Key Takeaways

  • New rules for Medicare Part D in 2025 introduce out-of-pocket caps and payment options, but can cause unexpected coordination issues with your PSHB prescription coverage.

  • If you’re enrolled in a PSHB plan and are also required or choose to enroll in Medicare Part D, it’s essential to understand which plan pays first and how to avoid overlapping or duplicate drug coverage.

Understanding the 2025 Part D Changes

In 2025, Medicare Part D introduces significant reforms under federal legislation aimed at reducing drug costs and improving access to prescription medications. Two of the most notable changes include:

  • A $2,000 cap on annual out-of-pocket costs for covered prescription drugs.

  • The Medicare Prescription Payment Plan, which lets you spread your drug expenses over the calendar year in monthly installments instead of paying all at once.

While these changes offer clear advantages for many Medicare enrollees, they also introduce coordination challenges for those of you covered under the Postal Service Health Benefits (PSHB) Program.

PSHB Prescription Coverage Is Not Optional

If you’re a Medicare-eligible annuitant or family member enrolled in a PSHB plan in 2025, you are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) through your PSHB plan. This means:

  • You do not need to sign up for a separate, individual Medicare Part D plan.

  • Your PSHB plan already includes drug coverage that integrates with Medicare through this group plan.

This integration provides access to:

  • A wide pharmacy network

  • Lower negotiated drug prices

  • Protections against high drug costs through the $2,000 cap (applies via the EGWP structure)

Where Conflicts Can Arise

Problems typically occur when you or a family member:

  • Enrolls in a separate, individual Medicare Part D plan (possibly unaware that you already have drug coverage through PSHB)

  • Tries to coordinate benefits between two different Part D plans (which isn’t allowed)

  • Declines the PSHB-integrated EGWP and mistakenly expects Medicare Part D to fully substitute for it

Any of these actions can result in loss of drug coverage under your PSHB plan and unnecessary expenses.

You Can’t Have Two Part D Plans

Medicare prohibits individuals from being enrolled in more than one Medicare Part D plan at a time. If you enroll in an individual Part D plan while already covered under your PSHB-provided EGWP, Medicare will automatically terminate one of the plans — and it may be your PSHB drug coverage that gets dropped.

This can trigger a series of complications:

  • You may lose access to the broader prescription benefits offered under your PSHB plan.

  • PSHB plans may deny certain claims if you’re no longer considered enrolled in their EGWP.

  • Re-enrollment in the PSHB drug plan may not be available until the next Open Season or a qualifying life event.

Opting Out Has Serious Consequences

You are allowed to opt out of the PSHB Part D EGWP, but doing so has lasting consequences:

  • You’ll no longer receive any prescription drug coverage through your PSHB plan.

  • This opt-out applies for the entire year and may extend beyond that if not reversed during Open Season.

  • Rejoining may require waiting until the next annual election period, which could leave you uncovered or underinsured for months.

Unless you have alternate, credible drug coverage — which must meet Medicare’s minimum standards — opting out is likely to result in coverage gaps.

Payment Plans vs. Coordination of Benefits

The new 2025 Prescription Payment Plan allows Medicare beneficiaries to distribute their drug expenses across 12 monthly payments. While this helps reduce up-front costs, it doesn’t coordinate well with PSHB billing cycles or cost-sharing rules.

You may encounter:

  • Double billing confusion if both your PSHB plan and the standalone Part D plan attempt to manage payment schedules.

  • Incorrect copayment applications if the systems don’t properly track which plan paid what.

  • Delayed reimbursements or denied claims due to system conflicts.

To avoid these issues, you must stay within your PSHB-integrated drug plan and avoid signing up for any individual Part D plan unless you’ve fully opted out of PSHB prescription drug coverage.

What You Should Do Before Making Any Changes

Before enrolling in any Medicare Part D plan or opting out of your PSHB drug benefits, it’s important to:

  • Carefully review your Annual Notice of Change (ANOC) from your PSHB plan.

  • Speak with a licensed agent listed on this website who understands the PSHB-Medicare relationship.

  • Compare the total out-of-pocket costs, not just premiums, between PSHB with EGWP and a separate Part D plan.

  • Confirm which plan offers access to your current medications, preferred pharmacies, and pricing tiers.

Special Rules for New Medicare Enrollees

If you are just becoming eligible for Medicare, you might assume enrolling in a standalone Part D plan is necessary. However, if you’re already in a PSHB plan, your drug coverage is automatically included through the EGWP.

During your Initial Enrollment Period for Medicare:

  • Do not enroll in a separate Part D plan unless you’re planning to leave PSHB altogether.

  • Contact your PSHB plan to confirm your automatic enrollment in the EGWP.

Avoiding duplication starts with understanding that your PSHB coverage already meets Medicare’s standard for drug benefits.

Impact on Spouses and Dependents

Family members covered under your PSHB plan are also affected by Part D rules. If a covered spouse or dependent enrolls in a standalone Part D plan:

  • It could jeopardize their PSHB drug coverage.

  • PSHB may interpret this as an opt-out for that individual.

Make sure everyone under your PSHB family coverage understands they’re already enrolled in an integrated Medicare Part D plan and don’t need to take further action.

Watch for Mid-Year Notices

Starting in 2025, Medicare enrollees will receive a Mid-Year Enrollee Notification of Unused Supplemental Benefits between June 30 and July 31. While this notice can help you track which supplemental benefits you haven’t used, it may also include confusing details about Part D benefits.

Make sure to:

  • Compare your notification against your PSHB plan’s EGWP documentation.

  • Contact your PSHB plan or a licensed agent listed on this website if you notice discrepancies.

PSHB Plans Already Reflect Part D Cost Caps

The $2,000 annual out-of-pocket cap introduced by Medicare Part D is already built into most PSHB EGWP plans for 2025. If you’re enrolled in a PSHB plan that integrates with Medicare, you do not need to enroll in another plan to receive this benefit.

In fact, enrolling in a separate plan may cause you to lose access to the cost-sharing protections your PSHB plan provides.

Get Help Before You Make a Move

Before making any changes to your Medicare drug coverage or PSHB enrollment:

  • Review your PSHB plan materials thoroughly.

  • Consult a licensed agent listed on this website.

  • Don’t assume that changes in Medicare rules automatically mean action is required on your part.

Protect Your Coverage With the Right Information

The reforms to Medicare Part D in 2025 are designed to improve affordability and access to prescription drugs. But for Postal Service annuitants and their families covered under PSHB, these updates may also bring potential for confusion and conflict.

Avoid overlapping coverage, unnecessary expenses, and permanent loss of benefits by staying enrolled in your PSHB-integrated EGWP — and never enrolling in a separate Part D plan unless you’ve carefully reviewed all implications.

For tailored guidance, get in touch with a licensed agent listed on this website. They can walk you through the rules that matter for your specific PSHB plan and help you avoid costly mistakes.