Key Takeaways

  • In 2025, Medicare Part D plans include new protections that can significantly reduce your out-of-pocket prescription drug costs—but only if you stay enrolled and understand the changes.

  • If you’re a Postal Service Health Benefits (PSHB) enrollee and eligible for Medicare, your drug coverage is now integrated with Medicare Part D. This brings both opportunities for savings and new rules you need to follow.

What Makes 2025 Different for Part D

This year marks a major shift in how Medicare Part D works. For the first time, there’s a firm annual cap on what you pay out of pocket for prescription drugs. In the past, drug costs could pile up rapidly once you hit the coverage gap or entered catastrophic coverage. That system has changed.

As a PSHB enrollee with Medicare, your drug benefits in 2025 are delivered through an Employer Group Waiver Plan (EGWP), which is linked directly to Medicare Part D. These changes affect you whether you’re already enrolled in Medicare or are just becoming eligible this year.

New Annual Out-of-Pocket Maximum

The biggest change in 2025 is the introduction of a $2,000 out-of-pocket cap on prescription drug costs. This means:

  • Once you pay $2,000 for covered prescriptions, your plan covers 100% of the cost for the rest of the year.

  • This limit includes your deductible, copayments, and coinsurance.

  • There is no more donut hole or catastrophic phase—the plan becomes fully responsible after you hit the cap.

This is a major improvement for anyone who takes high-cost medications. It offers predictability and helps protect your budget.

Prescription Payment Plan Option

Also new in 2025: If you don’t want to pay large pharmacy bills up front, you can opt into the Medicare Prescription Payment Plan. This allows you to:

  • Spread your out-of-pocket drug costs over the course of the calendar year.

  • Make monthly payments instead of one-time large expenses.

  • Avoid delaying or skipping medications due to immediate costs.

Enrollment in this payment plan must occur annually. If you’re enrolled in a PSHB plan with integrated Part D, the option is likely offered automatically, but you’ll still need to affirm your choice to participate.

How These Changes Affect PSHB Enrollees

For PSHB participants who are Medicare-eligible, your prescription drug coverage is now automatically coordinated with Medicare Part D through your PSHB plan’s EGWP. That means you’re getting:

  • Access to the same standard protections under Medicare Part D.

  • Integrated coverage that works with Medicare Part A and Part B.

  • No need to buy a separate Part D plan—your PSHB plan includes it.

This integration does not require any action from you unless you decide to opt out of the Medicare drug plan—though doing so can leave you without prescription drug coverage through PSHB and may limit your ability to re-enroll later.

Coordination of Benefits

If you have other coverage in addition to PSHB and Medicare, your plans will coordinate. For example:

  • Medicare pays first.

  • Your PSHB plan as the secondary payer may cover remaining costs.

  • If you are enrolled in the payment plan, your monthly costs will reflect this coordination.

Be sure to keep all plans informed of your current coverage to avoid billing confusion.

Monthly Costs May Still Add Up Before the Cap

Even with the $2,000 cap, you could still face notable expenses earlier in the year. Here’s why:

  • The cap only applies to out-of-pocket costs—not total drug costs.

  • You still need to pay a deductible (up to $590 in 2025) and coinsurance until you reach the cap.

  • If you fill expensive prescriptions in January or February, you could reach the cap quickly, resulting in large early-year costs unless you opt for the payment plan.

It’s important to budget accordingly or enroll in the monthly payment program to even out these costs.

What If You Skip Part B?

Some Postal retirees mistakenly think they can skip Medicare Part B and still retain full drug coverage under PSHB. But in 2025, this decision can have major consequences:

  • PSHB plans that integrate with Medicare require Part B enrollment to keep full access to drug benefits.

  • If you do not have Part B and opt out of Part D, you may lose drug coverage altogether.

  • Re-enrollment later is not guaranteed and may only occur during limited periods.

If you’re nearing 65 or have recently become Medicare-eligible, confirm that you’re enrolled in both Part B and your PSHB-integrated Part D plan to keep your coverage stable.

Who Is Exempt from These Requirements?

Some annuitants and family members are not required to enroll in Medicare Part B to keep their PSHB coverage. These include:

  • Retirees who retired on or before January 1, 2025

  • USPS employees who were 64 or older as of January 1, 2025

  • Individuals living abroad

  • Those enrolled in Indian Health Services or VA healthcare

Even if you are exempt, enrolling in Part B can help reduce your drug and healthcare costs due to the way benefits are coordinated.

Why Staying Enrolled Matters

The drug coverage under PSHB is now closely linked with Medicare. If you disenroll from Medicare Part D through your PSHB plan:

  • You will lose prescription drug benefits under PSHB.

  • You may be unable to rejoin the drug plan until a future Open Season or a qualifying life event occurs.

  • You’ll face higher costs if you need to purchase medications through other means.

Unless you have credible drug coverage from another source, it is risky to opt out of the integrated Medicare Part D plan through PSHB.

Watch for Mid-Year Updates

Beginning in 2025, Medicare Advantage and Part D plans will issue a Mid-Year Enrollee Notification of Unused Supplemental Benefits. Even though not all PSHB-integrated plans offer supplemental benefits, this notice may help you:

  • Identify benefits you haven’t used (like OTC allowances or transportation help)

  • Plan to use them before they expire

  • Make better choices in the next Open Season

Keep an eye on your mail and be sure to read anything from your PSHB plan or Medicare to stay informed.

Key Timelines to Know

To make sure you’re covered and protected in 2025:

  • Medicare Part B enrollment is required when you become eligible, unless you qualify for an exemption.

  • Open Season for PSHB plans typically runs from November to December each year.

  • The Prescription Payment Plan enrollment must happen when you become eligible or during specific Medicare enrollment periods.

  • If you become newly eligible for Medicare mid-year, you’ll have a Special Enrollment Period to make necessary changes.

These timelines are critical for maintaining your benefits and avoiding unnecessary out-of-pocket costs.

You Still Need to Review Your PSHB Plan Each Year

Even with these 2025 improvements, not all PSHB plans work the same way. That’s why you should:

  • Review the Annual Notice of Change mailed to you every fall

  • Compare deductibles, coinsurance, and cost-sharing policies

  • Assess whether your medications are still covered and at what tier

Some PSHB plans may offer lower cost-sharing if you also have Medicare. Others may require you to meet deductibles or pay higher copays upfront. These differences matter—especially if you take multiple medications.

Protecting Your Budget Going Forward

2025 is a promising year for drug cost savings under PSHB-integrated Medicare Part D coverage, but you still need to stay proactive. Understand the rules, keep track of your costs, and take advantage of the new protections like the $2,000 out-of-pocket cap and payment plan option.

Letting coverage lapse or making assumptions about what’s included can lead to surprise expenses. Take the time to explore your PSHB plan materials carefully, and consider scheduling a review with a professional.

Make Informed Decisions About Your 2025 Coverage

Medicare Part D changes in 2025 are substantial—and they directly affect you as a PSHB enrollee. Whether it’s the new cost cap, the option to pay monthly, or the integrated coverage rules, your choices this year can either protect your wallet or strain your budget.

If you’re unsure how these changes apply to your situation, now is the right time to talk to a licensed agent listed on this website. They can help you understand your options and avoid costly missteps.