Key Takeaways

• Enrolling in Medicare Part B is not just a medical decision—it directly affects what you pay under your PSHB plan, including your premiums, deductibles, and drug coverage.

• Failing to coordinate your Medicare enrollment with PSHB may result in higher out-of-pocket costs, reduced benefits, or even loss of prescription drug coverage.

Why Medicare Part B Matters for Your PSHB Benefits

The Postal Service Health Benefits (PSHB) Program, implemented in 2025, is specifically designed to integrate with Medicare for eligible annuitants. If you’re approaching retirement or already retired and enrolled in Medicare, the way you manage your Medicare Part B enrollment has direct consequences on your PSHB coverage.

PSHB plans are structured with the assumption that Medicare is your primary insurance once you’re eligible. That structure significantly affects the cost-sharing details of your PSHB benefits—especially your premiums, deductibles, and prescription drug coverage. Let’s explore what this means for you.

Premium Impacts: What You Pay Each Month Can Change

If you are Medicare-eligible and enrolled in Part B, your PSHB plan treats Medicare as the primary payer. This coordination changes how your premiums are calculated and what value you receive from your plan.

Medicare Enrollment Often Reduces PSHB Premium Impact

• When you have both Medicare Part B and a PSHB plan, your PSHB plan typically becomes the secondary payer. That means your plan incurs fewer costs, which may result in reduced premium adjustments compared to those who rely solely on PSHB.

• Some PSHB plans offer enhanced benefits for those enrolled in Part B. These enhancements often include lower out-of-pocket costs or improved service access, which can improve the value of your premium.

Without Part B, You May Face Higher Premium-Value Tradeoffs

• If you do not enroll in Medicare Part B when required, your PSHB plan becomes your primary payer. This increases the plan’s cost responsibility and may lead to higher premiums in the future or limited cost-sharing reductions.

• Over time, this misalignment could erode the value you receive for your monthly premium.

Deductible Differences: Coordination with Medicare Matters

Your deductible is the amount you must pay out-of-pocket before your insurance starts covering costs. With PSHB, your deductible situation can change significantly based on whether or not you’re enrolled in Medicare Part B.

With Part B: Lower or Waived Deductibles

Many PSHB plans reduce or even waive your annual medical deductible when you are enrolled in Medicare Part B. That’s because Medicare pays first, and PSHB pays second.

• For in-network services, this dual coverage often eliminates your need to meet the PSHB deductible.

• For outpatient services like doctor visits and lab work, Medicare Part B typically covers 80%, and your PSHB plan may cover most or all of the remaining 20%.

This setup can make your out-of-pocket costs more predictable and lower overall.

Without Part B: Higher Deductibles and More Risk

• If you don’t enroll in Medicare Part B when required, your PSHB plan must pay full cost shares as the primary payer. In this case, your plan’s full annual deductible applies.

• Depending on your plan, you may pay hundreds or even thousands of dollars more in medical bills before benefits kick in.

• High-deductible PSHB plans become especially costly without the offsetting role of Medicare.

Prescription Drug Coverage Under PSHB and Medicare Part B

In 2025, PSHB plans include integrated Medicare Part D prescription drug coverage for Medicare-eligible annuitants. This design relies on your participation in both PSHB and Medicare.

If You Enroll in Part B: You Automatically Receive Part D Drug Coverage

• When you have Medicare Part A and Part B, your PSHB plan automatically enrolls you in a Medicare Part D plan known as an Employer Group Waiver Plan (EGWP).

• This EGWP plan offers:

  • Access to a nationwide pharmacy network

  • A $35 insulin cap per month

  • An annual out-of-pocket maximum of $2,000 for covered drugs

The EGWP is embedded in your PSHB plan, giving you robust drug coverage with minimal administrative work.

If You Decline Part B: You Lose Drug Coverage

• If you’re Medicare-eligible and decline Part B, you cannot be enrolled in the EGWP drug coverage. PSHB requires Part B participation for drug coverage to activate.

• Without drug coverage through your PSHB plan, you would need to seek standalone Medicare Part D, which may not coordinate as well or offer the same protections.

• Opting out could also result in late enrollment penalties if you later try to enroll in Part D.

Timeline for Medicare Part B Enrollment and Its PSHB Impact

Understanding when to enroll in Medicare Part B is essential if you want to maintain uninterrupted, cost-effective PSHB coverage.

Initial Enrollment Period

• Begins three months before your 65th birthday, includes your birth month, and extends three months after.

• If you’re retiring at age 65 or older, you must sign up during this window to avoid late penalties and coverage gaps.

Special Enrollment Period for Postal Retirees (2024 Only)

• From April 1 to September 30, 2024, a Special Enrollment Period allowed annuitants already on FEHB (Federal Employees Health Benefits) to enroll in Medicare Part B without a penalty.

• If you missed this window and are required to enroll in 2025, you may now face a penalty depending on your age and prior coverage.

General Enrollment Period

• Runs from January 1 to March 31 each year.

• If you missed earlier enrollment, this is your fallback. Coverage begins July 1, and late penalties may apply.

Who Is Required to Enroll in Part B for PSHB?

Not everyone is required to enroll in Medicare Part B to stay on a PSHB plan. But many are. Here’s who must enroll and who may be exempt.

Required to Enroll:

• Annuitants who retire after January 1, 2025, and become Medicare-eligible

• Medicare-eligible family members of those annuitants

Exempt from Requirement:

• Annuitants who retired on or before January 1, 2025

• Active employees who were age 64 or older as of January 1, 2025

• Individuals with access to Veterans Affairs (VA) or Indian Health Service (IHS) benefits

• Those living abroad where Medicare is not accepted

If you’re required to enroll and do not, you will lose PSHB medical and prescription drug coverage.

Financial Risks of Delaying Part B Enrollment

Many retirees are caught off guard by the financial penalties and coverage losses that come with delaying Part B enrollment. These include:

• Late Enrollment Penalty: For each 12-month period you delay enrolling in Part B without creditable coverage, your premium increases by 10%—permanently.

• Loss of PSHB Eligibility: Failure to enroll when required can terminate your access to the PSHB plan altogether.

• No Prescription Drug Coverage: As discussed, PSHB Part D coverage is tied to Part B enrollment.

These consequences are often irreversible and financially burdensome.

Additional Cost Benefits When Coordinating Part B with PSHB

Besides premium and deductible advantages, several other financial incentives exist for Medicare enrollees under PSHB:

• Reduced Coinsurance: With Medicare as the primary payer, PSHB plans often reduce or eliminate your portion of coinsurance.

• Fewer Copayments: Common services like doctor visits and urgent care may have little to no copay when Medicare pays first.

• Annual Out-of-Pocket Caps: Your prescription drug costs are capped at $2,000 annually under the EGWP Part D structure.

All of these contribute to better financial predictability in retirement.

What Happens Behind the Scenes: Coordination of Benefits

When you enroll in both PSHB and Medicare Part B, your claims are automatically processed using coordination of benefits rules:

• Medicare pays first for services it covers.

• PSHB pays second, often covering the rest.

• You rarely need to handle paperwork or submit secondary claims yourself.

This streamlined coordination enhances your experience and reduces your paperwork burden.

The Bigger Picture for Long-Term Healthcare Planning

PSHB is designed to work in harmony with Medicare. Ignoring this alignment doesn’t just mean paying more—it could mean losing access to key benefits that protect your health and wallet in retirement.

Smart coordination with Medicare Part B ensures:

• Continued access to comprehensive health and drug coverage

• Financial protection against high deductibles and unexpected costs

• Compliance with PSHB eligibility rules moving forward

Don’t Let Medicare Part B Be an Afterthought

Understanding how Medicare Part B enrollment influences your PSHB premiums, deductibles, and prescription drug benefits is not optional—it’s essential. Missteps can cost you financially and reduce your healthcare access.

If you’re unsure whether you need to enroll in Part B or how it affects your PSHB plan, speak with a licensed agent listed on this website for personalized guidance and to protect your coverage.