Key Takeaways

• If you’re eligible for VA healthcare and are also a USPS retiree or employee transitioning to the PSHB Program in 2025, you may still need to enroll in Medicare Part B depending on your status and specific circumstances.

• Not enrolling in Medicare Part B when required could result in losing important PSHB benefits, including prescription drug coverage integrated with Medicare.

Understanding the PSHB and VA Healthcare Landscape

In 2025, the Postal Service Health Benefits (PSHB) Program officially replaces FEHB for USPS employees and annuitants. This change, implemented under the Postal Service Reform Act of 2022, introduces new rules—especially for those who are also eligible for Medicare or enrolled in VA healthcare.

VA healthcare is a separate system designed to serve veterans. If you qualify for both VA coverage and PSHB, understanding how Medicare Part B fits into the equation is essential. The rules can vary depending on whether you’re still working, already retired, or fall into an exemption category.

What PSHB Requires for Medicare-Eligible Individuals

As of January 1, 2025, most Medicare-eligible USPS retirees and their Medicare-eligible family members must enroll in Medicare Part B to maintain full PSHB coverage. This includes the integration of prescription drug benefits and other cost-saving advantages.

However, there are important exceptions:

• If you retired on or before January 1, 2025 and are not already enrolled in Medicare Part B, you are not required to enroll.

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

• Other exemptions apply to those living abroad or receiving care through VA or Indian Health Services, depending on how those benefits interact with PSHB.

How VA Healthcare Interacts with Medicare

VA healthcare coverage only applies within the VA system. This means you are covered when you visit a VA hospital, clinic, or see a VA-approved provider. However, VA coverage doesn’t extend to services or providers outside the VA network. If you need non-VA care, Medicare Part B is generally required to help pay for those services.

Here’s how they differ:

• VA Healthcare: Covers services at VA facilities; does not pay for care outside VA.

• Medicare Part B: Covers doctor visits, outpatient services, preventive care, and more outside the VA system.

If you skip Medicare Part B, you may be left without coverage for non-VA care, unless you have another source of insurance.

Why Medicare Part B Matters Under PSHB in 2025

The PSHB Program is designed to work alongside Medicare. When you have both, your plan typically waives or reduces deductibles, lowers copayments, and integrates drug coverage through a Medicare Part D EGWP (Employer Group Waiver Plan).

Failing to enroll in Medicare Part B can mean:

• Loss of access to coordinated benefits under PSHB

• Higher out-of-pocket costs for non-VA care

• Limited or no prescription drug coverage

PSHB plans assume Medicare Part B is in place. Without it, many of the PSHB benefits tailored for retirees may no longer apply.

What Happens If You Only Have VA and Skip Part B?

If you’re relying solely on VA healthcare and decide not to enroll in Medicare Part B, your PSHB benefits could be affected in these ways:

• Prescription Drug Coverage: PSHB plans integrate with Medicare Part D. If you opt out of Medicare, you could lose this integrated drug coverage under PSHB.

• Limited Access to Non-VA Services: Any care outside the VA system won’t be covered unless you have Medicare Part B or another health plan.

• No Re-enrollment Options: If you decline Medicare Part B now and change your mind later, re-enrollment is only available during a General Enrollment Period and may come with a permanent late penalty.

So even if VA healthcare works well for you now, it may not cover all future needs.

Special Cases and Exemptions

Some individuals are exempt from mandatory Medicare Part B enrollment under PSHB:

• You retired on or before January 1, 2025 and are not enrolled in Medicare Part B.

• You are an active USPS employee aged 64 or older as of January 1, 2025.

• You live permanently outside the U.S.

• You are a recipient of Indian Health Services or VA care, depending on how PSHB defines coordination of benefits in those cases.

In these situations, PSHB coverage continues without requiring Medicare Part B, but your benefits could still be reduced without the additional support Part B provides.

Enrollment Windows and What to Watch

If you’re newly eligible for Medicare in 2025 or didn’t enroll during your Initial Enrollment Period, here’s what to know:

• Initial Enrollment Period (IEP): Begins 3 months before your 65th birthday and ends 3 months after it.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year, with coverage beginning July 1.

• Special Enrollment Period (SEP): Previously offered for PSHB enrollees from April 1 to September 30, 2024, allowing late Medicare Part B enrollment without penalty. This SEP has now ended.

Missed enrollment opportunities could result in permanent penalties added to your Medicare Part B premium.

Consider the Future—Not Just the Present

Relying on VA healthcare now might seem fine, but healthcare needs can change with age. Emergency services, outpatient care, or specialists not covered by VA could become necessary.

Medicare Part B provides broader access to:

• Primary and specialty care outside VA

• Emergency medical services

• Preventive screenings and diagnostics

• Coordination with PSHB to reduce costs

If you want the flexibility to seek care both within and outside the VA, Medicare Part B is an important part of your health insurance strategy in 2025.

Comparing Out-of-Pocket Costs With and Without Part B

While every situation is different, here’s a general look at potential differences:

With Medicare Part B and PSHB:

• Lower deductibles and copays

• Drug costs may be capped or reduced

• Greater provider flexibility

With VA Only and PSHB (No Medicare Part B):

• No coverage for non-VA providers

• Possible loss of drug coverage

• Full responsibility for out-of-pocket costs for outside care

These differences can be significant if your health needs change suddenly.

What You Should Do Now

If you are approaching Medicare eligibility or already 65 and covered under VA healthcare, ask yourself:

• Are you retired or planning to retire soon?

• Were you already retired on or before January 1, 2025?

• Are you willing to rely solely on VA services, or do you want access to non-VA providers?

Your answers will shape whether you need to enroll in Medicare Part B or if an exemption applies. It’s important to understand that future re-enrollment opportunities are limited.

Reviewing Your Coverage Strategy

If you’re currently enrolled in VA healthcare and qualify for Medicare in 2025, take time to:

• Review your eligibility for Medicare Part B

• Compare what’s covered under VA versus PSHB with Medicare

• Consider your long-term care needs and provider preferences

• Stay within enrollment deadlines to avoid penalties

Choosing whether or not to enroll in Medicare Part B is a decision that can have lasting consequences. Don’t assume VA coverage alone will always be enough.

Medicare Part B Enrollment Still Matters—Even With VA

The combination of PSHB and Medicare Part B provides a safety net that covers more ground than VA healthcare alone. If you’re a USPS retiree or family member and you qualify for Medicare in 2025, strongly consider enrolling unless you fall into an official exemption category.

Missing the window or choosing not to enroll can lead to reduced benefits and higher costs later.

For help determining what’s best for your situation, speak with a licensed agent listed on this website who can guide you based on your current status and future goals.