exempt from this mandatory Part B enrollment.

What Each Program Covers in 2025

Understanding the split between Medicare and PSHB responsibilities can help you set accurate expectations:

• Medicare Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services.

• Medicare Part B covers outpatient care, preventive services, ambulance services, durable medical equipment, and limited prescription drugs.

• PSHB plans often cover additional services like dental, vision, and hearing, which traditional Medicare alone does not fully cover.

• PSHB also helps with cost-sharing, by covering parts of Medicare-approved services that would otherwise result in high coinsurance.

Where It Gets Tricky: Common Friction Points

Even when Medicare and PSHB are both active, problems can arise in a few key areas:

1. Provider Confusion

Some healthcare providers may not be familiar with PSHB plans. They might:

• Bill the wrong payer.

• Assume PSHB is a “Medigap” plan (it’s not).

• Refuse to bill PSHB altogether.

You may need to remind providers that PSHB acts as secondary insurance after Medicare has paid.

2. Out-of-Network Charges

Medicare covers services from any provider nationwide who accepts Medicare. However, your PSHB plan may still have its own network preferences. While many PSHB plans coordinate well even out-of-network, some cost protections may weaken if your provider is out-of-network for your PSHB plan.

3. Prior Authorization Requirements

Even after Medicare approves a service, your PSHB plan might still require prior authorization for certain treatments, tests, or hospitalizations. Failure to obtain this could mean:

• Denial of secondary coverage.

• Unexpected bills.

4. Late Enrollment Penalties

If you delay enrolling in Medicare Part B when required, you could face:

• Lifetime premium penalties.

• Reduced PSHB benefits.

• Limited eligibility for enhanced drug coverage under the PSHB-linked Medicare Part D options.

How Billing Works Between Medicare and PSHB

Billing order matters. In 2025, the process usually flows like this:

1. Your provider sends the bill to Medicare.

2. Medicare processes the claim and pays its share.

3. Medicare electronically forwards the remaining balance to your PSHB plan.

4. Your PSHB plan processes the claim and pays according to its benefits.

5. You are billed only for any remaining patient responsibility.

Many PSHB plans now use automated systems that minimize paperwork for enrollees. However, it is still smart to track your Explanation of Benefits (EOBs) to ensure claims are processed correctly.

Prescription Drug Coverage in 2025: Medicare Part D and PSHB

If you are Medicare-eligible, your PSHB plan will generally provide prescription drug coverage through an integrated Medicare Part D Employer Group Waiver Plan (EGWP).

Key features in 2025 include:

• An annual $2,000 out-of-pocket spending cap for covered prescription drugs.

• Expanded pharmacy networks.

• Enhanced benefits for insulin users, such as $35 monthly caps.

If you opt out of this Part D coverage, you could lose access to your PSHB plan’s drug benefits entirely.

Premium Payments You Need to Budget For

In 2025, you’ll likely need to budget for:

• Medicare Part B premium (standard amount is $185 monthly).

• Your PSHB plan premium (varies by plan and coverage type).

Both are independent obligations. You cannot “skip” one without consequences. The two work together to protect you, but you must keep both in good standing.

Avoiding Common Enrollment Mistakes

If you are approaching Medicare eligibility, protect yourself by:

• Enrolling in Medicare Part A and Part B during your Initial Enrollment Period (IEP).

• Reviewing PSHB materials during Open Season (November to December).

• Ensuring your PSHB enrollment accurately reflects your Medicare status.

• Watching for notices about plan changes related to Medicare integration.

Special Enrollment Periods (SEPs) exist if you qualify based on events like retirement, but missing these windows can trigger penalties.

What Happens If You Don’t Enroll Correctly

If you don’t enroll in Medicare Part B when required:

• Your PSHB coverage will still exist, but it will be secondary to “nothing.”

• You will be responsible for large portions of medical costs that Medicare would have paid.

• Some services may not be covered at all.

In short, failing to enroll in Medicare correctly is not just a minor inconvenience — it can devastate your healthcare budget.

Tips for Coordinating Your Coverage

You can minimize frustration by:

• Carrying both your Medicare card and your PSHB ID card to all appointments.

• Informing providers of your two insurance plans.

• Setting up Medicare “Medicare Summary Notices” (MSNs) to monitor claims.

• Reviewing PSHB EOBs to catch discrepancies early.

Staying Proactive for Future Changes

Healthcare rules change. What’s true in 2025 may evolve in 2026 or beyond. Stay proactive by:

• Checking plan brochures annually.

• Attending any webinars or postal service retiree health meetings.

• Contacting a licensed insurance agent listed on this website if you are unsure about how upcoming changes affect you.

Why Coordination Between Medicare and PSHB Matters More Than Ever

In 2025, the cost of healthcare continues to rise. Medicare and PSHB together can still deliver strong, affordable protection — but only if you understand how the two systems align. Minor mistakes can create big gaps. Take time to understand your responsibilities, act early, and use professional help when needed.

If you have questions about your Medicare and PSHB options, get in touch with a licensed insurance agent listed on this website to ensure you make the most of your benefits.