Key Takeaways

• Many Postal Service retirees are enrolling in Medicare as soon as they become eligible at age 65 to take full advantage of PSHB integration benefits starting in 2025.

• Failing to enroll in Medicare Part B when required could lead to loss of important PSHB benefits, especially prescription drug coverage.

Why This Shift Toward Earlier Medicare Enrollment Is Happening

If you’ve recently retired or are approaching retirement, you might be wondering whether signing up for Medicare at age 65 is really necessary—especially if you’re already covered under your PSHB plan. But in 2025, that question has become more than just a matter of preference. It’s now about protecting your access to critical benefits and avoiding penalties that weren’t a concern just a year ago.

Beginning January 1, 2025, the Postal Service Health Benefits (PSHB) Program fully replaces FEHB for Postal retirees. And with this change comes a significant shift in how Medicare and your health benefits work together. In short: Medicare is no longer optional.

The PSHB-Medicare Connection in 2025

Under the 2025 PSHB structure, Medicare Part B enrollment is mandatory for most annuitants and eligible family members aged 65 or older. Unless you meet specific exemption criteria, declining Part B can limit your access to PSHB medical benefits—and eliminate your drug coverage entirely.

Here’s how it works:

• If you’re eligible for Medicare Part A and Part B, and you don’t enroll in Part B, your PSHB plan may not cover many of your services.

• Your plan’s prescription drug benefit is now tied to Medicare Part D through an Employer Group Waiver Plan (EGWP). You only receive this drug coverage if you are enrolled in both Medicare Parts A and B.

• Opting out of Medicare could mean losing that drug coverage altogether.

This integration is designed to align with Medicare and reduce costs for both the Postal Service and enrollees. But for you, the retiree, it means one thing: delaying Medicare no longer makes financial or medical sense.

Who Is Required to Enroll in Medicare Part B?

You must enroll in Medicare Part B if:

• You are a Postal Service annuitant or covered family member and become eligible for Medicare on or after January 1, 2025.

• You were under age 64 as of January 1, 2025, and are now aging into Medicare.

There are exceptions. You don’t have to enroll in Part B if:

• You retired on or before January 1, 2025.

• You were 64 or older as of January 1, 2025.

• You reside outside the U.S.

• You are enrolled in Indian Health Services or Veterans Health Administration benefits.

But if you don’t fall into one of these categories, enrolling in Medicare Part B is now part of staying fully covered under your PSHB plan.

The Timing Matters: Why You Shouldn’t Wait Past 65

Medicare enrollment starts with your Initial Enrollment Period (IEP), which lasts for seven months:

• Three months before your 65th birthday,

• The month you turn 65,

• Three months after your birthday month.

Failing to enroll during this window can lead to serious consequences:

• A permanent late enrollment penalty for Medicare Part B, which increases the longer you delay.

• Gaps in your PSHB medical and prescription coverage.

• Potential out-of-pocket costs that could have been covered had you enrolled on time.

The 2025 PSHB rules make it especially important not to miss this window. The days of choosing to delay Medicare because your FEHB plan still worked well enough are over.

Why More Retirees Are Choosing Early Enrollment

The incentive to enroll in Medicare at 65 has become stronger than ever. Even if you are still relatively healthy and don’t expect to use much healthcare, early enrollment comes with advantages in 2025:

• Full integration with PSHB: You unlock enhanced coordination between Medicare and your PSHB plan, often reducing your out-of-pocket costs for services like inpatient stays, doctor visits, and diagnostics.

• Prescription drug protection: Medicare Part D through PSHB’s EGWP arrangement requires Part B enrollment. Without it, you lose access to this comprehensive drug benefit.

• Avoidance of future penalties: The Part B penalty is permanent and accumulates over time. Enrolling at age 65 is the cleanest, most cost-effective option.

What Happens If You Don’t Enroll?

Skipping Medicare Part B enrollment might seem like a money-saver now, but it comes with long-term financial and medical risk:

• You may have to wait until the General Enrollment Period (January 1 – March 31) to sign up, with coverage only beginning in July.

• Your PSHB plan may deny payment for services Medicare would have covered.

• You will lose your prescription drug benefits through the plan.

• You may face higher medical expenses and prescription costs for the rest of the year.

This is especially significant in 2025 when out-of-pocket medical costs are climbing, and plans are becoming more dependent on Medicare to carry the cost burden.

What About Spouses and Family Members?

The PSHB Medicare requirement also extends to covered family members of retirees. If your spouse or dependent is Medicare-eligible, they must also enroll in Part B to continue full PSHB coverage. Their eligibility is assessed under the same timeline and exemption rules.

If they fail to enroll:

• They may lose access to PSHB prescription drug coverage.

• They may experience coordination problems between Medicare and PSHB, potentially leading to denied claims or duplicate bills.

Being proactive is key. Don’t assume your spouse’s enrollment is automatic. Everyone must actively enroll when eligible.

Key Benefits of Coordinating PSHB with Medicare

When you’re enrolled in both PSHB and Medicare Parts A and B, the benefits work together in powerful ways:

• Reduced cost-sharing: Medicare pays first, and your PSHB plan often picks up the rest, minimizing your copayments and coinsurance.

• Broader provider access: You can often see any provider that accepts Medicare, without network limitations.

• Waived deductibles: Many PSHB plans waive or reduce deductibles for Medicare-enrolled members.

• Enhanced drug coverage: With EGWP, you gain a strong Part D benefit integrated into your PSHB plan.

These advantages aren’t theoretical—they’re built into the structure of the PSHB-Medicare model as of 2025.

Common Misconceptions That Could Cost You

You may have heard some misinformation around Medicare and PSHB. Let’s clear up a few common myths:

• “I can enroll in Medicare later if I need it.” That might have been true under FEHB. But under PSHB, delaying could cost you your drug coverage.

• “I’m healthy, so I don’t need Medicare yet.” Even if you rarely visit a doctor, the integration with Medicare means your PSHB coverage depends on you being enrolled.

• “My PSHB plan is good enough on its own.” Not anymore. The PSHB structure now requires Medicare Part B to access its full benefits.

Ignoring these changes can lead to avoidable penalties and gaps in coverage.

Planning Ahead: What to Do Before You Turn 65

Here’s a checklist to keep you ahead of the curve:

• Mark your Medicare Initial Enrollment Period on your calendar.

• Use the Medicare website or call Social Security to start your application.

• Verify your PSHB plan’s Medicare coordination details.

• Make sure your spouse or dependent’s enrollment is also scheduled.

• Contact a licensed agent listed on this website if you have questions or need help reviewing your coverage.

Proactive planning will ensure you don’t lose any benefits you’ve earned over years of service.

Protecting Your Benefits Starts with One Simple Step

If you’re part of the Postal Service family, 2025 has changed the playbook. Medicare is now deeply embedded in how your PSHB plan works—and ignoring it could jeopardize the coverage you count on.

Enrolling in Medicare Part B at age 65 isn’t just about checking a box. It’s about protecting your PSHB coverage, safeguarding access to essential prescriptions, and preventing long-term penalties. The stakes are simply too high to wait.

If you’re unsure about your eligibility, deadlines, or enrollment process, now is the time to get answers. Reach out to a licensed agent listed on this website for one-on-one guidance tailored to your situation.