Key Takeaways

  • Enrolling in Medicare Part B isn’t optional for many Postal retirees—it’s essential to keep full PSHB benefits.

  • Making strategic Medicare decisions in 2025 can significantly reduce your out-of-pocket healthcare costs through the PSHB system.

Why a Medicare Strategy Is Now a Long-Term Necessity

If you’re a Postal retiree or planning to retire soon, your health coverage under the Postal Service Health Benefits (PSHB) Program hinges on more than just picking the right plan. In 2025, Medicare isn’t sitting in the background—it’s built directly into how your PSHB plan functions. To ensure your health coverage remains effective and affordable long-term, you need a smarter, more strategic approach to Medicare.

Let’s unpack why.

The PSHB Requirement: Medicare Part B Isn’t Always a Choice

Starting January 1, 2025, PSHB enrollment rules have changed. If you’re a Medicare-eligible annuitant or covered family member, you’re generally required to enroll in Medicare Part B to keep your PSHB coverage.

You may be exempt if:

  • You retired on or before January 1, 2025.

  • You’re an active Postal employee aged 64 or older as of January 1, 2025.

  • You live outside the U.S. or qualify for care through the VA or Indian Health Services.

For everyone else, skipping Part B will mean losing significant benefits under your PSHB plan.

What Happens If You Skip Medicare Part B?

If you’re subject to the Part B requirement and don’t enroll, your PSHB plan may:

  • Deny certain claims or refuse to pay the full amount for services.

  • Stop providing drug coverage if tied to a Medicare Part D EGWP.

  • Treat your care as out-of-network, dramatically raising your costs.

Simply put, skipping Medicare Part B could break the system your PSHB plan relies on—leaving you exposed to much higher expenses.

Medicare and PSHB Are Designed to Work Together

Your PSHB plan in 2025 likely coordinates with Medicare in specific ways:

  • Medicare pays first for covered services.

  • PSHB pays secondary, often reducing or eliminating your share of the cost.

  • Prescription coverage may be delivered through a Medicare Part D EGWP linked to your PSHB plan.

When both systems are in place, you often enjoy:

  • Lower or waived deductibles

  • Reduced or no copays

  • Broader provider access

But all these advantages vanish if you’re not enrolled in Medicare.

Know the Cost Structure in 2025

Understanding the 2025 cost structure helps clarify why Medicare matters:

  • Medicare Part B premium: $185/month (standard premium)

  • PSHB premiums: Vary by plan and tier, but annuitants generally pay 30% of total premiums

  • Out-of-pocket maximums (PSHB): $7,500 (Self Only), $15,000 (Self Plus One or Family)

  • Prescription drug out-of-pocket cap: $2,000 annually under Medicare Part D

When Medicare is paired with PSHB, your actual expenses often fall well below these maximums. Without Medicare, you could reach them much faster.

Why Timing Matters More Than Ever

You can’t afford to get the timing wrong when it comes to enrolling in Medicare:

  • Initial Enrollment Period (IEP): 3 months before, the month of, and 3 months after your 65th birthday.

  • General Enrollment Period (GEP): January 1 to March 31 if you missed your IEP. Coverage starts July 1 and penalties apply.

  • Special Enrollment Period (SEP): Available if you delayed Medicare due to active employment. Ends 8 months after job-based coverage ends.

Missing these windows can lead to late enrollment penalties—10% for every 12-month delay—which apply for life. That adds up quickly over retirement.

Consider the Medicare Advantage Effect

While many PSHB plans offer coordination with traditional Medicare (Parts A and B), some retirees consider switching to Medicare Advantage. But this route can interfere with your PSHB drug and medical benefits unless it’s a PSHB-approved option.

Unless a PSHB plan explicitly includes a Medicare Advantage pathway that preserves your Part D EGWP and coordination benefits, you risk creating gaps in your coverage.

If you’re considering a move like this, speak with a licensed agent listed on this website first. The wrong switch could cost you far more than expected.

The Importance of Coordination of Benefits (COB)

Coordination of Benefits ensures that:

  • Medicare pays primary

  • PSHB acts as the secondary payer

This layered structure helps:

  • Avoid duplicate payments

  • Minimize out-of-pocket costs

  • Ensure accurate claim processing

But this only works if your records are up to date.

To keep COB functioning smoothly:

  • Make sure OPM and your plan have your Medicare information

  • Update your enrollment status after turning 65 or retiring

  • Check that your Medicare and PSHB addresses match

What If You’re Already Retired?

If you retired on or before January 1, 2025, you’re not required to enroll in Medicare Part B. But that doesn’t mean you should ignore it.

Even though it’s optional in your case, enrolling in Medicare may still reduce your total healthcare costs. Many PSHB plans:

  • Waive deductibles when paired with Medicare

  • Offer enhanced coordination that leads to fewer surprise bills

  • Provide access to Medicare Part D EGWP with a $2,000 out-of-pocket cap

Failing to take advantage of these features may mean paying more for the same services.

Medicare Prescription Integration Isn’t Optional

Most PSHB plans offer prescription coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). If you’re eligible for Medicare and enrolled in PSHB, you’ll automatically receive this drug coverage unless you opt out.

But opting out means:

  • You lose your drug coverage under PSHB

  • Re-enrollment is restricted

  • You’ll have to find other coverage on your own

With the 2025 cap of $2,000 for out-of-pocket drug costs under Part D, losing EGWP access could be a costly mistake.

Plan Changes Happen Every Year—Review Yours Annually

From now on, the intersection between PSHB and Medicare will likely shift year to year. That’s why you should:

  • Review your Annual Notice of Change (ANOC) every fall

  • Reassess your Medicare enrollment status each year

  • Compare PSHB plan options during Open Season (November–December)

The wrong assumptions from last year could cost you this year.

Take Action Early, Not After a Claim Is Denied

Many retirees don’t realize there’s a problem until a claim is denied—or a bill arrives that Medicare would have covered. By then, it’s too late to avoid the cost.

Being proactive with your Medicare and PSHB strategy means:

  • Confirming Medicare Part B enrollment

  • Understanding your PSHB plan’s Medicare requirements

  • Keeping your coordination records up to date

Waiting until something goes wrong can leave you with no safety net.

A Better Strategy Means Lower Costs, Smoother Coverage

If you want your PSHB plan to work long-term, your Medicare strategy needs to be built in from the start. Treat Medicare Part B enrollment as a foundation, not an option, unless you qualify for an exemption.

If you’re still unsure how Medicare should fit into your PSHB plan or what steps to take next, speak with a licensed agent listed on this website to get advice tailored to your retirement goals and health needs.