Key Takeaways

  • Failing to enroll in Medicare Part B on time can result in a lifetime monthly penalty that increases the longer you delay enrollment without qualifying coverage.

  • For Postal Service Health Benefits (PSHB) enrollees, enrolling in Medicare Part B is not just strongly recommended—it is a requirement for many retirees and can significantly reduce overall health costs.

Why Part B Can’t Be Treated Like an Afterthought

Medicare Part B is often misunderstood. Some delay enrolling, thinking they won’t need it right away. Others assume their PSHB coverage is sufficient on its own. But if you’re eligible for Medicare and delay Part B enrollment without proper coverage in place, you face more than just inconvenience—you face permanent financial penalties.

The rules around Medicare Part B are strict, and for good reason. It’s the part of Medicare that covers essential medical services like doctor visits, outpatient care, durable medical equipment, and preventive services. For PSHB annuitants and their eligible family members, Part B can work in tandem with your PSHB plan to significantly lower your out-of-pocket costs. But only if you enroll on time.

When You Must Enroll in Medicare Part B

The clock starts ticking once you become eligible for Medicare—usually at age 65.

Your Initial Enrollment Period (IEP)

This is a 7-month window:

  • It begins 3 months before the month you turn 65

  • Includes your birthday month

  • Ends 3 months after your birthday month

During this time, you can enroll in Medicare Part B without any late enrollment penalty. This is your one-time opportunity to get Part B coverage without long-term financial consequences—unless you qualify for a Special Enrollment Period.

Special Enrollment Period (SEP) for Postal Annuitants

Because PSHB requires many annuitants and eligible family members to enroll in Medicare Part B, exceptions were made for the 2024 transition year. A Special Enrollment Period (SEP) ran from April 1 to September 30, 2024, allowing qualified individuals to sign up for Part B without penalty. This SEP has now ended.

Moving forward, unless you have other creditable coverage (like from current active employment), delaying Part B enrollment will result in late penalties.

What the Late Enrollment Penalty Actually Costs You

The penalty for enrolling in Medicare Part B late is steep—and permanent.

  • You pay 10% more for each 12-month period you were eligible for Part B but didn’t enroll.

  • The penalty is added to your monthly premium for life.

  • It applies even if you only delayed for a short time.

For example, a two-year delay leads to a 20% penalty added every month for as long as you have Part B. This is not a one-time fee—it continues for the rest of your life.

PSHB Requirements That Make Part B Even More Critical

With the transition to PSHB in 2025, the relationship between Medicare and your Postal Service benefits has changed significantly.

Who Must Enroll

You must enroll in Medicare Part B to keep full PSHB coverage if:

  • You are a Postal Service annuitant entitled to Medicare Part A

  • You become eligible for Medicare on or after January 1, 2025

  • You’re a covered family member who is also eligible for Medicare

Exceptions Exist, But Are Limited

Some are exempt, such as:

  • Annuitants who retired on or before January 1, 2025, and are not enrolled in Part B

  • Those aged 64 or older as of January 1, 2025

  • Residents outside the U.S.

  • Individuals covered by VA or Indian Health Services

If you’re not in one of these categories and you skip Part B, you risk losing major portions of your PSHB coverage.

How PSHB and Part B Work Together to Lower Costs

When you enroll in both PSHB and Medicare Part B, the plans coordinate in a way that reduces your financial burden.

  • Medicare Part B pays first for outpatient and physician services.

  • Your PSHB plan pays secondary, often covering remaining deductibles, coinsurance, or copays.

This reduces the cost of:

  • Doctor’s visits

  • Lab work

  • Surgeries

  • Specialist appointments

  • Home health services

Many PSHB plans even waive deductibles and coinsurance when Medicare Part B is your primary payer, further reducing your expenses. That level of savings disappears if you don’t enroll in Part B.

Misconceptions That Lead to Penalties

Misunderstandings about Medicare Part B are common. Here are some of the most frequent ones that lead to costly mistakes:

  • “I already have PSHB, so I don’t need Medicare Part B.”

    This might have been true under FEHB, but PSHB now requires Part B for full benefits.

  • “I’ll just enroll later when I need it.”

    Unless you have creditable coverage, that decision brings a penalty—and gaps in coverage.

  • “I thought my spouse’s plan counted as coverage.”

    Only active employment-based coverage counts as creditable. Retiree plans, including PSHB without Medicare, don’t.

  • “I missed the SEP—can’t I just enroll during Open Enrollment?”

    You can enroll during Medicare’s General Enrollment Period (January 1 to March 31), but coverage won’t begin until July 1—and penalties will apply.

How to Avoid Mistakes and Missed Deadlines

To avoid costly penalties and coverage issues, you need to plan ahead. Here’s how to stay ahead of Medicare deadlines:

  • Mark your calendar at least six months before your 65th birthday.

  • Review your eligibility for Medicare Part A and Part B.

  • Check your status with PSHB—whether you’re required to enroll in Part B.

  • Enroll on time during your IEP or any applicable SEP.

  • Get help from a licensed agent listed on the website if you’re unsure.

Waiting to act—even for a few months—can cost you thousands over your retirement.

How the General Enrollment Period Works—And Why It’s Costly

If you miss your Initial Enrollment Period and don’t qualify for a Special Enrollment Period, your only chance to enroll in Medicare Part B is during the General Enrollment Period (GEP):

  • When: January 1 to March 31 each year

  • Coverage Begins: July 1

You’ll also face late enrollment penalties, and you may have a gap in coverage for several months until Part B takes effect.

Planning Your Retirement Around Medicare and PSHB

The timing of your retirement and Medicare eligibility must align to ensure you avoid late penalties and coverage issues. Key steps include:

  • Start planning by age 64 to understand how PSHB and Medicare work together

  • Verify when your PSHB plan requires Medicare Part B enrollment

  • Consider the long-term impact of higher lifetime premiums if you delay

  • Account for both coverage and cost in your retirement budget

What to Do If You’ve Already Delayed Enrollment

If you’ve missed your IEP or SEP and aren’t enrolled in Part B, here’s what you can still do:

  • Sign up during the General Enrollment Period (Jan 1–Mar 31)

  • Expect coverage to begin July 1, with penalties added to your premium

  • Contact a licensed agent listed on the website to assess your options

Even with penalties, it’s better to enroll sooner than continue without coverage. The costs and risks only grow over time.

Protecting Your Retirement Budget From Unnecessary Surprises

Your PSHB benefits are valuable, but they work best when paired with timely Medicare enrollment. Skipping Medicare Part B or enrolling late doesn’t just impact your access to care—it directly increases your costs for the rest of your life.

When you coordinate your Medicare Part B enrollment with your PSHB plan, you get broader coverage, lower out-of-pocket costs, and a more stable financial future.

If you have questions or need help evaluating your Medicare Part B options, connect with a licensed agent listed on this website for personalized support.