Key Takeaways

  • Medicare Part B monthly premiums, deductibles, and cost-sharing in 2025 can come as a surprise if you’re not fully prepared. Even if you’re enrolled in a PSHB plan, you’ll likely have out-of-pocket expenses you didn’t anticipate.

  • The integration of PSHB and Medicare Part B is designed to reduce some of your costs, but it doesn’t eliminate them. You need to understand how these programs work together to avoid unexpected bills.

Why Medicare Part B Costs More Than You Think

When you first sign up for Medicare Part B, you may assume that your healthcare costs will decrease. But if you’re a Postal Service Health Benefits (PSHB) enrollee, you may soon discover that Medicare Part B can introduce an entirely new layer of monthly expenses, deductibles, and cost-sharing requirements.

Understanding these costs upfront is essential. Otherwise, you risk being caught off guard by recurring charges and service-related bills.

Breaking Down Medicare Part B Costs in 2025

In 2025, Medicare Part B includes several categories of expenses:

  • Monthly Premium: The standard monthly premium is $185. However, if your income exceeds certain thresholds, you may pay more under the Income-Related Monthly Adjustment Amount (IRMAA).

  • Annual Deductible: Before Part B pays anything, you must meet a deductible of $257.

  • Coinsurance: After meeting the deductible, Medicare covers 80% of the approved cost for most services. You are responsible for the remaining 20%.

Keep in mind that these figures apply regardless of whether you’re enrolled in a PSHB plan. Medicare is primary, and your PSHB plan generally serves as secondary coverage.

What PSHB Covers After Medicare Kicks In

Once you enroll in both Medicare Part A and Part B, your PSHB plan usually becomes secondary. Many PSHB plans are designed to wrap around Medicare by paying:

  • Part B coinsurance

  • Deductibles for covered services

  • Additional services not fully covered by Medicare

However, this coordination doesn’t mean you’ll have no expenses. Some PSHB plans may not cover certain out-of-network providers or services that Medicare doesn’t approve. And, you’ll still pay premiums for both Medicare Part B and your PSHB plan.

Dual Premiums: Medicare and PSHB

Many enrollees overlook the fact that signing up for Medicare Part B adds a second monthly premium to their budget. In 2025, the average monthly cost for annuitants under PSHB is approximately:

  • Self Only: $241.07

  • Self Plus One: $521.06

  • Self and Family: $567.02

Add to that the Medicare Part B premium of $185 or more, and your monthly healthcare expenses can easily exceed $700 if you’re covering family members.

This can be a shock if you assumed Medicare would significantly lower your out-of-pocket obligations.

Income-Based Premium Increases (IRMAA)

If your modified adjusted gross income (MAGI) from two years prior exceeds $106,000 (individual) or $212,000 (joint), you’ll pay more than the standard Part B premium due to IRMAA.

The Social Security Administration looks at your 2023 tax return to determine your 2025 Part B premium. This often surprises retirees who:

  • Cashed out TSP or IRA accounts

  • Had a large one-time gain

  • Filed jointly while one spouse continued working

If you fall into one of these categories, you might pay hundreds more per month without realizing it until your first bill arrives.

PSHB and Part B Enrollment Requirements

As of 2025, Medicare-eligible annuitants and family members under PSHB are generally required to enroll in Medicare Part B to maintain their PSHB coverage.

There are some exceptions:

  • Retired on or before January 1, 2025

  • Actively employed and age 64+ as of January 1, 2025

  • Living abroad

  • Receiving health services from VA or Indian Health Services

If you don’t meet these exemptions and fail to enroll in Medicare Part B when required, you risk losing your PSHB medical benefits altogether.

Penalties for Delaying Part B Enrollment

Delaying your Medicare Part B enrollment when you’re required to sign up can result in a lifelong penalty. Specifically, your premium increases by 10% for every 12-month period you were eligible but didn’t enroll.

This late enrollment penalty can become permanent unless you qualify for a Special Enrollment Period. For PSHB members, this penalty can apply even if you have other coverage unless it’s considered creditable.

How Your Out-of-Pocket Costs Add Up

Even with both Medicare Part B and a PSHB plan, you may still owe:

  • Coinsurance or copayments for certain outpatient services

  • Costs for providers that don’t accept Medicare

  • Charges for services Medicare doesn’t approve

Additionally, some PSHB plans impose limits on how much they reimburse for out-of-network care or alternative treatments. If you don’t review these details carefully, you may end up paying far more than expected.

Prescription Drugs and Additional Costs

Medicare Part B covers some outpatient medications (such as chemotherapy or injectable drugs), but most prescriptions fall under Part D. In 2025, PSHB plans integrate Medicare Part D through an Employer Group Waiver Plan (EGWP).

This setup includes:

  • A $2,000 annual out-of-pocket cap on prescriptions

  • Automatic enrollment for Medicare-eligible annuitants and family members

  • Penalties and loss of drug coverage if you opt out

If you’re not aware of these rules, you could face high drug costs or find yourself without any prescription coverage.

Coordination of Benefits: Medicare First, PSHB Second

Once you turn 65 and enroll in Medicare Part B, Medicare becomes the primary payer. Your PSHB plan pays after Medicare has settled its share.

This coordination typically works smoothly, but problems arise when:

  • Your doctor doesn’t submit claims to Medicare

  • Your PSHB plan doesn’t recognize your Medicare enrollment

  • You delay notifying your PSHB plan of your Medicare status

Any of these issues can result in billing delays or denied claims that you must resolve on your own.

Strategies to Reduce Unexpected Expenses

To keep your costs under control:

  • Enroll on time: Sign up for Medicare Part B during your Initial Enrollment Period (3 months before to 3 months after your 65th birthday).

  • Verify provider participation: Ensure your doctors accept both Medicare and your PSHB plan.

  • Monitor income levels: Plan large withdrawals or tax events to avoid triggering IRMAA in future years.

  • Review ANOC letters: PSHB and Medicare plans send Annual Notice of Change documents each fall. These list any changes to your premiums, deductibles, or coverage for the coming year.

Annual Open Season: November to December

Each year, from November to December, you can:

  • Switch between PSHB plans

  • Review and change coverage options

  • Confirm coordination with Medicare

Failing to review your coverage during Open Season may leave you stuck with higher costs or coverage that doesn’t align with your healthcare needs.

Why the Bills Often Surprise You

Many enrollees mistakenly believe Medicare Part B will take over all medical costs after age 65. This assumption leads to:

  • Underestimating total monthly premiums

  • Overlooking deductibles and coinsurance

  • Forgetting about drug coverage and service limits

If you’re not prepared, your mailbox may fill with surprise bills for routine outpatient visits, diagnostic tests, or specialist consultations.

Don’t Wait for the Bills to Start Planning

Waiting until after you’re enrolled in Medicare Part B to figure out your financial exposure is risky. Take time before your 65th birthday to:

  • Estimate your total monthly healthcare budget

  • Understand PSHB integration with Medicare

  • Identify any out-of-pocket gaps you may face

  • Reach out to a licensed agent listed on this website if you need help comparing options

Understanding these details now could save you hundreds, even thousands, in the years ahead.

Take Control of Your PSHB and Medicare Costs

If you’re a PSHB enrollee nearing age 65 or already Medicare-eligible, now is the time to review how Medicare Part B will affect your healthcare costs. The combination of dual premiums, cost-sharing, and prescription rules creates a layered system that’s easy to misjudge.

To make the most of your benefits and avoid surprise expenses, talk with a licensed agent listed on this website. They can help you:

  • Navigate enrollment timelines

  • Evaluate whether your current PSHB plan works well with Medicare

  • Project monthly and annual healthcare costs based on your income and coverage choices