Why Medicare Plus PSHB Doesn’t Always Equal Complete Coverage in 2025

Key Takeaways

• Even when you combine Medicare with your PSHB plan in 2025, you may still encounter costs that are not fully covered.

• Understanding the gaps now helps you better plan for your health care needs and avoid surprise expenses later.

How PSHB and Medicare Work Together in 2025

In 2025, Postal Service retirees and eligible family members experience a significant change with the full rollout of the Postal Service Health Benefits (PSHB) Program. When you are enrolled in Medicare and a PSHB plan at the same time, these two sources of coverage are designed to work together to provide strong protection against medical expenses. However, combining them does not mean you automatically achieve complete or unlimited coverage.

Here is how they typically coordinate:

• Medicare Part A and Part B serve as your primary coverage.

• Your PSHB plan acts as secondary coverage, often helping with copayments, coinsurance, and deductibles.

• Prescription drug coverage is integrated through a Medicare Part D Employer Group Waiver Plan (EGWP) linked to your PSHB plan.

Yet, even with both layers active, you will notice areas where additional costs can still emerge.

The Costs Medicare and PSHB May Leave Behind

Despite the dual coverage structure, there are limits to what is paid for in full.

• Part A Deductibles and Coinsurance: Inpatient hospital stays under Medicare Part A involve a deductible ($1,676 per benefit period in 2025) and daily coinsurance after 60 days, which not all PSHB plans fully cover.

• Part B Costs: Medicare Part B in 2025 carries a standard monthly premium ($185), a deductible ($257), and 20% coinsurance for most outpatient services. Your PSHB plan may assist, but not always fully eliminate these costs.

• Out-of-Network Services: Even if you have a PSHB plan that covers out-of-network providers, you could face higher cost-sharing or additional balance billing if a provider refuses Medicare assignment.

• Dental, Vision, and Hearing: Medicare provides little to no standard coverage for routine dental, vision, or hearing care. PSHB plans may offer supplemental benefits, but coverage can be limited or require higher out-of-pocket costs.

Understanding these “leftover” costs will make it easier for you to budget more accurately.

Areas Where Coverage May Feel Incomplete

In 2025, gaps between Medicare and PSHB coverage are most noticeable in a few key areas:

Prescription Drug Costs Beyond the Annual Cap

Thanks to Medicare Part D reforms, the catastrophic coverage phase now begins when your out-of-pocket prescription drug costs reach $2,000. After that, plans cover 100% of covered drug costs. However, not every drug or treatment is guaranteed to be covered, and non-formulary or specialty drugs can still create expenses.

Long-Term Care Services

Neither Medicare nor PSHB fully covers custodial long-term care services, such as assistance with daily living activities at home or in a facility. Medicare only covers medically necessary skilled nursing care for short durations (up to 100 days following a hospital stay), and PSHB plans generally follow Medicare’s lead.

Services Outside the United States

In 2025, Medicare still does not provide coverage for health services received outside of the United States (except in very rare cases). Some PSHB plans offer limited emergency coverage abroad, but it often comes with significant deductibles, coinsurance, or reimbursement limitations.

Experimental or Alternative Treatments

Medicare only covers services deemed “medically necessary” according to national guidelines. Experimental treatments, alternative therapies, and newer procedures might not be covered, and PSHB plans may or may not step in to assist.

Timing and Enrollment Details You Should Know

The PSHB Program officially became effective on January 1, 2025. If you were already enrolled in the Federal Employees Health Benefits (fehb) Program and met eligibility requirements, you were automatically transitioned to a corresponding PSHB plan unless you actively made a change during the Open Season held from November to December 2024.

If you are eligible for Medicare Part B, you must be enrolled in it to maintain your PSHB coverage unless you fall into an exemption category, such as having retired before January 1, 2025, or being covered by the VA or Indian Health Services.

Always check your plan materials closely to verify how Medicare coordination works for your specific plan.

Common Assumptions About Coverage That Cause Problems

1. “Having Both Means I’ll Never Pay Anything Out-of-Pocket”

Even with Medicare and a PSHB plan, you are still responsible for premiums, cost-sharing, and any services not covered under either policy.

2. “My PSHB Plan Covers the Same Things as FEHB Did”

Although PSHB coverage designs are similar to FEHB plans, there are differences, particularly for Medicare-eligible members. For example, some PSHB plans waive deductibles and coinsurance when Medicare Part B is primary, while others do not.

3. “I Can See Any Doctor I Want”

While Medicare allows wide choice among participating providers, PSHB plans may have preferred networks that offer better cost-sharing terms. Out-of-network providers could lead to higher out-of-pocket costs.

Steps You Can Take to Avoid Coverage Surprises

Planning ahead helps you minimize unexpected health care costs. Here are key actions you can take now:

• Review your plan’s Summary of Benefits to understand coordination rules.

• Confirm your providers accept Medicare and are within your PSHB plan’s network if possible.

• Check your prescription drug coverage for formulary restrictions or prior authorization requirements.

• Consider purchasing additional coverage (such as FEDVIP dental/vision insurance) if your needs extend beyond what Medicare and PSHB offer.

• Understand travel coverage limitations if you plan to spend time abroad.

How PSHB Plans Work Differently for Medicare-Eligible Members

If you are enrolled in Medicare Parts A and B, your PSHB plan may:

• Waive most deductibles and coinsurance for medical services covered by Medicare.

• Offer enhanced drug coverage through the integrated Part D plan.

• Require coordination of benefits claims filing, meaning claims must first process through Medicare.

If you do not enroll in Medicare Part B when required, your PSHB plan may treat you as if Medicare had paid first, meaning you will pay higher out-of-pocket costs.

Final Thoughts on Making Your Coverage Work

Relying solely on the combination of Medicare and PSHB without understanding the limits can create frustration and unexpected costs in 2025. It’s important to recognize where your coverage is strong and where you might need to plan for additional support.

If you want help understanding your options or checking if your PSHB plan is the right fit alongside Medicare, reach out to a licensed insurance agent listed on this website for personal assistance.