Key Takeaways

  • Medicare doesn’t cover everything, and certain gaps can result in significant out-of-pocket costs—especially for long-term care, dental, vision, and hearing.

  • As a Postal Service Health Benefits (PSHB) enrollee, your choices now directly influence how well you are shielded from Medicare’s most common coverage shortfalls.

What You Think Medicare Covers vs. What It Actually Does

Medicare is one of the most recognized health insurance programs in the country, but it isn’t always understood—especially when it comes to what it doesn’t pay for. If you’re enrolled in a PSHB plan or nearing retirement as a postal employee or annuitant, you need to understand the assumptions that can lead to unexpected expenses.

Original Medicare, which includes Part A (hospital insurance) and Part B (medical insurance), provides valuable coverage, but its scope is limited:

  • Part A covers inpatient hospital care, skilled nursing facility care (under strict conditions), hospice, and some home health services.

  • Part B covers outpatient care, doctor visits, preventive services, and durable medical equipment.

However, these parts alone leave you exposed to several significant cost areas. And under PSHB in 2025, this matters more than ever since your health benefits now integrate with Medicare in specific ways, depending on your eligibility and enrollment choices.

Where Medicare Leaves Gaps That Cost You

Medicare does not provide full financial protection. Here are some of the key areas where coverage either doesn’t exist or stops short:

Long-Term Custodial Care

Medicare does not cover most long-term care, including extended stays in nursing homes or in-home custodial care, unless skilled medical services are also required and documented. Many individuals mistakenly assume Medicare will step in for these expenses, but it typically does not beyond short post-hospital rehab stays (up to 100 days, and even that requires meeting strict qualifications).

Dental, Vision, and Hearing

In 2025, Original Medicare still excludes routine dental cleanings, fillings, eye exams for prescription glasses, and hearing aids. These are all services older adults often need regularly, and without additional coverage, the out-of-pocket costs can add up quickly.

Foreign Travel Emergencies

If you’re traveling internationally—even just across a border—Medicare will not cover emergency care, with very few exceptions. This can become a major concern for retirees who frequently visit family or take trips abroad.

Prescription Drug Costs

Medicare Part D covers prescription drugs but often with deductibles, copayments, and coverage rules that can be confusing. Although the 2025 $2,000 annual out-of-pocket cap helps, many beneficiaries still encounter steep costs, especially if they don’t understand how PSHB coordinates with Medicare’s drug coverage.

How PSHB Fits Into the Medicare Picture

As a Postal Service employee or annuitant, your PSHB plan works differently than the old FEHB program. Under PSHB in 2025, once you’re eligible for Medicare, you are generally required to enroll in Medicare Part B to maintain full PSHB benefits—unless you qualify for an exception.

Your PSHB plan and Medicare can work together to reduce costs, but only if you’ve enrolled in the right parts of Medicare and chosen a plan that coordinates effectively.

PSHB With Medicare: How It Can Help

  • Waived Deductibles and Copayments: Many PSHB plans reduce or eliminate these when you’re also enrolled in Medicare Part B.

  • Lower Prescription Drug Costs: PSHB plans now integrate with Medicare Part D through an Employer Group Waiver Plan (EGWP), which often means lower copays and better drug access.

  • Expanded Coverage: With both PSHB and Medicare Part B, you’re more likely to have coverage for both inpatient and outpatient care with minimal out-of-pocket costs.

When You Skip Medicare Part B

Some PSHB enrollees try to save on premiums by declining Medicare Part B. But that choice can cost more later:

  • Loss of Coordination Benefits: Without Part B, your PSHB plan may not waive deductibles or coinsurance.

  • Limited Access to Full Benefits: Some services covered by PSHB only coordinate well if Medicare is also paying its share first.

  • Penalties: Enrolling in Part B late usually results in lifelong monthly penalties unless you qualify for a special enrollment exception.

Timelines That Matter in 2025

Understanding the timing of Medicare enrollment and PSHB coordination is crucial.

  • Initial Enrollment Period (IEP): This seven-month window starts three months before you turn 65, includes your birthday month, and extends three months after. It’s the optimal time to enroll in Medicare Part A and B to avoid penalties.

  • General Enrollment Period (GEP): Runs January 1 through March 31 each year for those who missed their IEP. Coverage begins July 1, and late penalties may apply.

  • Annual Enrollment Period (AEP): October 15 through December 7, when you can make changes to Medicare Advantage or Part D plans. Not as relevant if you’re sticking with Original Medicare plus PSHB.

  • PSHB Open Season: Occurs from November to December each year. During this period, you can evaluate your PSHB plan options, make changes, and ensure it still fits your Medicare status and coverage needs.

The Financial Impact of Ignoring Medicare’s Limits

Let’s break down some financial exposure you could face without the right Medicare + PSHB coordination in place:

  • Inpatient Hospital Stay: Medicare Part A covers 100% for the first 60 days after the deductible ($1,676 in 2025), then charges a daily coinsurance. PSHB can cover the coinsurance—but only if Medicare Part A has paid first.

  • Outpatient Services: Without Medicare Part B, you could pay the full PSHB deductible (which can be $350–$2,000 depending on your plan), plus coinsurance on top.

  • Prescriptions: Without Medicare Part D or the integrated PSHB drug benefit, you may pay more for medications—especially brand-name or specialty drugs.

  • Skilled Nursing Facility Care: After 20 days, you pay $209.50 per day unless additional coverage kicks in. With PSHB and Medicare, this cost may be reduced or waived entirely.

Common Misunderstandings That Can Cost You

“I Have PSHB, So I Don’t Need Medicare”

This is one of the most expensive myths. PSHB and Medicare are meant to work together in 2025—not replace each other. Skipping Medicare means you’ll pay more out-of-pocket and potentially lose valuable plan perks.

“Medicare Covers Everything Once I Turn 65”

It doesn’t. Routine dental, vision, and hearing services are all excluded under Original Medicare. These are often high-frequency services as you age, and you’ll need either PSHB enhancements or separate coverage to avoid out-of-pocket costs.

“I’ll Sign Up Later If I Need It”

If you don’t enroll in Medicare Part B when first eligible and lack credible coverage, you’ll face a 10% penalty for every 12-month period you delayed—forever. PSHB doesn’t erase that risk.

What You Can Do to Avoid Surprise Costs

To protect yourself from gaps that show up at the worst possible time, you can take a few key steps now:

  • Enroll in Medicare Part B when eligible to maintain full PSHB coverage.

  • Check your PSHB plan booklet to see how it integrates with Medicare. Look specifically at sections on cost-sharing, drug coverage, and Medicare coordination.

  • Consider your total healthcare needs—not just the premium. Factor in drug needs, future dental or vision services, and potential hospitalizations.

  • Use Open Season each year to reassess your PSHB plan in light of any changes to your health or Medicare eligibility.

Planning Ahead for Better Health and Lower Costs

Health coverage after age 65 isn’t something to set and forget. The better you understand Medicare’s limits, the more strategically you can use your PSHB options. As 2025 progresses, PSHB enrollees have more resources and more power to align benefits—but only if they take the time to plan.

If you ignore the warning signs or delay decisions, you may face:

  • Unexpected medical bills

  • Limited access to needed care

  • Coverage denials due to non-enrollment

  • Missed opportunities to enhance your benefits

Smart Coordination Now Can Prevent Stress Later

You shouldn’t have to learn the hard way that Medicare doesn’t cover what you thought it would. By reviewing your PSHB plan annually, staying aware of Medicare timelines, and enrolling in the right parts of Medicare when eligible, you can keep your health coverage stable, comprehensive, and cost-efficient.

If you’re unsure whether your current setup is working in your favor, now’s the time to act. Speak with a licensed agent listed on this website to review your coverage and get tailored advice.