Key Takeaways

• Even though Medicare Part D now includes a $2,000 cap on out-of-pocket drug costs in 2025, it still doesn’t mean every drug is covered the same across all plans. The details of coverage can vary widely.

• As a Postal Service Health Benefits (PSHB) enrollee, you are automatically enrolled in an integrated Medicare Part D plan once eligible, but it remains critical to review the formulary, pharmacy network, and cost-sharing of your specific plan to avoid costly surprises.

Medicare Part D in 2025: A Better Landscape, But Not a Perfect One

The prescription drug coverage landscape under Medicare Part D has improved significantly in 2025. One of the most notable changes is the implementation of a $2,000 annual cap on out-of-pocket prescription drug costs. This is a major relief for many, especially those with chronic conditions who require high-cost medications. But it does not make all Part D plans equal, and it does not eliminate the need to compare plan details.

As a Postal Service Health Benefits enrollee, your PSHB plan includes integrated Part D coverage once you are eligible for Medicare. While this structure simplifies access, it doesn’t guarantee identical experiences across different PSHB options. The drugs covered, how they are tiered, and the associated costs may still differ.

Understanding the Phases of Medicare Part D in 2025

In 2025, Medicare Part D consists of three cost phases:

• Deductible Phase: You are responsible for 100% of drug costs until you meet the deductible, which can be as high as $590.

• Initial Coverage Phase: After the deductible, you pay a portion of the drug cost (typically a copayment or coinsurance), and your plan covers the rest.

• Catastrophic Coverage Phase: Once your total out-of-pocket costs reach $2,000, your plan covers 100% of your covered drug costs for the remainder of the year.

This structure significantly benefits those with high drug expenses. However, the path to reaching the $2,000 cap still involves paying attention to plan differences.

Not All Formularies Are Alike

The formulary is the list of drugs covered by a Part D plan. Under PSHB, even though drug coverage is provided through an integrated Medicare Part D plan, formularies can vary from one plan to another.

When comparing plans, consider the following:

• Is your medication on the formulary? If not, you may have to request a formulary exception or pay the full cost.

• Which tier is your medication in? Drugs are grouped into tiers that affect your copay or coinsurance.

• Are there utilization management requirements? This includes step therapy, prior authorization, or quantity limits.

It is crucial to review the plan’s formulary annually during the Open Season or any qualifying life event period.

Copayments and Coinsurance Still Vary

Even with the $2,000 out-of-pocket maximum, the cost-sharing you experience before hitting that cap can differ:

• Generic drugs typically have lower copays, especially when filled at preferred pharmacies.

• Brand-name and specialty drugs often involve higher coinsurance rates.

• Some plans may offer tiered copayment structures, where preferred brands or mail-order services cost less.

The point is this: two plans can have identical out-of-pocket caps but drastically different out-of-pocket journeys to reach that cap.

Pharmacy Network and Access Differences

Not all PSHB-integrated Part D plans use the same pharmacy networks. This can impact where you get your prescriptions and what you pay:

• Preferred vs. standard pharmacies: Plans often offer lower cost-sharing at preferred locations.

• Mail-order availability: Some plans provide incentives for 90-day supplies through mail order.

• National vs. regional networks: If you travel or relocate seasonally, a plan with a broader network may serve you better.

Using an out-of-network pharmacy could mean higher costs or no coverage at all. Always confirm whether your preferred pharmacy is within the plan’s network.

Drug Tier Changes Can Happen Annually

PSHB enrollees receive an Annual Notice of Change (ANOC) each fall, and this document often includes formulary updates. Your medication might:

• Move to a higher tier, increasing your costs

• Be removed entirely, requiring substitution or prior authorization

You should never assume that coverage remains static from year to year. Comparing plan options during each Open Season ensures that you’re not caught off guard in January.

The Medicare Prescription Payment Plan: A New Option to Consider

Starting in 2025, a new program allows you to spread your out-of-pocket drug expenses over 12 monthly payments. This Medicare Prescription Payment Plan (MPPP) offers budget flexibility but is not automatically applied. If you’re concerned about managing large upfront prescription costs, this could be a worthwhile option.

As a PSHB enrollee, you must confirm whether your plan participates in MPPP and whether the administrative process meets your needs. Remember, enrolling in MPPP doesn’t change your actual out-of-pocket maximum, but it can help smooth the cash flow over the year.

Cost Sharing After Reaching the $2,000 Limit

Once you hit the $2,000 cap in out-of-pocket costs for covered drugs in 2025, you pay nothing further for covered prescriptions for the rest of the year. However, this only applies to:

• Covered medications on the plan formulary

• Drugs filled at network pharmacies

• Quantities and frequencies allowed by the plan’s rules

If you use medications that aren’t on the formulary or go outside network rules, those costs won’t count toward the cap, and you’ll remain responsible for them. Always ensure your prescriptions comply with your plan’s rules.

Drugs Not Covered by Part D Plans

Some categories of drugs are not covered by Medicare Part D plans at all, even under PSHB. These typically include:

• Drugs for weight loss or cosmetic purposes

• Fertility drugs

• Over-the-counter medications

• Certain vitamins and minerals

You may be able to get these medications covered through other parts of your PSHB plan, but they are not counted toward your Part D out-of-pocket cap. Be sure to ask about alternative coverage options for these drugs.

Special Needs and Chronic Conditions Require Extra Planning

If you have a chronic condition like diabetes, heart disease, or rheumatoid arthritis, your drug needs may be extensive. Choosing the right plan involves:

• Verifying that all needed medications are on the formulary

• Reviewing tier placements

• Understanding any quantity or utilization restrictions

Even small gaps in coverage can result in significant costs over time, especially if medications fall into higher cost-sharing tiers.

Reevaluate Your Plan Every Year

Even if you’re satisfied with your current plan, it’s good practice to reevaluate it every Open Season (typically November to December). Plan changes that may affect your decision include:

• Premium adjustments (even though your premiums may be partially subsidized under PSHB)

• Formulary updates

• Changes in tier structure or cost-sharing

• Network pharmacy changes

If you’re newly eligible for Medicare, you’ll have a one-time Initial Enrollment Period and a Special Enrollment Period for enrolling in Medicare Part B (required for PSHB Part D integration). But even after enrollment, reviewing your options annually ensures you stay covered efficiently.

What PSHB Enrollees Should Prioritize

As a Postal Service Health Benefits enrollee, here’s how you can ensure you’re making the most of your Part D drug coverage:

• Review the Annual Notice of Change from your current plan carefully.

• Check whether your drugs are still on the formulary and their tier status.

• Use preferred pharmacies to keep out-of-pocket costs lower.

• Look into MPPP if large upfront costs are a concern.

• Compare plan documents during Open Season, even if you plan to stay in the same plan.

The PSHB program does a good job integrating with Medicare Part D, but it’s up to you to confirm that the details of your plan match your prescription needs.

Comparing Plans Is Still a Must in 2025

While 2025 brings big improvements in how Medicare Part D works for PSHB enrollees, it doesn’t erase the need to look at plan-level specifics. From formulary lists to pharmacy networks, every detail plays a role in what you pay and what you receive.

To make confident choices, get in touch with a licensed agent listed on this website who can walk you through plan comparisons based on your prescriptions and preferences. Don’t rely on assumptions when it comes to something as critical as your medication coverage.