Key Takeaways

• Medicare Part B covers outpatient care, but it does not cover everything. You are still responsible for deductibles, coinsurance, and excess charges.

• Combining Medicare Part B with your Postal Service Health Benefits (PSHB) plan can significantly reduce out-of-pocket costs, but if you rely on Part B alone, you may face high bills for common outpatient services.

Understanding What Medicare Part B Covers

Medicare Part B is essential for managing outpatient services. It includes coverage for:

• Physician visits

• Diagnostic tests like MRIs, X-rays, and lab work

• Outpatient surgeries

• Durable medical equipment (DME)

• Physical therapy

• Mental health services

• Preventive services such as screenings and vaccines

But while this sounds like a lot, Medicare Part B is not designed to be a complete solution. As a PSHB enrollee, it is important to understand the limitations when relying on Part B alone.

The 2025 Costs Associated with Medicare Part B

In 2025, Medicare Part B comes with the following general costs:

• Monthly Premium: $185 per month

• Annual Deductible: $257

• Coinsurance: You typically pay 20% of the Medicare-approved amount for most services after you meet your deductible

• Excess Charges: Up to 15% more than the Medicare-approved amount if your provider does not accept Medicare assignment

These costs can add up quickly, especially if you receive care frequently or from providers who bill above Medicare rates.

Outpatient Services That Trigger the Highest Bills

When you rely only on Part B, the following outpatient services tend to result in the most significant out-of-pocket expenses:

1. Outpatient Surgery

These procedures are often performed in ambulatory surgical centers or hospital outpatient departments. Medicare covers 80% of the approved cost, leaving you with 20% coinsurance, plus any excess charges if the facility or surgeon does not accept assignment.

A routine outpatient procedure can lead to bills of hundreds or even thousands of dollars, depending on the complexity and setting.

2. Advanced Imaging and Diagnostics

CT scans, MRIs, PET scans, and nuclear medicine tests are often necessary but expensive. After the deductible, you pay 20% of the cost. If the provider charges above Medicare’s approved amount, the gap widens.

3. Durable Medical Equipment (DME)

Items like wheelchairs, walkers, or CPAP machines fall under DME. You’re responsible for 20% of the cost, and if the supplier is not Medicare-approved or does not accept assignment, you may pay significantly more.

4. Chemotherapy and Infusion Therapy

Part B covers many cancer treatments administered in outpatient settings. These treatments are billed at high rates. Even a 20% share can be financially draining without additional insurance.

5. Emergency Room (ER) Visits That Don’t Result in Admission

Part B handles ER care unless you are formally admitted to the hospital. If you are treated and released, you are billed as an outpatient, including separate charges for physician services, diagnostics, and facility fees.

6. Mental Health Outpatient Services

Outpatient therapy or psychiatric care is covered by Part B, but the 20% coinsurance applies. Without PSHB or Medigap coverage, consistent therapy becomes expensive over time.

What Happens if You Only Have Part B and No PSHB Support

If you forgo enrolling in a PSHB plan or drop your existing coverage and only retain Medicare Part B, you become responsible for a much higher share of your healthcare costs. Here’s what this typically means:

• No cap on out-of-pocket costs: Medicare Part B does not place an annual out-of-pocket maximum on what you can spend.

• High exposure to unpredictable costs: A serious illness or accident could result in thousands of dollars in coinsurance and fees.

• No prescription drug coverage: Part B doesn’t cover most prescription medications. Unless you separately enroll in Part D or a PSHB plan, you’ll be paying full price at the pharmacy.

• Limited protection from excess charges: Providers who don’t accept Medicare assignment can bill you more than the standard rates, and you’ll have no supplemental plan to absorb those costs.

PSHB and Medicare Part B: How They Work Together

When you are enrolled in both Medicare Part B and a PSHB plan in 2025, the two programs coordinate to reduce what you pay.

Here’s how it works:

• Medicare pays first (primary payer) for outpatient services.

• Your PSHB plan picks up some or all of the remaining 20% coinsurance, depending on your specific plan.

• Some PSHB plans even waive deductibles and out-of-pocket costs entirely for Medicare enrollees.

This coordination gives you better protection against large medical bills, ensures more predictable costs, and extends the value of your health coverage.

The Medicare Enrollment Requirement for PSHB in 2025

As of 2025, many Medicare-eligible annuitants and family members must be enrolled in Medicare Part B to maintain their PSHB coverage.

Exemptions apply only if:

• You retired on or before January 1, 2025

• You were 64 or older on January 1, 2025

• You live overseas

• You qualify for VA or Indian Health Services

Failing to enroll in Part B when required can result in loss of PSHB coverage and full responsibility for all Medicare cost-sharing.

How Prescription Drugs Fit Into This Equation

Medicare Part B generally doesn’t cover medications you take at home. If you only have Part B, you won’t have insurance for your regular prescriptions unless you:

• Enroll in a separate Medicare Part D plan, or

• Retain your PSHB plan, which includes integrated prescription drug benefits through a Medicare Part D EGWP (Employer Group Waiver Plan)

PSHB plans with Medicare integration in 2025 also include benefits like:

• A $35 monthly insulin cap

• $2,000 annual out-of-pocket maximum on drug spending

• Expanded pharmacy networks

By contrast, if you only have Part B, you risk paying full price for everyday medications.

A Breakdown of the Financial Risk in 2025

Let’s consider a common scenario: an outpatient surgery with a Medicare-approved cost of $6,000.

If you only have Part B:

• You first pay the $257 deductible

• Then you owe 20% of the remaining $5,743 ($1,148.60)

• If your provider bills a 10% excess charge, that adds another $600

• Your total out-of-pocket: about $2,005

If you have a PSHB plan that coordinates with Medicare:

• The deductible is waived or absorbed

• The 20% coinsurance may be partially or fully covered

• Excess charges may be limited or eliminated if your plan has network requirements

• Your out-of-pocket could be $0 or significantly lower

Timeline to Coordinate PSHB and Medicare

Here’s when to take action if you’re approaching age 65 or becoming Medicare-eligible:

• Three months before your 65th birthday: Begin Medicare Part B enrollment.

• Within your Initial Enrollment Period (IEP): Enroll in Medicare to avoid late penalties.

• By Open Season (November–December): Evaluate PSHB plans that work with Medicare and make any changes.

You’ll receive automatic enrollment into a PSHB plan if you don’t actively choose one during Open Season, but reviewing options yourself ensures better coverage alignment.

What to Do If You Missed Your Medicare Enrollment Window

If you missed your Initial Enrollment Period and are now required to have Medicare Part B under PSHB rules, you must wait for the General Enrollment Period (January 1 to March 31) to sign up, with coverage beginning July 1.

In the meantime, you may:

• Face gaps in your outpatient coverage

• Lose PSHB eligibility depending on your situation

• Be subject to late enrollment penalties, increasing your Part B premium

This makes timely enrollment crucial.

Protecting Yourself From Outpatient Surprises

As you’ve seen, relying solely on Medicare Part B exposes you to high and often unpredictable costs. While Medicare covers 80% of outpatient expenses in theory, the remaining 20%—combined with deductibles, excess charges, and no drug coverage—can put real pressure on your retirement income.

Maintaining your PSHB plan alongside Part B adds a safety net. You gain:

• Coverage for most or all coinsurance and copays

• Better cost predictability

• Integrated drug benefits with annual caps

• Access to broader provider networks

This dual coverage model is especially valuable in 2025, when Medicare rules and PSHB requirements are tightly aligned.

Make Your Next Step a Smart One

If you’re currently enrolled in Medicare Part B or becoming eligible soon, now is the time to review your Postal Service Health Benefits options. Relying on Part B alone may leave you responsible for thousands in uncovered outpatient costs.

To make sure your coverage works the way you expect it to, speak with a licensed agent listed on this website. They can help you:

• Identify PSHB plans that complement Medicare

• Understand how cost-sharing works in real-life scenarios

• Ensure compliance with enrollment deadlines

You’ve worked hard for your benefits. Now make sure you’re using them to their full potential.