Key Takeaways

• Once you enroll in Medicare Parts A and B, your PSHB plan shifts into a secondary payer role, but it continues to offer critical benefits that fill in Medicare’s gaps.

• Some PSHB plans offer enhanced benefits for Medicare enrollees, such as waived deductibles, reduced coinsurance, or prescription drug integration under Medicare Part D.

What Changes When You Enroll in Medicare Parts A and B

When you become eligible for Medicare, typically at age 65, and you choose to enroll in both Part A (Hospital Insurance) and Part B (Medical Insurance), your PSHB plan undergoes an important shift. It does not cancel or duplicate coverage. Instead, it integrates with Medicare in a structured way.

Under the current rules in 2025, Medicare becomes your primary payer, while your PSHB plan becomes secondary. This means:

• Medicare pays first on eligible services

• Your PSHB plan covers some or all of the remaining costs

This coordination is designed to minimize your out-of-pocket expenses and provide continued access to a wide range of services.

Medicare and PSHB: Who Pays What?

Once enrolled in Medicare:

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

• Part B covers outpatient services, doctor visits, lab tests, preventive screenings, and durable medical equipment.

Your PSHB plan then fills the gaps, including:

• Covering Part A and B deductibles and coinsurance

• Additional outpatient coverage

• Emergency care while traveling internationally

• Broader prescription drug coverage (if integrated with Part D)

In effect, the two plans work together, with Medicare taking the lead role and PSHB ensuring you’re not stuck with large residual bills.

What You Still Get from PSHB After Signing Up for Medicare

Many enrollees wonder whether their PSHB plan becomes redundant after enrolling in Medicare. The answer is no. PSHB plans continue to offer meaningful value:

• Lower cost-sharing: Many PSHB plans waive their own deductibles and coinsurance for Medicare-enrolled members.

• Prescription drug coverage: You remain enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) through your PSHB carrier, which includes additional protections.

• Catastrophic protection: Even if Medicare covers a significant portion of a claim, the PSHB plan provides coverage for expenses not picked up by Medicare.

• Global coverage: Medicare has limited coverage outside the U.S., but many PSHB plans include overseas emergency care.

This layered protection is especially important if you frequently use specialist services or prescription medications.

Do You Have to Keep PSHB After Enrolling in Medicare?

There is no mandate to keep PSHB once you enroll in Medicare Parts A and B, but discontinuing it comes with major trade-offs:

• You may lose access to coverage for services not covered by Medicare.

• You may have to pass underwriting requirements to get new supplemental coverage in the future.

• You risk higher out-of-pocket costs, especially if you need brand-name drugs, travel internationally, or require long-term outpatient care.

Many annuitants choose to retain both Medicare and PSHB to preserve broad coverage and financial predictability.

What About Prescription Drug Coverage?

As of 2025, if you’re enrolled in both PSHB and Medicare, your drug coverage is provided through a Medicare Part D EGWP plan administered by your PSHB carrier. This comes with several benefits:

• No need to enroll separately in Part D

• $2,000 out-of-pocket cap for prescription drugs, introduced this year

• $35 insulin copay limit, a continuation from prior years

• Access to a national network of pharmacies

If you opt out of this drug coverage, you lose drug benefits under your PSHB plan altogether and can only reenroll during a future qualifying life event.

What Happens If You Don’t Enroll in Part B?

Some Postal retirees may wonder whether they must enroll in Medicare Part B. As of 2025, the answer is yes—in most cases.

To keep PSHB coverage in retirement, you must enroll in Medicare Part B when you’re eligible unless you qualify for one of the few exemptions, such as:

• You retired on or before January 1, 2025 and aren’t already enrolled in Part B

• You are a current employee who is 64 or older as of January 1, 2025

• You live overseas

• You receive VA or Indian Health Services benefits

If you don’t meet any of these exemptions and fail to enroll in Part B when required, you risk losing PSHB coverage for yourself and your covered family members.

Does Medicare Enrollment Impact PSHB Premiums?

While your Medicare enrollment doesn’t eliminate PSHB premiums, many plans offer additional cost-sharing reductions or premium credits:

• Some plans reduce deductibles to zero

• Others offer reimbursement for a portion of your Medicare Part B premium

• You may see lower copayments or coinsurance

However, the monthly PSHB premium itself generally stays the same. You’ll continue to pay that premium in addition to your Medicare Part B premium, which is $185 in 2025.

The key is that these added costs often come with added value: fewer bills, more coverage, and peace of mind.

How Coordination of Benefits Works Between PSHB and Medicare

Coordination of Benefits (COB) is the process that ensures both Medicare and your PSHB plan pay their respective shares.

Here’s how it works:

1. You visit a provider who accepts Medicare.

2. The provider bills Medicare first.

3. Medicare pays its approved amount.

4. The remainder is automatically sent to your PSHB plan.

5. Your PSHB plan pays what it owes based on your plan rules.

This coordination is seamless when:

• You use in-network providers for your PSHB plan

• The provider accepts Medicare assignment

• You keep your enrollment information updated with both programs

For services that Medicare doesn’t cover at all, like routine vision or dental care, your PSHB plan may still provide coverage directly.

What If You’re Still Working When You Become Eligible for Medicare?

If you’re a Postal employee who continues working past 65, you have more flexibility. In that case:

• You can delay Medicare Part B without penalty

• Your PSHB plan remains your primary coverage

• Medicare acts as secondary payer, or not at all if you haven’t enrolled yet

When you retire, you’ll get an 8-month Special Enrollment Period to sign up for Medicare Part B without a late penalty.

But once you do retire, Medicare becomes primary, and you must enroll in Part B to keep your PSHB benefits unless exempt.

How to Avoid Coverage Gaps During the Transition

Timing matters. To ensure continuous coverage when transitioning to Medicare:

• Enroll in Medicare during your Initial Enrollment Period, which begins 3 months before your 65th birthday, includes your birthday month, and ends 3 months after.

• Coordinate your retirement date and Medicare enrollment date.

• Confirm your enrollment through Medicare.gov and review PSHB plan integration details.

Missing these steps can lead to delays in coverage or denied claims, particularly if PSHB expects Medicare to pay first but you haven’t enrolled.

Annual Open Season Still Matters After Enrolling in Medicare

Even after you have Medicare, the PSHB Open Season (every November to December) remains important:

• Review any changes to plan benefits and costs

• Compare how each PSHB plan integrates with Medicare

• Evaluate which plan offers the best cost-sharing options for your specific needs

This ensures you’re not overpaying or under-covered.

Why Keeping Both Medicare and PSHB Is Often Worth It

For many retirees, keeping both programs active provides:

• Robust protection against medical expenses

• Freedom to choose healthcare providers

• Travel coverage beyond Medicare’s limitations

• Prescription drug security with capped expenses

It’s the combination of broad coverage, financial protection, and flexibility that makes the Medicare+PSHB pairing a strong choice in retirement.

The Key to Making It Work Smoothly

Your Medicare and PSHB benefits are only as strong as your understanding of how they interact. Mistakes like delaying Part B enrollment or failing to review plan changes during Open Season can lead to unnecessary costs or coverage lapses.

If you’re unsure about whether your current setup is optimized, speak to a licensed agent listed on this website. They can help you evaluate your Medicare enrollment, explain plan integration, and identify the most cost-effective PSHB plan for your situation.