Key Takeaways

• Once Medicare becomes your primary coverage, PSHB acts as secondary insurance, but how well it works depends on the choices you make before and after enrollment.

• You should evaluate your PSHB plan’s coordination with Medicare to ensure deductibles, coinsurance, and prescription coverage continue to offer the protection you expect.

What Happens When Medicare Becomes Primary

When you reach age 65 and enroll in Medicare Part A and Part B, Medicare generally becomes your primary insurance. This is especially true if you’re retired and no longer actively working for the Postal Service. At that point, your PSHB plan functions as your secondary payer.

Here’s what that means in practical terms:

• Medicare pays first for eligible services.

• Your PSHB plan pays second, covering remaining coinsurance, deductibles, and services that Medicare doesn’t fully pay for.

• If you do not enroll in Medicare Part B when required, your PSHB plan may act as the primary payer, but it may not cover everything Medicare would have.

The transition from primary to secondary status can leave unexpected gaps in coverage if you don’t review your plan details carefully.

Coordination of Benefits: How PSHB and Medicare Work Together

Your PSHB plan is designed to coordinate with Medicare, but not all plans function the same way. Most plans offer the following when you are enrolled in both Medicare Part A and Part B:

• Waived deductibles for inpatient and outpatient services

• Lower copayments or coinsurance for doctor visits and procedures

• Enhanced pharmacy benefits through Medicare Part D integration

Coordination only works efficiently when both parts of Medicare are in place. If you skip Part B, many of these benefits are reduced or unavailable.

PSHB Coverage Without Medicare Part B

If you’re required to enroll in Medicare Part B under PSHB rules and choose not to, your plan may reduce its benefits. For example:

• Some services may only be partially covered or denied altogether.

• Out-of-pocket costs like coinsurance could be significantly higher.

• You might pay the full cost of services that would have been fully covered if Medicare had been primary.

In 2025, Medicare Part B enrollment is mandatory for many annuitants and their dependents unless they qualify for a listed exemption. That includes individuals who:

• Retired after January 1, 2025, and are Medicare-eligible

• Are enrolled as a dependent on a Medicare-eligible annuitant’s PSHB plan

Failing to enroll could mean:

• Loss of drug coverage through the integrated Part D benefit

• Higher total medical costs

• Limited re-enrollment opportunities for Part D drug coverage later

Prescription Drug Benefits After Medicare Becomes Primary

In 2025, PSHB integrates a Medicare Part D Employer Group Waiver Plan (EGWP) for annuitants with Medicare. This Part D coverage includes:

• A $2,000 annual out-of-pocket maximum for covered prescriptions

• Access to a broad pharmacy network

• A $35 monthly cap on insulin

When you’re enrolled in both Medicare and PSHB, your drug coverage becomes more generous. However, if you decline the integrated Medicare Part D coverage, you may:

• Lose PSHB prescription drug coverage entirely

• Be unable to re-enroll later unless you meet special conditions

Keep in mind, PSHB drug coverage differs once Medicare is primary, and understanding these differences ensures you don’t overpay for your medications.

Cost Sharing: What PSHB Still Covers

With Medicare primary and PSHB secondary, your out-of-pocket responsibility often decreases—but only if your PSHB plan is structured to complement Medicare. In most cases, you can expect:

• Reduced coinsurance for hospital and outpatient services

• Lower copayments for specialist visits

• Elimination or reduction of annual deductibles

In 2025, the PSHB out-of-pocket maximums for in-network services are:

• $7,500 for Self Only

• $15,000 for Self Plus One and Self and Family

If your plan coordinates well with Medicare, you may not come close to reaching these limits. But if you miss required Medicare enrollment, your PSHB plan may no longer waive or reduce these costs.

Scenarios That Affect Coverage Adequacy

Not all PSHB enrollees experience the same outcome once Medicare becomes primary. Several factors determine whether your coverage remains robust:

1. Timing of Medicare Enrollment

Delaying enrollment in Medicare Part B or failing to enroll when required can trigger higher premiums and permanent coverage penalties. Even worse, it can cause your PSHB plan to reduce its benefits. The key timeline to remember:

• You become eligible for Medicare at age 65

• You must enroll during your Initial Enrollment Period (3 months before, the month of, and 3 months after your 65th birthday)

• If you miss that window and don’t qualify for a Special Enrollment Period, you must wait until January 1 to March 31 to enroll, with coverage starting July 1

This delay could leave you with months of limited PSHB coverage and no Medicare protection.

2. Type of PSHB Plan Selected

Not all PSHB plans offer the same level of secondary coverage. Before you enroll—or during Open Season each year from November to December—you need to:

• Review how your PSHB plan coordinates with Medicare

• Compare deductibles, coinsurance, and cost-sharing

• Evaluate whether your plan offers extra benefits for Medicare enrollees

Choosing a PSHB plan that does not fully integrate with Medicare could leave you paying more out-of-pocket than necessary.

3. Whether You Stay in the U.S.

Medicare generally doesn’t cover services received outside the United States. If you live abroad or plan extended travel:

• PSHB may become your primary payer by default

• You should check your plan’s international coverage policies

• You may be responsible for 100% of costs if both Medicare and PSHB exclude the service

Don’t assume your benefits follow you without confirming the specifics of your PSHB plan.

What PSHB Still Offers Beyond Medicare

While Medicare covers a wide range of services, PSHB plans often provide value in areas Medicare does not fully address. Examples include:

• Vision and dental benefits, which Original Medicare does not cover

• Hearing aid support in many plans

• Wellness programs, telehealth, and fitness support

These extras can make a significant difference in your quality of care, particularly in retirement. You should carefully compare which PSHB plan provides the right balance of Medicare coordination and value-added services.

Why Reviewing Your PSHB Plan Annually Matters

Your needs evolve—and so do the benefits under Medicare and PSHB. Each fall, you should take time to:

• Review the Annual Notice of Change (ANOC) from your PSHB plan

• Confirm that your provider network still includes your preferred doctors

• Check whether your plan continues to waive or reduce deductibles when Medicare is primary

• Ensure drug formulary changes don’t increase your medication costs

The annual PSHB Open Season from November to December allows you to make adjustments for the following year. Failing to review your plan may lead to higher costs or insufficient coverage.

Make Medicare and PSHB Work Together, Not Against Each Other

The goal is to make Medicare your primary and PSHB your secondary in a way that reduces what you pay and improves what you get. That only happens if you:

• Enroll in both Medicare Part A and B when required

• Choose a PSHB plan that fully coordinates with Medicare

• Understand what your PSHB plan does and doesn’t cover after Medicare becomes primary

Many PSHB enrollees see significant cost savings and more comprehensive coverage by aligning their plans properly—but that doesn’t happen automatically.

Get Help Before You Enroll—or Miss Something Important

Understanding when Medicare becomes your primary insurance is only half the equation. The real value comes from knowing whether your PSHB plan steps up to fill the gaps—and what happens if it doesn’t.

If you’re unsure about:

• Your Medicare enrollment timeline

• Whether you qualify for a PSHB Medicare Part B exemption

• Which PSHB plan offers the best coordination

Then it’s time to speak with a licensed agent listed on this website. They can help you navigate your enrollment, compare your plan options, and ensure you don’t face surprise costs down the line.