Key Takeaways

  • Many postal retirees feel uncertain about switching to the new PSHB system in 2025, especially when it comes to Medicare integration, premium sharing, and coverage differences.

  • Understanding the potential downsides—such as higher out-of-pocket costs or reduced flexibility—can help you make a more informed decision before the next Open Season.

The 2025 Shift: From Familiar to Uncharted

If you retired under the Federal Employees Health Benefits (FEHB) Program, the transition to the Postal Service Health Benefits (PSHB) Program in 2025 may seem automatic. In fact, most eligible retirees are being automatically enrolled in a PSHB plan if they didn’t opt out during the designated enrollment window. On paper, it looks like a seamless switch. But beneath the surface, several nuances are prompting hesitation among retirees like you.

This shift marks the largest structural change to retiree health benefits in decades. While the Office of Personnel Management (OPM) presents the transition as a modernization effort, some retirees aren’t fully convinced it works in their favor.

Understanding What You’re Leaving Behind

The FEHB program, despite its rising costs over the years, has been reliable and relatively stable. Retirees know what to expect. With PSHB, many aspects appear similar—same carriers, similar networks, and comparable benefits—but the structure is not identical.

Here’s why some retirees hesitate:

  • Loss of familiarity: FEHB has decades of user experience behind it. PSHB is brand new as of 2025, and while it’s modeled after FEHB, new systems always carry the risk of growing pains.

  • Medicare Part B requirement: Many Medicare-eligible annuitants must now enroll in Part B to maintain full PSHB benefits. This wasn’t a requirement under FEHB.

  • Lack of plan flexibility: Under PSHB, plan options are restricted to those available specifically to Postal Service retirees. This could limit your ability to switch to another FEHB plan not offered under PSHB.

Medicare Part B Enrollment: A Make-or-Break Factor

One of the most significant concerns is the Medicare Part B enrollment mandate. If you turned 65 before January 1, 2025, and are not enrolled in Part B, you’re generally exempt from the mandate. However, anyone who becomes Medicare-eligible after that date must enroll in Part B or risk losing access to full PSHB coverage.

This adds an ongoing cost—currently $185 per month in 2025 for the standard Part B premium—and could represent a significant shift in how you budget for health care. For some retirees, that added monthly cost feels like a penalty, especially if they had opted not to take Part B under FEHB.

Even for those already enrolled in Part B, the concern shifts to how plans coordinate benefits. Some PSHB plans advertise reduced cost-sharing if you have Medicare, but these advantages can vary greatly, and they aren’t always spelled out in easy-to-understand terms.

Premium Contributions: A Closer Look at What You Pay

One often overlooked element in this transition is how much of the premium you’re now responsible for as a retiree. Under PSHB, the government continues to cover about 70% of total premiums—but your share depends on your enrollment type and plan selection.

The 2025 monthly contribution for annuitants is:

  • Self Only: $241.07

  • Self Plus One: $521.06

  • Self and Family: $567.02

These costs may resemble what you were used to under FEHB, but without the flexibility to shift to other FEHB options, your ability to manage these costs is somewhat reduced.

Moreover, if you are retired and not yet Medicare-eligible, you may find that your PSHB premiums are higher than anticipated for the coverage you receive, especially when compared to what other federal retirees (still in FEHB) may be paying.

Copayments and Deductibles: The Surprise Charges

One key reason retirees are hesitating is the fine print around cost-sharing. While PSHB plans may look similar to their FEHB counterparts, retirees often don’t realize that:

  • Copayments for specialists can be $30–$60

  • Urgent care visits can cost $50–$75

  • Emergency room copays may reach $150, depending on the plan

And that’s before even meeting your deductible, which can range from $350 to $1,500 for in-network services.

These out-of-pocket expenses hit retirees hardest when they need care the most. For those on fixed incomes, especially ones counting on predictable costs, these variations can be unsettling.

Prescription Drug Changes After 65

Another sticking point is the switch in how drug benefits are administered for Medicare-eligible retirees. As of 2025, your PSHB prescription benefits are automatically integrated with a Medicare Part D Employer Group Waiver Plan (EGWP).

While this integration provides a new $2,000 cap on out-of-pocket drug spending, there are still areas that cause concern:

  • If you opt out of the integrated Part D coverage, you lose your PSHB drug benefits entirely.

  • Some drugs may now be covered under different tiers or subject to new formulary rules.

  • You must navigate both Medicare and PSHB drug communications, which can be confusing and fragmented.

Retirees who preferred the simplicity of a single FEHB prescription plan are now facing dual oversight and the administrative burden that comes with it.

Annual Enrollment Pressures

Even though the transition in 2025 was largely automatic, you still have to re-evaluate your coverage during each annual Open Season. The window typically runs from November to December, and this is your only opportunity to:

  • Change to a different PSHB plan

  • Switch between Self, Self Plus One, and Self and Family options

  • Ensure your Medicare information is up to date

This can be stressful if you’re not closely tracking your benefits or if you didn’t fully understand the implications of the automatic enrollment the first time around.

Out-of-Network Costs and Coverage Gaps

While many PSHB plans mirror their FEHB origins, network differences do exist. A plan that covered your provider under FEHB may not include them under PSHB—even if the name of the plan stayed the same. And out-of-network coverage is far less forgiving:

  • Coinsurance can rise to 40%-50%

  • Out-of-pocket limits can double compared to in-network rates

This change in provider access is a major source of hesitation, particularly for retirees who have established relationships with long-time specialists.

Why the Transition Still Matters—Even If You’re Already Enrolled

Some retirees mistakenly believe the switch is a one-time administrative event. But each year brings new costs, benefit structures, and network changes. Even if you’ve been automatically enrolled in PSHB, you still need to:

  • Understand your plan’s cost-sharing

  • Keep track of Medicare eligibility milestones

  • Watch for changes in prescription drug coverage

Failing to reassess annually could result in surprise costs or reduced coverage—issues that become more difficult to manage the older you get.

When Familiarity Offers Peace of Mind

The hesitance among retirees isn’t always about cost. For many, it’s about confidence—in the plan, in the provider, and in the system.

FEHB provided decades of trust. PSHB is still proving itself. While it holds long-term benefits for the Postal Service and may streamline administration, it places a new burden of research and decision-making squarely on you.

Take Control of Your Benefits Before They Control You

The transition to PSHB in 2025 is more than a box to check. It affects how you receive care, how much you pay, and how your benefits evolve with Medicare. If you’re still uneasy about the switch—or don’t fully understand how the pieces fit together—it’s not too late to get help.

Speak with a licensed agent listed on this website to clarify:

  • Whether your current plan is still the best fit

  • How your Medicare enrollment affects your PSHB coverage

  • What you can do during the next Open Season to reduce costs or improve access

Being proactive now can prevent regret later.