Key Takeaways

• Ignoring Medicare when eligible can lead to higher out-of-pocket costs and reduced coordination of benefits under your PSHB plan.

• In 2025, certain PSHB enrollees must enroll in Medicare Part B to retain full benefits, with consequences for those who don’t.

Medicare Eligibility Changes the Rules

At age 65, your relationship with your PSHB plan shifts. You may still rely on it for your primary health coverage, but Medicare eligibility changes the way that coverage works. Ignoring Medicare when you’re eligible doesn’t mean you simply continue with PSHB as usual. It means you could face unexpected costs, coverage limitations, or even lose access to certain benefits altogether.

Starting in 2025, the Postal Service Health Benefits (PSHB) Program requires most Medicare-eligible annuitants and their family members to enroll in Medicare Part B to keep full PSHB coverage. If you’re approaching age 65 and brushing off Medicare, now is the time to reconsider.

What Happens When You Turn 65

Once you hit age 65, you enter your Initial Enrollment Period (IEP) for Medicare. This window lasts for 7 months: beginning 3 months before your birthday month, continuing through that month, and lasting 3 months afterward. If you don’t enroll in Medicare Part B during this window, and you later decide to enroll, you may face lifelong late enrollment penalties unless you qualify for a Special Enrollment Period.

Under the new PSHB rules, here’s what changes once you become eligible for Medicare:

• Your PSHB plan assumes you will be enrolled in Medicare Part B.

• If you don’t enroll, your PSHB plan may not provide the same level of benefits it would if Medicare were your primary payer.

• Prescription drug coverage is also linked to Medicare eligibility, as Medicare Part D integration through Employer Group Waiver Plans (EGWP) now applies to Medicare-eligible annuitants.

You Might Be Required to Enroll

Not all PSHB enrollees are impacted in the same way. The requirement to enroll in Medicare Part B in 2025 applies to most but not all. Here’s a breakdown:

Mandatory Enrollment Applies If:

• You are a Medicare-eligible Postal Service annuitant or family member.

• You retired after January 1, 2025.

• You are Medicare-eligible due to age or disability.

Exemptions Include:

• You retired on or before January 1, 2025.

• You were age 64 or older as of January 1, 2025.

• You live abroad in an area without Medicare coverage.

• You are eligible for healthcare through the VA or Indian Health Services.

If you fall under the mandatory category and ignore Medicare, your PSHB coverage will not be considered complete. You may face significant cost-sharing or denial of coverage for services Medicare would otherwise have paid for.

Cost Implications of Skipping Medicare

Ignoring Medicare Part B isn’t just a bureaucratic misstep. It’s a financial one. Here’s how the numbers can add up:

• Higher cost-sharing: Without Medicare as your primary coverage, your PSHB plan becomes the sole payer. Many PSHB plans are structured to pay secondary to Medicare, so you’ll face higher deductibles, copays, and coinsurance.

• Missed coordination benefits: When Medicare is primary and PSHB is secondary, your out-of-pocket costs can drop significantly. Skipping Medicare eliminates this benefit.

• Late enrollment penalty: If you delay enrolling in Part B and aren’t exempt, you’ll face a 10% increase in your premium for every 12-month period you were eligible but unenrolled.

In 2025, the standard monthly premium for Medicare Part B is $185. That amount can rise with penalties and income-based adjustments, which further increases your costs.

Your PSHB Plan Doesn’t Work Alone Anymore

PSHB plans are now built to work in tandem with Medicare. That means:

• Reduced premiums or reimbursements may be offered if you enroll in Part B.

• Waived deductibles or lower copayments may be available only if Medicare is your primary payer.

• Integrated prescription drug coverage through a Part D EGWP plan kicks in automatically if you’re enrolled in Medicare.

If you skip Medicare, your PSHB plan may still cover you, but not in the same way. You may lose access to enhanced benefits or face unexpected costs during inpatient hospital stays, specialist visits, or high-cost diagnostics.

Prescription Drug Coverage May Be Affected

In 2025, PSHB plans automatically include a Medicare Part D Employer Group Waiver Plan (EGWP) for Medicare-eligible annuitants and their eligible family members. This integration:

• Caps annual out-of-pocket costs for drugs at $2,000.

• Limits monthly insulin costs to $35.

• Expands access to a nationwide pharmacy network.

However, these benefits only apply if you’re enrolled in Medicare Part B. If you’re Medicare-eligible but not enrolled, you will lose access to these Part D benefits under PSHB.

Worse, opting out of the drug coverage means you can’t re-enroll later unless you experience a qualifying life event. That makes ignoring Medicare not only costly but also irreversible in some cases.

You May Not Receive the Support You Expect

Many PSHB plans include customer service features that help coordinate Medicare benefits, file claims, and explain coverage overlaps. But if you haven’t enrolled in Medicare, you may find limited support for claims that would otherwise be streamlined.

Even if you have strong PSHB coverage, the customer service team may not help with appeals or issues related to Medicare coordination because you didn’t elect to enroll. That leaves you managing unexpected denials or bills on your own.

You Could Lose Access to Enhanced Provider Networks

Some PSHB plans rely on Medicare to expand your access to healthcare providers. Medicare acts as a national network, removing the need to stay within a plan’s designated region.

If you ignore Medicare and continue using only PSHB, you could:

• Face higher out-of-network costs.

• Be denied care outside your plan’s service area.

• Need pre-authorizations for services Medicare would otherwise approve automatically.

This is especially important if you travel frequently or live in a different state part of the year. Medicare ensures your coverage follows you—your PSHB plan alone might not.

What About Tricare or Other Federal Programs?

If you’re also eligible for Tricare or another federal health benefit, those programs usually also require Medicare enrollment to maintain full eligibility. Skipping Medicare could create a ripple effect that impacts all your federal health benefits.

You may think you can rely on your PSHB coverage instead, but overlapping systems often coordinate through Medicare. Ignoring it may disqualify you from those other benefits entirely.

The Penalty Doesn’t Just Go Away

If you don’t enroll in Medicare Part B during your IEP and later change your mind, you can enroll during the General Enrollment Period (January 1 through March 31), but coverage won’t begin until July. During that gap, you’re without the full Medicare-PSHB pairing, and you’ll also be hit with a penalty unless you qualify for an exception.

The penalty is cumulative and lifelong:

• A 10% penalty for each 12-month period you delayed.

• Added to your monthly Part B premium permanently.

This can make future enrollment significantly more expensive, which is why ignoring Medicare initially becomes a long-term financial burden.

What You Should Do Before Turning 65

If you’re still working or newly retired and approaching 65, here’s what you should be doing now:

• Verify your Medicare eligibility. Confirm your eligibility for Medicare Part A and B by logging into your Social Security account or calling SSA.

• Understand your PSHB plan’s Medicare coordination. Contact your plan or review your plan brochure to see how Medicare changes your benefits.

• Prepare to enroll in Part B. If you’re required to enroll, make sure you do so during your Initial Enrollment Period.

• Explore your drug coverage options. Know how the EGWP drug plan works, and how opting out could permanently affect you.

• Talk to a licensed agent. If you’re unsure about timing, coordination, or eligibility, seek guidance from a professional.

Avoiding Medicare Isn’t a Smart Strategy Anymore

The reality in 2025 is that PSHB plans are not designed to function at full strength without Medicare once you’re eligible. If you choose to ignore Medicare, you’re also walking away from cost savings, reduced risk, and stronger nationwide access to care.

Take the time to understand what you gain by enrolling in Medicare and what you stand to lose if you don’t. Delaying might seem easier now, but the consequences are long-lasting and costly.

Talk to Someone Who Can Help

Medicare affects how your PSHB coverage works the moment you become eligible. If you skip enrollment or miss your window, your plan may not cover you the way you expect. Higher out-of-pocket costs, limited networks, and penalties are all avoidable with the right strategy.

To get the most from your PSHB plan after age 65, talk to a licensed agent listed on this website. They can help you review your options, confirm your eligibility, and avoid mistakes that could cost you more later.