Key Takeaways

• Enrolling in both Medicare and a PSHB plan doesn’t always guarantee seamless coverage. Some combinations may result in unexpected costs or denied claims.

• Understanding how Medicare coordinates with PSHB in 2025 is essential—especially since not all PSHB plans align well with Medicare’s structure.

The Big Picture: PSHB and Medicare Coordination in 2025

On paper, pairing Medicare with your Postal Service Health Benefits (PSHB) plan seems like an ideal way to ensure full healthcare coverage during retirement. Medicare helps cover hospital and medical costs, while your PSHB plan offers added benefits, networks, and potentially lower out-of-pocket expenses when paired with Medicare Part B.

But in 2025, this seemingly perfect pairing doesn’t always play out as expected.

Some PSHB plans are designed to work efficiently with Medicare. Others are not. And when there’s poor coordination, it’s you—the patient—who may pay more or face delays.

Understanding the Role of Each: What Medicare and PSHB Cover

Medicare comes in several parts:

• Part A covers inpatient hospital stays, skilled nursing facility care, and some home health care. Most people don’t pay a premium for Part A.

• Part B covers doctor visits, outpatient care, preventive services, and durable medical equipment. The 2025 monthly premium is $185, with a deductible of $257.

• Part D handles prescription drug coverage, with a $2,000 out-of-pocket cap in 2025.

Meanwhile, PSHB plans—replacing FEHB coverage for USPS annuitants and employees—offer a comprehensive layer of insurance that varies by carrier but typically includes:

• Primary and specialist care

• Emergency and urgent care

• Preventive services

• Prescription drugs (often through a Medicare Part D EGWP for retirees with Medicare)

The Coordination Challenge

Problems often arise when both your PSHB plan and Medicare cover the same service, but disagree on how the costs should be divided. The issue isn’t duplication of coverage—it’s misalignment.

Some PSHB plans in 2025 automatically reduce or waive cost-sharing for Medicare enrollees. But others expect Medicare to pay first and offer little help with the remaining balance. If the coordination isn’t built into the plan design, you may face higher costs or administrative headaches.

When Having Both Doesn’t Help

Certain combinations of PSHB plans and Medicare can leave you exposed to:

• Non-covered services: If your PSHB plan excludes a service that Medicare covers, or vice versa, you could be stuck with the bill.

• Denied claims due to billing conflicts: When providers don’t understand how to bill both Medicare and PSHB correctly, delays and denials can follow.

• Excess out-of-pocket costs: If the PSHB plan doesn’t cover your Medicare deductible or coinsurance, your savings might evaporate quickly.

Medicare Part B Requirements for PSHB in 2025

As of 2025, many USPS annuitants are required to enroll in Medicare Part B to keep PSHB coverage if they’re Medicare-eligible. This requirement affects:

• Annuitants and eligible family members who become entitled to Medicare on or after January 1, 2025.

• Current employees who are age 64 or younger as of January 1, 2025, once they retire and become Medicare-eligible.

Exceptions include those who retired before 2025 or qualify due to overseas residence or VA/Indian Health Service coverage.

If you skip Medicare Part B despite being required to enroll, you may lose your PSHB plan altogether. This makes the coordination more than just a preference—it’s now policy-driven.

What Makes Some PSHB Plans a Poor Fit?

Not all PSHB plans offer the same level of support for Medicare enrollees. Some gaps to watch out for in 2025 include:

• No Medicare Part B premium reimbursements

• Minimal reduction in cost-sharing for Medicare-covered services

• Weak coordination of benefits processes, leading to billing confusion

This becomes particularly problematic if you rely heavily on Medicare-covered services like outpatient surgeries or home health care. A PSHB plan that doesn’t work well with Medicare may still leave you on the hook for substantial coinsurance or cost gaps.

The Myth of Double Coverage Safety

It’s a common misconception that having two plans means you’re always protected. But if both plans don’t align in how they process claims, your experience may include:

• Duplicate paperwork

• Out-of-network penalties

• Slow reimbursements or unpaid claims

The protection only works if the plans coordinate properly and if your providers are aware of the two layers of billing.

Paying for Two—But Getting Less

PSHB enrollees with Medicare Part B are paying two premiums:

• The standard Medicare Part B premium ($185/month in 2025)

• The monthly PSHB premium (based on your selected plan and tier)

That’s a major financial commitment. If your PSHB plan doesn’t offer enough added value for Medicare enrollees, you’re essentially overpaying for underperformance. Without coordination, you may not be leveraging Medicare’s coverage to reduce your overall healthcare costs.

Prescription Drug Coordination Issues

By default, PSHB plans for Medicare-eligible annuitants include a Medicare Part D EGWP (Employer Group Waiver Plan). This replaces your standard PSHB prescription coverage once Medicare eligibility kicks in.

But problems arise if:

• You opt out of the EGWP

• You don’t enroll in Medicare Part B (which may be required to keep your Part D plan active)

• Your pharmacy doesn’t process EGWP claims correctly

Since Part D now has a $2,000 out-of-pocket cap in 2025, the savings can be substantial—but only if everything runs smoothly.

When to Reevaluate Your Coverage Pairing

You should review your Medicare and PSHB combination:

• Each year during Open Season (November to December)

• Whenever your health needs change significantly

• If you receive an Annual Notice of Change (ANOC) with major plan changes

Ask yourself:

• Does my PSHB plan reduce my cost-sharing as a Medicare enrollee?

• Are my providers in both Medicare and PSHB networks?

• Do I understand how my prescriptions are billed and covered?

How to Identify a Strong Medicare-Compatible PSHB Plan

The best PSHB plans for Medicare enrollees in 2025 often share the following features:

• Waived or reduced deductibles and copayments for Medicare-covered services

• Automatic crossover claims processing with Medicare

• Clear pharmacy coordination for EGWP/Part D

• Potential reimbursements or incentives for Medicare Part B enrollment

These features allow you to get the most out of both your Medicare and PSHB benefits—and prevent the common gaps that emerge from mismatched combinations.

Don’t Assume—Ask Questions Before You Enroll

Before settling on a PSHB plan during Open Season, confirm:

• Whether Medicare is considered your primary payer

• If claims automatically transfer from Medicare to PSHB

• What happens if you don’t enroll in Medicare Part B

• How your prescription drugs will be covered once Medicare kicks in

If your current plan can’t answer these questions clearly—or if the answers create more concerns than confidence—it might be time to switch.

Your PSHB Plan Should Work With Medicare—Not Against It

You deserve healthcare coverage that’s simple, reliable, and cost-effective. But in 2025, having both Medicare and PSHB doesn’t guarantee that outcome. The wrong combination can leave you with unnecessary costs, confusion at the pharmacy or doctor’s office, and stress you don’t need.

Get in touch with a licensed agent listed on this website before making your next enrollment decision. Reviewing your Medicare and PSHB pairing with a professional ensures your coverage works with you—not against you.