Key Takeaways

  • Some PSHB benefits may appear robust but include hidden limitations, such as provider network restrictions, Medicare coordination rules, and prescription drug limitations.

  • Understanding exclusions and how your plan integrates with Medicare is critical to avoid redundant costs or care gaps, especially in retirement.

What PSHB Promises vs. What You Might Actually Get

The Postal Service Health Benefits (PSHB) program aims to provide comprehensive medical coverage for USPS employees, retirees, and their families. On paper, the coverage appears solid—offering everything from routine doctor visits to hospital care, prescriptions, and even wellness incentives. However, as with many federal benefits programs, the fine print reveals important restrictions and exceptions that could impact your access to care and increase your out-of-pocket costs.

By 2025, many USPS retirees are navigating PSHB for the first time following its full transition from the Federal Employees Health Benefits (FEHB) Program. This shift brings fresh questions about what is—and isn’t—covered.

Medicare Integration Isn’t Optional for Everyone

If you’re eligible for Medicare, your PSHB plan may require you to enroll in Medicare Part B. In 2025, this requirement applies to many annuitants unless they qualify for specific exceptions, such as:

  • Retired on or before January 1, 2025

  • Reached age 64 before January 1, 2025

  • Living abroad with no access to Medicare

  • Covered by Indian Health Services or the VA

Failing to enroll in Part B when required could lead to reduced benefits or even the loss of certain PSHB coverage components. And if you delay Part B enrollment past your initial eligibility, you may face a permanent late enrollment penalty.

Prescription Drug Coverage Has New Rules in 2025

PSHB plans now integrate Medicare Part D coverage for Medicare-eligible enrollees through an Employer Group Waiver Plan (EGWP). This integration has its benefits—like capping your out-of-pocket drug costs at $2,000 per year—but also comes with limitations:

  • If you opt out of the EGWP, you lose your drug coverage under PSHB.

  • You cannot re-enroll in the PSHB drug benefit mid-year.

  • Not all medications are covered, and some may require prior authorization or step therapy.

While the $2,000 cap helps contain costs, navigating formularies and utilization rules may still limit access to the medications you expect.

You Might Pay More for Out-of-Network Care

PSHB plans typically offer national coverage, but not all plans treat out-of-network providers the same. If you see a provider outside your plan’s preferred network, you may encounter:

  • Higher coinsurance rates—sometimes 40% to 50%

  • Higher deductibles—often ranging from $1,000 to $3,000

  • Balance billing if the provider charges more than the plan allows

Even for retirees living in remote or rural areas, not all providers are accessible at the in-network rate. Make sure your regular physicians and specialists are in-network before selecting your plan.

Wellness and Preventive Services Are Limited by Conditions

While PSHB promotes wellness benefits, such as annual physicals, screenings, and immunizations, these services are often subject to limitations:

  • Frequency caps (e.g., one physical per year)

  • Age restrictions (e.g., mammograms starting at age 40)

  • Lack of coverage for services not classified as “preventive”

Additionally, services that are technically preventive but tied to a diagnosis—like a follow-up colonoscopy—may fall under diagnostic services, which can lead to cost-sharing.

Dental and Vision Coverage Still Requires FEDVIP

A major misconception about PSHB is that it automatically includes dental and vision coverage. It does not.

If you want:

  • Preventive or restorative dental care

  • Routine eye exams, lenses, or frames

…you must enroll separately in a FEDVIP (Federal Employees Dental and Vision Insurance Program) plan. These plans are available to USPS retirees, but you pay separate premiums, and coverage levels vary widely.

High-Deductible Plans Offer Savings—But with Tradeoffs

Some PSHB plans in 2025 are high-deductible health plans (HDHPs) paired with Health Savings Accounts (HSAs). These can be appealing for their lower premiums and tax advantages. However, consider the tradeoffs:

  • Deductibles may range from $1,650 (Self Only) to $3,300 (Self and Family)

  • You pay the full cost of most services until the deductible is met

  • Prescription drugs and even primary care visits may not be covered upfront

HDHPs are best suited for those who don’t anticipate frequent healthcare needs, but that’s not always the case in retirement.

Not All Plans Offer Equal Medicare Wraparound Benefits

One of PSHB’s goals is to integrate well with Medicare Part A and B. Some plans do this better than others. For example, certain plans:

  • Waive cost-sharing when you’re enrolled in both PSHB and Medicare Part B

  • Reimburse some or all of your Part B premiums

  • Offer enhanced benefits that only apply if Medicare is your primary payer

Other plans offer minimal coordination. If you choose a plan that doesn’t align well with Medicare, you may pay more than necessary—or lose out on helpful reimbursements.

FEHB-Like Mental Health Benefits May Be Limited

While PSHB plans resemble former FEHB plans, behavioral health services are not always equal. Limitations include:

  • Restrictions on number of therapy sessions per year

  • Limited telehealth options or out-of-network provider availability

  • Preauthorization requirements for inpatient care

Given the growing importance of mental health services in retirement, this is an area where plan comparison is essential.

Urgent and Emergency Services May Carry Surprises

Urgent care and emergency room visits under PSHB plans come with standard copayments—often $50 to $150—but hidden variables may raise your actual cost:

  • You may be charged higher rates if seen at a non-network facility

  • Emergency admissions can trigger separate hospital copays or coinsurance

  • Some plans require notification within 48 hours of an ER visit to continue coverage

Understanding how each plan handles emergencies can help avoid surprise bills when you’re most vulnerable.

Coverage for Long-Term and Custodial Care Is Limited

Long-term care, nursing home stays, and custodial care are rarely covered comprehensively under PSHB. Most plans:

  • Exclude custodial care altogether

  • Only cover skilled nursing facility stays for limited periods (usually up to 100 days)

  • Require prior hospitalization to qualify for skilled care

This gap can leave you exposed to substantial out-of-pocket costs in the event of serious, chronic illness or disability. Long-term care insurance, if desired, must be purchased separately.

Be Aware of Annual Changes and Plan Notifications

Each year, PSHB plans issue an Annual Notice of Change (ANOC). This document outlines modifications to premiums, benefits, provider networks, and cost-sharing. These changes go into effect on January 1 following the fall Open Season.

Failing to review this notice can mean missing out on changes such as:

  • Increased copayments or deductibles

  • Provider network adjustments

  • New prior authorization requirements

Make it a habit to review these documents thoroughly every fall.

Choose with Clarity, Not Just Comfort

Choosing a PSHB plan is not just about sticking with what’s familiar—it’s about selecting the plan that suits your current and future healthcare needs. With many USPS retirees relying on fixed incomes and Medicare integration, it’s more important than ever to:

  • Understand the limitations behind the benefits

  • Review how your plan works with Medicare

  • Know the rules around out-of-network care and drug coverage

Make Your PSHB Coverage Work Smarter for You

Hidden restrictions, gaps, and coordination complexities can quietly undercut the benefits you believe you’re getting with PSHB. By taking the time to review your plan’s documentation, comparing your options annually, and understanding what’s excluded or limited, you can avoid unexpected expenses in retirement.

For a personalized evaluation of your current PSHB plan and Medicare eligibility, speak to a licensed agent listed on this website. They can help ensure you’re not leaving money—or coverage—on the table.