Key Takeaways

• Medicare alone doesn’t cover everything—and even with Part A, Part B, and Part D, you may still face considerable out-of-pocket costs.

• As a Postal Service Health Benefits (PSHB) enrollee, pairing your PSHB plan with Medicare can reduce the risk of surprise bills, but only if you understand what Medicare leaves out.

The Illusion of Full Coverage: What Medicare Really Offers

Medicare, while foundational for millions of retirees, is not a catch-all solution. It is important to understand what it does and does not cover, especially if you are a Postal Service retiree or family member relying on both Medicare and PSHB.

In 2025, the Medicare program includes:

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

• Part B: Medical insurance that covers certain doctors’ services, outpatient care, medical supplies, and preventive services.

• Part D: Prescription drug coverage through standalone plans or as part of an integrated PSHB/Part D EGWP plan.

However, each part comes with deductibles, coinsurance, and coverage limits. For instance:

• The Part A deductible is $1,676 per benefit period in 2025.

• The Part B annual deductible is $257, with a monthly premium of $185.

• Part D has a maximum deductible of $590, followed by cost-sharing until your total out-of-pocket costs reach $2,000.

The Problem With Relying on Medicare Alone

Medicare doesn’t cover some essential services you may assume are included. That’s where the surprise costs begin to emerge. Among the most significant gaps:

• Dental, vision, and hearing services: Routine services are generally not covered by Medicare.

• Long-term custodial care: Medicare only pays for short-term skilled care; it won’t cover extended nursing home stays.

• Overseas healthcare: Medicare does not typically cover care received outside the U.S.

• Emergency services with high coinsurance: While Medicare Part B covers 80% of approved outpatient services after the deductible, the remaining 20% can be costly.

When you depend on Medicare without another plan like PSHB working alongside it, you risk covering these gaps out-of-pocket.

How PSHB Interacts With Medicare

Under the PSHB Program in 2025, Postal Service retirees who are eligible for Medicare are encouraged—and in many cases required—to enroll in Medicare Part B to maintain their PSHB coverage. This coordination is designed to protect you from excessive costs.

Here’s how the coordination helps:

• Primary and secondary payer rules: Medicare typically pays first, and your PSHB plan covers secondary costs like coinsurance and copayments.

• Reduced cost-sharing: Many PSHB plans reduce or waive deductibles and copays when Medicare is also in place.

• Part D integration: Your PSHB plan includes a Medicare Part D Employer Group Waiver Plan (EGWP) with a $2,000 out-of-pocket cap, removing the previous coverage gap.

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

In 2025, failing to enroll in Medicare Part B when required can limit your PSHB benefits. For Medicare-eligible annuitants and family members, the consequences include:

• Loss of coordination benefits: You will be responsible for the 20% that Medicare Part B would have covered, and your PSHB plan may not step in.

• No cost-sharing reductions: You may have to meet higher deductibles and pay full copays.

• No access to integrated Part D EGWP benefits: This affects drug coverage, out-of-pocket caps, and network access.

Exemptions apply if you retired on or before January 1, 2025, or if you’re otherwise exempt (e.g., due to VA or Indian Health Services eligibility, or residence abroad).

Surprise Medical Bills Are Still Possible

Even with both Medicare and PSHB, some circumstances could still leave you vulnerable to unexpected costs:

• Out-of-network providers: If you see a doctor who doesn’t accept Medicare assignment or is outside your PSHB network, you could face higher charges.

• Non-covered services: Services not covered by either plan, like cosmetic procedures or most dental care, are your responsibility.

• Skilled nursing facility care beyond Medicare limits: Once you exhaust Medicare’s 100-day skilled nursing benefit, your PSHB plan may offer limited assistance, if any.

Understanding these limits is essential to avoid large bills later.

Know Your Cost Responsibilities

Even when both Medicare and PSHB are working together, you still need to budget for:

• Premiums: You must pay Medicare Part B premiums, as well as your share of PSHB premiums.

• Deductibles: Depending on your plan, PSHB may waive or reduce these, but not always entirely.

• Copayments and coinsurance: These vary depending on your PSHB plan structure, and services used.

Being informed about these costs can help you plan for healthcare expenses in retirement.

When Medicare and PSHB Work Best Together

The PSHB-Medicare combination is strongest when:

• You are enrolled in Medicare Parts A and B.

• You choose a PSHB plan that offers reduced cost-sharing for Medicare enrollees.

• You understand your plan’s formulary and provider network.

• You use providers who accept both Medicare and your PSHB plan.

This setup reduces your exposure to surprise bills and can lower your total out-of-pocket costs.

The 2025 Landscape: What’s New?

2025 introduces several important updates that affect how Medicare and PSHB interact:

• Medicare Part D now includes a hard $2,000 out-of-pocket cap for drug costs.

• PSHB enrollment is mandatory for eligible Postal Service retirees unless you qualify for an exemption.

• Medicare Part B enrollment is required for most Medicare-eligible PSHB participants to maintain access to full benefits.

• Mid-year notifications are being sent to Medicare Advantage users listing unused supplemental benefits to encourage better plan utilization.

These changes make coordination even more important.

Avoiding Pitfalls: What You Should Watch Out For

To avoid unnecessary costs and keep your healthcare secure in retirement, be mindful of the following:

• Missing the Part B enrollment window: If you fail to enroll on time, late penalties may apply for life.

• Assuming PSHB covers everything: Not all PSHB plans are the same. Review cost-sharing structures closely.

• Ignoring the Annual Notice of Change (ANOC): Each year, your PSHB plan’s costs and benefits may shift. These notices outline what’s changing and should inform your decision-making.

• Forgetting to use in-network providers: Going out of network, especially for specialists or procedures, may significantly increase your bill.

Staying informed can protect your finances.

Planning Tips for a Secure Healthcare Future

If you want to avoid surprise bills and make the most of your PSHB and Medicare coverage, consider these practical steps:

• Track enrollment timelines: Keep an eye on November to December for the PSHB Open Season and October to December for Medicare Open Enrollment.

• Compare plan options annually: Just because a plan worked last year doesn’t mean it’s still the best for your needs.

• Understand how your PSHB plan coordinates with Medicare: Ask if cost-sharing is reduced and how drug coverage integrates.

• Seek help from a licensed agent listed on this website: Agents can help clarify rules, compare plan features, and ensure compliance with requirements.

What This Means for You in 2025 and Beyond

Medicare provides essential healthcare support, but it was never designed to cover everything. The PSHB program helps fill in the gaps—but only if you know how to take full advantage of it.

Being enrolled in the right combination of Medicare Parts A, B, and your PSHB plan is just the beginning. You must also understand the costs, coverage limitations, provider networks, and enrollment deadlines.

Get ahead of surprise bills by being proactive. If you’re unsure about any part of your current or future coverage, talk to a licensed agent listed on this website for personalized, professional support.