Key Takeaways

• Pairing your Postal Service Health Benefits (PSHB) plan with Medicare in 2025 can lower your overall healthcare expenses, but it doesn’t eliminate all out-of-pocket costs.

• Understanding how PSHB coordinates with Medicare is crucial to avoid unexpected charges, especially for services like specialist visits, prescriptions, and hospital stays.

Why Combining PSHB and Medicare Is a Common Choice in 2025

As a postal retiree or worker in 2025, you are facing a new era in healthcare with the Postal Service Health Benefits (PSHB) Program. One of the biggest decisions you face is how to coordinate PSHB coverage with Medicare. On the surface, combining the two seems like the perfect solution to minimize your healthcare expenses. However, it is important to recognize that while this combination can substantially reduce many costs, it doesn’t eliminate them entirely.

In this environment, Medicare serves as your primary insurance and your PSHB plan generally acts as secondary coverage, helping to pick up costs that Medicare leaves behind. But there are gaps, conditions, and limitations you need to be aware of.

How Primary and Secondary Coverage Work Together

When you are enrolled in both Medicare Parts A and B and a PSHB plan, Medicare becomes your primary payer. Here’s what typically happens:

• Medicare pays its share first for your healthcare services.

• Your PSHB plan then covers some or all of the remaining balance, depending on the specific service and plan details.

In theory, this layering can significantly lower what you owe. But in practice, there are services where gaps remain or where coordination might not cover everything.

The Types of Out-of-Pocket Costs You May Still Face

Even after stacking PSHB on top of Medicare, several costs can still come out of your pocket:

• Deductibles: Medicare Part A and Part B have their own deductibles you must meet. Some PSHB plans may cover these, but not always.

• Coinsurance: After Medicare pays its portion, you might still owe a percentage of the bill, depending on your PSHB plan.

• Copayments: Routine services such as doctor visits and prescriptions might still require modest copays under your PSHB coverage.

• Non-covered services: Some treatments, especially dental, hearing, and vision services, might not be fully covered under either program.

Understanding these categories now can help you plan your healthcare expenses better.

1. Hospital Costs

In 2025, Medicare Part A covers inpatient hospital care after you pay the $1,676 deductible per benefit period. Your PSHB plan may step in to cover some or all of what remains, like daily coinsurance amounts after the first 60 days of hospitalization. However, for longer stays or specialized care facilities, you may still face substantial costs.

Additionally, if a facility is out-of-network for your PSHB plan, you might owe higher amounts even if Medicare covered part of it.

2. Doctor and Specialist Visits

Medicare Part B covers 80% of approved charges after you meet the $257 annual deductible in 2025. Your PSHB plan often covers some or all of the remaining 20%, depending on whether your provider is in-network.

However, not all plans automatically cover the entire 20%, especially if you see providers outside of your PSHB plan’s network. You could still receive balance bills if you are not careful about verifying network participation.

3. Prescription Drug Costs

Prescription drug coverage operates differently. If you are Medicare-eligible under PSHB in 2025, your prescription benefits are integrated with Medicare Part D through an Employer Group Waiver Plan (EGWP).

While this structure offers strong protections, such as a $2,000 out-of-pocket maximum on drug costs, you will still face:

• Copayments or coinsurance for many medications.

• Potential higher costs for non-preferred brand-name or specialty drugs.

• Formularies (drug lists) that limit which medications are fully covered.

It is essential to review your plan’s formulary each year during Open Season to understand what your medication costs might be.

4. Skilled Nursing and Rehabilitation

Medicare covers the first 20 days of a skilled nursing facility stay in full, but from days 21-100, you owe a coinsurance of $209.50 per day in 2025. Some PSHB plans will help pay this coinsurance; others may cover only part of it.

If your care extends beyond 100 days, Medicare coverage ends altogether, and you may have to rely fully on your PSHB plan—or pay out-of-pocket.

5. Outpatient Services and Procedures

Services such as outpatient surgeries, imaging tests (like MRIs and CT scans), and lab work often involve separate charges for facility fees and professional services. Medicare generally covers 80% of approved amounts.

Your PSHB plan can cover much of the balance, but you still might owe:

• An outpatient procedure copay.

• A facility fee copay.

• Additional coinsurance, especially if using an out-of-network provider.

Always check your PSHB plan’s rules for outpatient services to know exactly what to expect.

Important Timelines to Know in 2025

Being aware of the key dates and durations will help you manage costs proactively:

• Medicare Open Enrollment: October 15 to December 7, 2025, to make changes to your Medicare coverage.

• PSHB Open Season: November to December 2025, for making adjustments to your PSHB plan.

• Annual Mid-Year Notification: Between June 30 and July 31, 2025, PSHB Medicare enrollees receive notices about unused supplemental benefits, helping you maximize your entitlements.

Missing these windows can lock you into higher out-of-pocket costs for the upcoming year.

Hidden Costs You Might Not Be Expecting

Combining PSHB with Medicare helps a lot, but it doesn’t shield you from:

• Foreign travel emergency costs: Medicare typically does not cover care outside the U.S. Some PSHB plans offer limited international coverage, but limits apply.

• Alternative therapies: Services like acupuncture or chiropractic care are often partially or completely excluded.

• Long-term custodial care: Neither Medicare nor PSHB generally covers long-term stays in assisted living facilities or nursing homes beyond rehabilitation periods.

• Durable Medical Equipment (DME): Items like wheelchairs and oxygen equipment may involve significant coinsurance, even after both Medicare and PSHB contributions.

Budgeting for these unexpected needs is a smart move to avoid financial strain.

Strategies to Control Out-of-Pocket Costs

There are several practical steps you can take to lower your costs:

• Stay in-network: Always choose providers that are part of your PSHB plan’s network.

• Use preferred pharmacies: Many PSHB plans partnered with Medicare Part D EGWP programs offer better pricing at certain pharmacies.

• Maximize preventive care: Annual wellness visits, vaccines, and screenings are often fully covered with no out-of-pocket cost.

• Review annual notices carefully: Changes in your plan’s drug formulary or provider network can mean higher expenses if you don’t adapt.

• Take advantage of supplemental benefits: Look for dental, vision, and hearing services offered by your PSHB plan that Medicare doesn’t cover.

Why Careful Planning Matters More Than Ever

In 2025, the healthcare landscape for postal retirees and workers has more moving parts than ever. Your costs will largely depend on how closely you align your healthcare usage with what Medicare and your PSHB plan collectively offer.

Taking the time each year to:

• Reassess your healthcare needs,

• Compare PSHB plans,

• Review Medicare Part D coverage changes,

can save you hundreds or even thousands of dollars over the course of the year.

Your Next Steps for Smarter Coverage Choices

Pairing Medicare with PSHB in 2025 can be a powerful way to control your healthcare spending—but it takes attention, planning, and sometimes a little help to get it right. If you have questions or want help understanding which PSHB plans pair most effectively with your Medicare benefits, get in touch with a licensed insurance agent listed on this website today.