Key Takeaways

• Many retirees report high satisfaction with PSHB plans, but the features they like may not benefit you depending on your health status, location, or Medicare enrollment.

• Evaluating your individual needs against plan offerings is essential before assuming PSHB offers a better deal than FEHB did.

Understanding the Shift from FEHB to PSHB

With the launch of the Postal Service Health Benefits (PSHB) Program in January 2025, all Postal retirees and their eligible family members now rely on PSHB plans for their health coverage. This program replaced the long-standing Federal Employees Health Benefits (FEHB) Program specifically for U.S. Postal Service employees and annuitants. While many retirees express positive feedback about this transition, the reality is that preferences vary widely based on personal circumstances.

This article walks you through what PSHB offers, what retirees often like about it, and why you should be cautious before assuming the same benefits apply to your situation.

What Retirees Appreciate About PSHB

There’s no shortage of praise from retirees who’ve already moved to PSHB coverage. The common positives they report include:

1. Integrated Medicare Part B Benefits

PSHB plans in 2025 are designed to work closely with Medicare. If you’re enrolled in Medicare Part B, many PSHB plans reduce or eliminate deductibles and coinsurance. Some even reimburse part of the Medicare Part B premium, which retirees interpret as a significant cost-saving advantage.

2. Streamlined Drug Coverage

Unlike the FEHB system, PSHB integrates Medicare Part D benefits through an Employer Group Waiver Plan (EGWP). This ensures prescription drug coverage aligns with Medicare standards, and the out-of-pocket cost cap of $2,000 in 2025 has made the plans more appealing to retirees with high medication needs.

3. Expanded Nationwide Network Access

Many PSHB plans maintain a broad network of providers across states, often similar to or broader than FEHB. Retirees value being able to see providers when traveling or after relocating without needing to switch plans or deal with out-of-network penalties.

4. Familiar Carriers and Plan Structures

Although PSHB is a new program, many of the participating plans mirror former FEHB options in structure and provider access. This familiarity helps retirees transition smoothly.

5. Competitive Cost Sharing for Medicare-Eligible Members

Retirees who pair PSHB with Medicare Part B generally see lower copayments and coinsurance for routine and specialist care. This cost sharing has been a key selling point for those on fixed incomes.

But These Benefits Might Not Apply to You

Before you lean too heavily on others’ opinions, you need to ask whether those features actually meet your needs. Here’s why:

Your Health Profile May Differ

If you’re relatively healthy and rarely see a doctor, the lowered copays for Medicare users may not translate into meaningful savings for you. You may be better off in a lower-premium plan even if it lacks the bells and whistles retirees rave about.

Medicare Enrollment Status Changes the Equation

Not every annuitant is enrolled in Medicare Part B. If you aren’t—either by choice or because you retired before January 1, 2025 and chose not to enroll—the Medicare coordination benefits that retirees love don’t apply to you. In fact, some plans could cost you more in this scenario due to higher deductibles and coinsurance.

PSHB Plans Favor Medicare Pairing

PSHB plans are priced and structured with the assumption that most annuitants age 65 and older are also enrolled in Medicare Part B. Without that coordination, you’ll carry more of the cost burden. The plan designs shift more responsibility to the member when Medicare doesn’t pick up its share first.

Provider Networks Vary by Location

Even though PSHB plans advertise nationwide coverage, actual provider access can differ by region. Some areas may have fewer in-network providers or hospitals. If you live in a rural or underserved area, your options under PSHB might be narrower than what you had under FEHB.

Copayments and Deductibles Can Still Be Significant

The impression that PSHB copays are lower is only true for certain enrollees—especially those who have Medicare Part B. If you don’t, be prepared for higher cost-sharing. For example:

• In-network deductibles for Self Only coverage range from $350 to $1,500.

• Specialist copays can range from $30 to $60 per visit.

• Urgent care and emergency room services may involve copays of $50 to $150.

Prescription Drug Coverage Isn’t Automatic Without Medicare

If you are not Medicare-eligible, you won’t receive the enhanced drug coverage under the EGWP. Instead, you’ll be under the plan’s standard drug benefits, which may have higher out-of-pocket costs and fewer protections.

Part B Reimbursement Doesn’t Apply Universally

Even though some PSHB plans offer a partial reimbursement of the Medicare Part B premium, that benefit:

• Applies only to Medicare-eligible annuitants enrolled in both PSHB and Part B.

• Is not offered by every plan.

• May be capped at a fixed monthly amount.

If you’re not enrolled in Part B, or choose a plan that doesn’t offer this reimbursement, you won’t see this advantage at all.

Your Personal Timeline Matters

One critical variable is the timing of your retirement and Medicare enrollment. If you retired on or before January 1, 2025 and chose not to enroll in Medicare Part B, you’re exempt from the Part B enrollment requirement but may face limited benefits under PSHB.

If you retire in 2025 or later and are Medicare-eligible, you must enroll in Part B to maintain PSHB coverage. Failing to do so could lead to termination of your PSHB plan.

This makes understanding your specific retirement and Medicare timeline crucial. The same PSHB plan could look very different depending on when you retired and your age.

Reviewing the Annual Notice of Change

Many retirees assume that plan benefits remain stable from year to year. However, every fall you receive an Annual Notice of Change (ANOC) that outlines key plan updates for the upcoming year. These may include:

• Premium increases

• Changes to deductibles or copays

• Modifications to drug formularies or pharmacy networks

Don’t skip this. Comparing the ANOC to your healthcare needs is essential to ensure your plan still makes sense for you.

You Can—and Should—Reevaluate Annually

Open Season runs from November to December each year. During this time, you can switch PSHB plans based on the upcoming year’s benefits. If your circumstances change—like new medications, a move, or enrolling in Medicare—you may benefit from reassessing your plan choice.

Here’s what to consider each year:

• Have your healthcare needs changed?

• Has your income changed, making cost-sharing less or more tolerable?

• Did your plan change any major benefits?

• Are you now eligible for or enrolled in Medicare?

A different PSHB plan may suit you better if the answers to any of these questions are yes.

Speak With a Licensed Agent Before You Decide

While PSHB is designed to be user-friendly, the details aren’t always easy to spot. Whether it’s understanding how Medicare affects your PSHB benefits or which plan works best for your location and needs, you don’t have to go it alone.

You can speak with a licensed agent listed on this website to get:

• Plan comparisons tailored to your Medicare status

• Guidance on potential out-of-pocket costs

• Help with enrollment and benefit coordination

It’s Not About What Everyone Else Thinks—It’s About What Works for You

What other retirees like about PSHB might not matter if your personal situation doesn’t align with those features. The most satisfied enrollees are those who actively compare their options and make choices based on their unique combination of health status, location, and Medicare enrollment.

Don’t assume one-size-fits-all. Take the time to evaluate PSHB plan documents and benefits, and reach out to a licensed agent listed on this website if you need help making sense of it all.