Key Takeaways

• If you’re Medicare-eligible and don’t enroll in Part B, your Postal Service Health Benefits (PSHB) plan may not cover you in 2025 and beyond.

• While Part B premiums may seem costly, not enrolling could result in losing access to your PSHB plan’s benefits, leaving you with limited health coverage.

Understanding the Link Between PSHB and Medicare Part B

As of 2025, the PSHB Program requires most Medicare-eligible annuitants and family members to be enrolled in Medicare Part B in order to maintain full coverage. This new coordination between PSHB and Medicare reflects a major shift from the previous FEHB system, where enrolling in Part B was optional.

The 2025 PSHB structure is built to work in tandem with Medicare, particularly Parts A and B. If you’re eligible for Medicare and choose not to enroll in Part B, your PSHB plan may reduce or even deny benefits related to certain medical services, including outpatient care, physician visits, and diagnostic testing. This is no longer a matter of preference—it’s a requirement for most.

Who Must Enroll in Medicare Part B?

Enrollment in Medicare Part B is now required for most Medicare-eligible annuitants and their covered family members. However, certain exemptions apply:

• If you retired on or before January 1, 2025, and you are not currently enrolled in Medicare Part B, you are not required to enroll now to maintain PSHB coverage.

• If you were an active USPS employee aged 64 or older as of January 1, 2025, you are also exempt from the Part B enrollment requirement when you retire.

• Other exceptions include those living abroad, individuals with TRICARE or VA coverage, or those eligible for Indian Health Services.

If none of these apply to you and you’re Medicare-eligible, enrollment in Part B is not just recommended—it’s required.

What Part B Actually Covers

Medicare Part B is medical insurance. It covers services such as:

• Physician visits

• Outpatient procedures

• Preventive care

• Laboratory services

• Durable medical equipment

• Some home health services

In the PSHB system, your Medicare Part B coverage generally becomes the primary payer, and your PSHB plan becomes secondary. This coordination often results in lower out-of-pocket costs—but only if you’re enrolled.

General Costs for Part B in 2025

In 2025, the standard monthly premium for Medicare Part B is $185. This applies to most enrollees, though individuals with higher incomes pay more through an Income-Related Monthly Adjustment Amount (IRMAA).

Additionally, there’s an annual deductible of $257, after which you typically pay 20% of the Medicare-approved amount for most services.

While these costs can seem significant, not having Part B could ultimately result in far greater out-of-pocket expenses—or worse, no coverage at all through PSHB.

What Happens If You Don’t Enroll in Part B

Failing to enroll in Medicare Part B when required can trigger serious consequences under the PSHB program:

• Loss of Primary Coverage: PSHB plans will assume Medicare is your primary payer and will only pay secondary benefits. If you don’t have Part B, the PSHB plan may deny payment entirely for services that Medicare Part B would have covered.

• No Prescription Drug Coverage: Your PSHB plan may also include Medicare Part D drug coverage as part of its benefits. Without Part B, you could lose access to that as well.

• Re-enrollment Restrictions: If you later decide to enroll in Part B, you might have to wait until the next General Enrollment Period (January 1–March 31), and your coverage wouldn’t begin until July 1. This could leave you without full coverage for months.

• Late Enrollment Penalties: Delaying Part B enrollment without valid exemption leads to a permanent late penalty—your premium increases by 10% for each full 12-month period you delayed.

Why the Coordination Exists

The PSHB and Medicare coordination helps reduce overall costs for the plan and for enrollees. Medicare becomes the primary payer for retirees, taking on the majority of medical costs, while the PSHB plan supplements that coverage. This dual-layer approach generally lowers:

• Out-of-pocket expenses

• Deductibles

• Copayments and coinsurance

In other words, the Part B premium you pay each month typically results in lower total costs throughout the year.

How the $2,000 Drug Cap Factors In

Another 2025 update that aligns with this policy shift is the new $2,000 out-of-pocket cap on prescription drugs under Medicare Part D. Most PSHB plans for Medicare enrollees include a Part D drug plan, but you generally must be enrolled in Part B to access it.

Skipping Part B might mean losing access to this generous drug cap, leaving you responsible for the full cost of prescriptions once your PSHB plan’s coverage limits are met.

How to Enroll in Medicare Part B

To ensure your PSHB plan functions as intended, it’s crucial to enroll in Medicare Part B as soon as you’re eligible. Here’s a general timeline:

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

• General Enrollment Period (GEP): If you miss your IEP, you can enroll between January 1 and March 31, but your coverage starts on July 1.

• Special Enrollment Period (SEP): You may qualify for a SEP if you delayed enrollment due to active employment, but that generally does not apply to retirees.

What If You Already Have Other Coverage?

You might assume that other types of coverage—like VA, TRICARE, or coverage through a spouse—can replace Medicare Part B. In most cases, that’s not true under PSHB rules.

• TRICARE for Life does require Medicare Part B.

• VA coverage is not considered creditable for Medicare Part B purposes.

• Employer coverage is only valid while you or your spouse are actively working, not after retirement.

If you rely on non-Medicare insurance, your PSHB plan may still require you to enroll in Part B to remain eligible for full benefits.

The Misconception That Part B Is Optional

Under FEHB, many retirees delayed or declined Part B, thinking it was unnecessary. In 2025, this approach can cost you your plan. PSHB no longer treats Part B as a secondary option—it is a critical requirement for nearly all Medicare-eligible enrollees.

This misconception can lead to avoidable mistakes. It’s important to check your eligibility and deadlines early.

Don’t Wait Until You Need Medical Care

The consequences of not enrolling in Medicare Part B might not be immediate—but they become very real once you need services like outpatient surgery, specialist consultations, or lab tests. If your PSHB plan assumes Medicare is your primary payer and you don’t have it, you could be responsible for 100% of the bill.

That’s why proactive enrollment is essential. It ensures:

• Your PSHB plan works the way it was designed

• You’re covered for both major and minor health needs

• You avoid gaps in care, surprise bills, and penalties

What to Do If You’re Unsure About Your Status

Not sure if you’re required to enroll in Medicare Part B? Here’s what you should do:

• Check your retirement date to determine if the mandate applies.

• Review PSHB plan materials to confirm Medicare requirements.

• Speak to a licensed insurance agent listed on this website who understands the PSHB rules for 2025.

It’s better to get clarity now than face denied claims or surprise bills later.

Keeping Your Coverage Means Planning Ahead

Staying in compliance with PSHB requirements isn’t just about checking a box—it’s about preserving your access to dependable, affordable health care in retirement. If you’re Medicare-eligible and required to enroll in Part B, delaying or skipping it can result in unnecessary costs and the loss of vital benefits.

Speak with a licensed insurance agent listed on this website to review your Medicare Part B status and understand how it affects your PSHB coverage. The sooner you act, the more protected you’ll be.