Key Takeaways

• If you’re a Postal Service retiree or employee nearing retirement in 2025, understanding how PSHB and Medicare work together (or independently) is crucial to making smart coverage and cost decisions.

• Medicare may offer broader nationwide access, but PSHB plans often include rich benefits when paired with Medicare Part B—especially if you qualify for premium reimbursements.

What You Need to Know About PSHB in 2025

Starting January 1, 2025, the new Postal Service Health Benefits (PSHB) Program officially replaces FEHB for Postal retirees and employees. If you’re still working for USPS or you’ve retired, this change directly affects you.

Here’s what stands out:

• PSHB is only for Postal workers and annuitants.

• If you’re already enrolled in FEHB, you were automatically transitioned into a similar PSHB plan unless you chose differently during Open Season (November to December 2024).

• Most Medicare-eligible annuitants must enroll in Medicare Part B to keep their PSHB coverage.

That last point is especially important: if you’re turning 65 or are already there, skipping Medicare Part B could mean losing PSHB entirely unless you meet specific exemption criteria.

Breaking Down Medicare in 2025

Medicare is federal health insurance, available to most people once they turn 65. It’s broken into parts:

• Part A (Hospital Insurance): Free for most, covers inpatient care.

• Part B (Medical Insurance): Covers doctor visits, outpatient care, and durable medical equipment. Premiums apply.

• Part D (Drug Coverage): Optional but necessary if you want prescription drug benefits. Also comes with premiums and deductibles.

• Medicare Advantage (Part C): A bundle of A, B, and usually D, offered by private companies.

Postal retirees are most commonly looking at Original Medicare (Parts A and B), often paired with PSHB.

How the Two Work Together

Pairing PSHB with Medicare can be a game-changer for your out-of-pocket costs, but only if you enroll properly.

Once you enroll in Medicare Part A and Part B:

• Many PSHB plans coordinate benefits to reduce deductibles, coinsurance, and copays.

• Some plans even waive cost-sharing entirely if you’re enrolled in Medicare.

• Prescription drug coverage is often handled through an EGWP (Employer Group Waiver Plan), which aligns with Medicare Part D rules.

This combo can offer near-comprehensive coverage—but the key is proper enrollment.

Which Costs More: PSHB or Medicare?

Costs depend on your situation and choices. Let’s break it down.

PSHB Costs in 2025

• Premiums are split between you and the government, with USPS covering about 70%.

• If you’re a retiree, your portion depends on your chosen plan and coverage type (Self Only, Self Plus One, or Self and Family).

• Out-of-pocket costs (deductibles, coinsurance, copays) vary by plan.

Medicare Costs in 2025

• Part A is usually free if you worked 10+ years.

• Part B standard premium is $185 per month, with an annual deductible of $257.

• Part D has an average premium of around $46.50, with a deductible up to $590.

• There’s now a $2,000 cap on out-of-pocket drug costs under Part D, offering new financial relief.

Combined with a PSHB plan, Medicare Part B might seem like an added cost—but many plans offset this by reducing your cost-sharing or offering premium reimbursement.

Who Has to Enroll in Medicare Part B?

In 2025, Medicare Part B enrollment is required to keep PSHB coverage if:

• You’re a Postal retiree eligible for Medicare.

• Your covered family member is Medicare-eligible.

There are only a few exceptions:

• You retired on or before January 1, 2025 and aren’t currently enrolled in Part B.

• You’re a family member covered under another federal employee’s plan.

If you don’t qualify for an exception and you skip Part B, your PSHB coverage will be terminated.

How Coverage Compares

Here’s a quick look at how PSHB and Medicare measure up:

Access to Providers

• PSHB: Strong national networks, but plan-specific.

• Medicare: Nearly universal access to any provider who accepts Medicare.

Prescription Coverage

• PSHB: Usually generous, especially with EGWP integration.

• Medicare Part D: Recently improved with out-of-pocket caps.

Coordination of Benefits

• When you have both, PSHB becomes secondary and pays what Medicare doesn’t.

• This can result in zero out-of-pocket costs for certain services.

Out-of-Pocket Spending

• Medicare alone may result in higher costs unless you buy supplemental insurance.

• PSHB paired with Medicare often reduces or eliminates many out-of-pocket expenses.

What If You’re Still Working?

If you’re an active USPS employee in 2025 and turning 65:

• You can delay Part B without penalty as long as you’re still working and have PSHB.

• Once you retire, you’ll have a Special Enrollment Period (SEP) to sign up for Part B without late penalties.

It’s smart to coordinate this timing carefully. Enrolling too early could mean paying for coverage you don’t need yet. Enrolling too late could mean losing access.

What Retirees Should Watch Out For

There are a few pitfalls to avoid:

• Missing the Part B enrollment deadline. Most retirees only have 8 months after retirement to sign up without penalty if they delayed.

• Assuming PSHB alone is enough. In 2025, Medicare Part B is often required.

• Overpaying for duplicate coverage. Once you pair PSHB with Medicare, look into your plan’s coordination—some costs may no longer apply.

Making the Right Choice for Your Health and Wallet

Here’s how you can make a decision that works for you:

1. Confirm your eligibility for Medicare and whether you’re required to enroll in Part B.

2. Review your PSHB plan’s brochure to see how it coordinates with Medicare.

3. Consider your healthcare needs. Frequent specialist visits or prescriptions? Pairing PSHB with Medicare might save you a lot.

4. Talk to a licensed agent for help understanding the math and your specific options.

Timing Is Everything

In 2025, these are the enrollment periods to watch:

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

• General Enrollment Period (GEP): Jan 1 to Mar 31 if you missed your IEP.

• Special Enrollment Period (SEP): Available if you delayed Part B because you were still working.

• PSHB Open Season: November to December each year.

Missing deadlines can result in late penalties or loss of coverage. Mark your calendar.

Why 2025 Is a Turning Point for Postal Retirees

This is the first year PSHB stands on its own. Medicare and PSHB are now officially linked for many Postal retirees. You no longer have the luxury of keeping FEHB without Part B if you’re eligible.

This means your coverage decisions are more intertwined than ever. But the good news? If you plan wisely, you could get enhanced benefits and serious cost savings.

It All Comes Down to Coordination

If you’re already enrolled in Medicare or about to turn 65, pairing it with your PSHB plan can give you comprehensive coverage that’s hard to beat.

You’ll likely see reduced copays, waived deductibles, and stronger prescription drug protection. But if you ignore the Medicare Part B requirement, you could be left without PSHB at all.

Ready to Make the Most of Your Postal Retirement Benefits?

Understanding the 2025 PSHB and Medicare landscape is essential if you’re a USPS employee or retiree. Whether you’re planning for the future or reviewing your current coverage, the right strategy can mean better care and bigger savings.

Get in touch with a licensed agent listed on this website for help choosing the right plan combination for your retirement needs.