Key Takeaways

• Enrolling in Medicare Part B in 2025 can significantly reduce your out-of-pocket healthcare costs under the Postal Service Health Benefits (PSHB) Program.

• Many PSHB plans now offer enhanced benefits—such as waived deductibles and reduced copayments—when you combine your plan with Medicare Part B.

Why Medicare Part B Still Matters Under PSHB

If you’re a Postal Service retiree or an eligible annuitant, you might wonder whether enrolling in Medicare Part B is necessary when you’re already covered under a PSHB plan. After all, you’ve paid into your health benefits throughout your career—shouldn’t that be enough?

In 2025, the answer is increasingly no. While PSHB plans offer solid coverage, they are now designed to coordinate with Medicare Part B for Medicare-eligible enrollees. Not enrolling in Part B can leave you exposed to higher out-of-pocket costs and fewer plan advantages.

What Medicare Part B Covers—and Why It Complements PSHB

Medicare Part B covers medically necessary services such as:

• Doctor visits and outpatient care

• Durable medical equipment

• Preventive services

• Home health care

By enrolling in Part B, you allow Medicare to become your primary insurer for these services. PSHB then acts as your secondary payer, covering what Medicare doesn’t—often at a lower cost to you. When you skip Part B, PSHB becomes your primary insurer, which could lead to higher cost-sharing responsibilities.

PSHB Incentives That Only Activate With Part B

In 2025, many PSHB plans include extra benefits that are only triggered when you enroll in Medicare Part B. These include:

• Waived or reduced deductibles

• Lower coinsurance and copayments

• Expanded coverage for certain services

• Prescription drug savings via integrated Part D EGWP plans

These benefits aren’t available to enrollees who opt out of Part B. You may still have coverage, but it won’t be as financially efficient or robust.

Financial Risk of Skipping Part B in 2025

The standard monthly premium for Medicare Part B in 2025 is $185. While this might seem like an extra cost, the money you save through PSHB incentives often outweighs the premium. Consider:

• Deductibles: Some PSHB plans waive your medical deductible entirely when you have Part B.

• Cost-sharing: You may pay just 5%–10% of the cost for services instead of 20%–30% without Medicare.

• Drug costs: Once your out-of-pocket drug costs hit the $2,000 cap, you pay nothing more for covered medications for the rest of the year.

By contrast, if you don’t enroll in Part B and your PSHB plan serves as your only coverage, your expenses can add up quickly.

Coordination of Benefits: Who Pays First?

Once you’re enrolled in both Medicare and PSHB, Medicare generally becomes the primary payer for retirees. That means:

• Medicare pays first for eligible services

• Your PSHB plan pays secondary

This coordination lowers your total liability. Without Part B, your PSHB plan assumes the full cost burden, which may result in less coverage and more out-of-pocket expenses for you.

How Part D Benefits Change With Part B Enrollment

Another benefit of enrolling in Part B under PSHB is automatic access to an Employer Group Waiver Plan (EGWP) for prescription drugs, built on Medicare Part D. The 2025 features of this EGWP include:

• A $2,000 annual out-of-pocket cap on covered prescription medications

• A $35 monthly insulin cap

• Access to a broader network of pharmacies

• No coverage gap (donut hole)

However, this Part D integration is only available if you are enrolled in Medicare Part B. If you decline Part B, your PSHB drug coverage becomes more limited and potentially more expensive.

Enrollment Timing Matters

To avoid penalties and gaps in coverage, it’s critical to enroll in Medicare Part B during the right time:

• Initial Enrollment Period (IEP): Starts 3 months before your 65th birthday, includes your birthday month, and ends 3 months after.

• Special Enrollment Period (SEP): For USPS retirees who became Medicare-eligible before 2025 and were exempt from Part B—SEP may still be available if eligibility rules change.

• General Enrollment Period (GEP): January 1 to March 31 each year, with coverage starting July 1—but this may involve late penalties.

In most cases, delaying enrollment in Part B beyond your initial eligibility could result in a 10% late enrollment penalty for every 12 months you delay, unless you qualify for an exception.

Who Must Enroll in Part B to Keep PSHB in 2025

Not everyone has to enroll in Part B to maintain PSHB coverage, but many do. If you’re a Postal Service retiree or annuitant, you’re required to enroll in Part B to maintain PSHB drug coverage unless you fall into an exception group:

• Retired on or before January 1, 2025

• Age 64 or older as of January 1, 2025

• Living outside the U.S.

• Eligible for Indian Health Services or VA coverage

If none of these apply, you must enroll in Medicare Part B to retain your full PSHB benefits.

What Happens If You Don’t Enroll

If you’re required to enroll in Part B and don’t:

• Your PSHB plan may terminate your drug coverage

• You won’t be eligible for cost-sharing reductions

• You’ll be responsible for higher deductibles and coinsurance

In some cases, failing to enroll can even lead to a complete loss of eligibility for certain PSHB benefits.

Why Your Retirement Budget Benefits From Part B

When viewed through the lens of total annual health costs, Medicare Part B often brings more value than its monthly premium suggests. Consider the following 2025 numbers:

• Part B premium: $185 per month

• Hospital deductible under Medicare Part A: $1,676

• Medical deductible under Part B: $257

• PSHB plan deductibles without Medicare: $600–$1,500 depending on the plan

• PSHB plan copayments without Medicare: Up to $150 per ER visit and 30% coinsurance on many services

With Medicare as your primary payer, PSHB picks up the difference—giving you lower overall spending.

Medicare and PSHB Work Better Together

Medicare Part B isn’t just a standalone program—it’s the piece that makes your PSHB plan work smarter. It reduces your financial exposure, enhances your benefits, and ensures your prescription drug coverage stays intact in 2025.

Think of it as a strategic investment in your health, not just another monthly bill. Many retirees who integrate both programs report higher satisfaction and fewer surprise costs throughout the year.

What You Should Do Next

If you’re approaching Medicare eligibility or already eligible, now is the time to:

• Review your current PSHB plan

• Check if you’re required to enroll in Part B to maintain coverage

• Compare the benefits your PSHB plan offers when paired with Medicare

• Consider future healthcare needs and budget impact

Failing to act in time can mean missed benefits, penalties, and more stress later.

Make the Smart Move While Enrollment Windows Are Open

PSHB plans in 2025 are structured to reward those who coordinate with Medicare. The incentives are real, the coverage is stronger, and the risks of skipping Part B are too significant to ignore.

Take action now. Review your eligibility, assess your plan’s coordination features, and enroll in Part B during the appropriate window. Doing so could dramatically improve your healthcare experience.

More Benefits Start With One Decision

Combining your PSHB plan with Medicare Part B isn’t just about avoiding penalties—it’s about unlocking an enhanced level of care and cost protection. You deserve to get the most from your earned benefits.

If you’re unsure how Part B enrollment affects your PSHB plan, get in touch with a licensed agent listed on this website. They can walk you through your specific options and help ensure you make a decision that protects your health and your wallet.