Key Takeaways

  • Once you turn 65, your deductible under the Postal Service Health Benefits (PSHB) program can behave differently—sometimes being reduced or waived entirely if you’re enrolled in Medicare Part B.

  • If you skip Medicare Part B, you might continue paying the full PSHB deductible and miss out on cost-sharing benefits your plan would otherwise provide.

Understanding the Role of Deductibles in PSHB Coverage

A deductible is the annual amount you must pay out of pocket before your PSHB plan begins to share in your healthcare costs. In 2025, deductibles under PSHB vary depending on the plan type—ranging from approximately $350 to $500 for standard in-network low-deductible plans, and up to $1,500–$2,000 for high-deductible plans.

This amount resets every January 1 and must be met before most non-preventive services are covered. But while these figures are static, your personal deductible experience shifts significantly once you reach age 65 and Medicare enters the picture.

The Turning Point at Age 65: Medicare’s Impact on PSHB Deductibles

When you become eligible for Medicare at age 65, your PSHB coverage doesn’t automatically change—but how your deductible works absolutely can. If you enroll in Medicare Part B, most PSHB plans shift into secondary-payer mode. This shift can reduce your personal financial burden in several ways:

  • Deductible Reductions: Many PSHB plans either reduce or fully waive their deductibles if you’re enrolled in Medicare Part B.

  • Secondary Payer Benefits: Medicare Part B pays first, and your PSHB plan may cover most or all of the remaining balance for Medicare-approved services.

  • Improved Cost Sharing: With Medicare taking the lead, the amount you owe in coinsurance, copayments, and other cost-sharing drops considerably.

This shift allows you to preserve more of your savings and reduce unexpected medical expenses. But the key is being officially enrolled in Medicare Part B. Just being eligible doesn’t trigger any changes in your PSHB plan.

What If You Don’t Enroll in Medicare Part B?

If you decide not to enroll in Medicare Part B when you become eligible, your PSHB plan continues functioning as your sole insurance coverage. This means:

  • You’re Responsible for the Full Deductible: You must meet your entire PSHB deductible out of pocket before benefits begin.

  • Higher Cost Sharing: You’ll continue paying standard coinsurance and copayment amounts as if Medicare weren’t available.

  • No Coordination of Benefits: Without Medicare Part B, your PSHB plan doesn’t offset its share of costs, and you could face higher bills for major services like imaging, outpatient surgery, or durable medical equipment.

This choice may seem economical upfront but can result in much higher long-term healthcare costs.

Annual Reset: Why January 1 Matters More Than You Think

PSHB deductibles reset on January 1 every year. If you turn 65 partway through the year and enroll in Medicare Part B promptly, some of the benefit—like waived or lowered deductibles—can apply for the remaining months of that calendar year.

However, delays in Medicare enrollment can limit these benefits:

  • Initial Enrollment Period (IEP): This seven-month window surrounds your 65th birthday. It includes the three months before your birthday month, your birthday month, and the three months after.

  • General Enrollment Period (GEP): If you miss your IEP, the next opportunity is from January 1 to March 31. Coverage from this enrollment doesn’t begin until July 1.

This delay means that even if you’re Medicare-eligible early in the year, you could end up paying your full PSHB deductible for six months or longer—missing out on significant cost savings.

Double Deductibles: Medicare and PSHB Aren’t the Same Thing

Medicare Part B has its own deductible, which stands at $257 in 2025. PSHB plans have separate deductibles, which may be waived or reduced depending on whether Medicare is involved.

Here’s how the interaction plays out:

  • With Medicare Part B: You pay the Medicare deductible first. After that, many PSHB plans pick up the balance for covered services, sparing you from paying their full deductible.

  • Without Medicare Part B: You’re fully responsible for your PSHB plan’s deductible and all applicable coinsurance, because there is no other insurer to share the burden.

This duplication can confuse many retirees. However, understanding which deductible applies—and when—can prevent costly surprises.

Prescription Drugs: Integrated Coverage or Missed Opportunity?

In 2025, PSHB plans for Medicare-eligible annuitants include integrated prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This setup significantly affects how drug deductibles function:

  • Lower or Waived Deductibles: Although the standard Part D deductible is $590, EGWP plans often reduce or eliminate it entirely for PSHB participants.

  • Catastrophic Coverage Phase: After reaching $2,000 in out-of-pocket drug spending, you pay nothing for covered medications for the rest of the year.

This level of coverage makes it crucial to understand what happens if you skip Medicare enrollment or opt out of the EGWP. Doing so may mean losing access to one of the most generous components of PSHB’s integration with Medicare.

Skipping Medicare Can Get Expensive Fast

While it’s legal to stay on your PSHB plan and ignore Medicare Part B, doing so often leads to higher costs:

  • Deductibles stay high because PSHB has no secondary payer to coordinate benefits.

  • Coinsurance percentages apply fully without Medicare picking up first.

  • Out-of-pocket maximums are hit faster when you’re responsible for all services alone.

You may also lose out on services that would otherwise cost less—or nothing—if Medicare were helping share the load. Over a full year, this can lead to thousands in unnecessary medical spending.

The Hidden Price of Delayed Medicare Enrollment

Postponing Medicare Part B comes with consequences beyond a missed deductible break:

  • Late Enrollment Penalties: If you delay without having other qualifying coverage, you’ll pay a penalty for life—an added monthly premium.

  • Permanent Loss of Coordination Benefits: Some PSHB plans only waive deductibles for people who enroll promptly at age 65.

  • Gaps in Major Service Coverage: Services like skilled nursing, rehab, or home healthcare are often better covered with Medicare in place.

Once you’ve passed 65 and let these opportunities go unused, it can be harder—or impossible—to recover the lost cost savings.

Open Season: The Best Time to Rethink Your Plan

Every year from November to December, PSHB’s Open Season allows you to:

  • Change your PSHB plan if it no longer fits your needs.

  • Evaluate whether your deductible is still manageable.

  • Compare plans that coordinate better with Medicare Part B.

  • Anticipate your 2026 deductible impact if you’re turning 65 soon.

This period is especially important for retirees or soon-to-be retirees who may want to enroll in Medicare or make adjustments to their coverage strategy.

Don’t Assume Deductibles Stay the Same

Two annuitants on the same PSHB plan might pay very different out-of-pocket costs, depending entirely on their Medicare enrollment status. While you might assume your deductible is fixed, the reality is more nuanced. In fact:

  • Enrolling in Medicare Part B often leads to waived or reduced PSHB deductibles.

  • Skipping Medicare leaves you exposed to higher upfront costs and full deductible liability.

  • Timing your enrollment right can preserve significant cost savings in the long run.

You need to treat your deductible not as a static number, but as a conditional part of your coverage that responds to your other insurance decisions.

Let a Licensed Agent Help You Plan Around Deductibles

There’s no reason to go into your next Open Season guessing how your PSHB deductible might behave. Turning 65 triggers big changes—and they don’t always work in your favor if you’re unprepared.

Speak to a licensed agent listed on this website for expert help. They can:

  • Explain your PSHB plan’s specific deductible rules after Medicare enrollment

  • Compare different coverage paths depending on your age and status

  • Help you avoid missteps that could cost thousands annually

The sooner you prepare, the more control you’ll have over your healthcare costs.