Key Takeaways

• PSHB and Medicare are not fully integrated systems; each has its own rules, timelines, and coverage requirements that must be managed together.

• Assuming automatic coordination between the two can lead to denied claims, higher out-of-pocket costs, or even a loss of coverage.

You May Think It’s Automatic—But It’s Not

Many retirees believe that once they enroll in Medicare, their Postal Service Health Benefits (PSHB) plan will simply work alongside it with no further action needed. Unfortunately, this is one of the most common and costly assumptions retirees make. PSHB and Medicare are separate programs, and they do not automatically coordinate unless specific steps are taken.

PSHB enrollees must actively manage their Medicare enrollment, especially when approaching age 65. While some PSHB plans are designed to complement Medicare coverage, the two do not merge or sync by default. Failing to properly enroll in Medicare Part B, for example, can limit your access to certain cost-sharing benefits offered by your PSHB plan.

Enrollment in Medicare Part B Isn’t Optional for Everyone

In 2025, Medicare-eligible Postal Service annuitants and covered family members are required to enroll in Medicare Part B to maintain full PSHB coverage—unless they qualify for a specific exemption.

You’re exempt from mandatory Part B enrollment if:

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

• You were an active Postal Service employee aged 64 or older on January 1, 2025

• You reside overseas

• You receive coverage through the Veterans Affairs (VA) or Indian Health Service (IHS)

If you do not fall under any of these exceptions, and you fail to enroll in Medicare Part B when eligible, your PSHB plan may not cover the services Medicare would have covered. This can leave you with significant out-of-pocket expenses.

Enrollment Timing Is Critical

Your Initial Enrollment Period (IEP) for Medicare lasts for seven months—starting three months before the month you turn 65, including your birthday month, and continuing for three months after. Missing this window can result in a late enrollment penalty and gaps in coverage.

If you missed your IEP and don’t qualify for a Special Enrollment Period (SEP), you may have to wait for the General Enrollment Period, which runs from January 1 to March 31 each year. Coverage then begins on July 1—meaning a possible six-month gap in health coverage.

For PSHB enrollees, this kind of delay could be disastrous. Since some PSHB plans require Medicare Part B to provide full benefits, a delay in Part B enrollment may reduce your coverage under PSHB until Medicare becomes effective.

Coordination of Benefits Isn’t Always Seamless

PSHB plans generally assume Medicare is the primary payer once you’re enrolled. Medicare pays first, and your PSHB plan pays second, covering some of the remaining costs such as deductibles, coinsurance, or copayments.

But here’s where things go wrong:

• If you aren’t enrolled in Medicare Part B, your PSHB plan might still assume Medicare is covering its share and reduce payment accordingly.

• If Medicare denies a claim because it wasn’t filed properly, your PSHB plan may also deny the claim.

• If your providers don’t accept both Medicare and your PSHB plan, you may end up with a balance bill.

Understanding who pays first and ensuring proper billing coordination are essential to avoiding expensive surprises.

Prescription Coverage Adds Another Layer

In 2025, Medicare-eligible annuitants and covered family members enrolled in PSHB will automatically receive prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This integration offers cost protections, such as the $2,000 annual out-of-pocket cap on prescriptions.

However, opting out of the Part D drug coverage component of your PSHB plan can have serious consequences:

• You will lose your prescription drug coverage under PSHB.

• You will not be able to re-enroll in the drug plan unless you experience a qualifying life event.

• You may face late enrollment penalties if you later decide to join Medicare Part D on your own.

So while drug coverage is included, it still requires your attention and understanding.

Medicare Advantage Is Not the Same as Original Medicare

Some retirees believe that enrolling in a Medicare Advantage plan will automatically coordinate with PSHB. That’s not always the case.

Medicare Advantage plans are private health plans that provide Medicare Parts A and B coverage, often with extra benefits. However, some PSHB plans do not coordinate well—or at all—with Medicare Advantage. This can result in denied claims or services being considered out-of-network.

If you are considering enrolling in a Medicare Advantage plan while also maintaining your PSHB coverage, you must:

• Carefully review your PSHB plan’s coordination policies

• Check if your providers are in-network for both plans

• Be aware that some PSHB plans may not waive deductibles or copays if Medicare Advantage is used

Out-of-Pocket Costs Can Rise Without Proper Coordination

One of the main reasons to coordinate PSHB with Medicare is to reduce out-of-pocket costs. Many PSHB plans offer:

• Lower copays and coinsurance when Medicare is primary

• Waived deductibles when both Medicare Parts A and B are in place

• Reduced costs on hospital stays and specialist visits

Without Medicare, your PSHB plan may require you to pay full deductibles, higher copays, or a greater share of coinsurance. In 2025, common PSHB deductibles can range from $350 to $2,000, depending on the plan.

Understanding how your PSHB plan treats Medicare coordination allows you to take full advantage of these cost-saving features.

Changes Must Be Made During Open Season—Or Not At All

Every year from November to December, PSHB Open Season allows you to:

• Change plans

• Switch between Self Only, Self Plus One, or Self & Family coverage

• Update your eligibility status

If you want to switch to a plan with better Medicare coordination—or ensure you remain in a plan that offers the most benefits alongside Medicare—Open Season is your window.

Outside of Open Season, changes can only be made during a Qualifying Life Event (QLE), such as a marriage, birth, or change in employment status. Missing this window may mean being locked into a plan that doesn’t meet your Medicare coordination needs for the rest of the year.

Not All PSHB Plans Offer Equal Medicare Benefits

PSHB offers a range of plans, each with different levels of Medicare coordination. Some plans may:

• Reimburse a portion of your Medicare Part B premium

• Waive deductibles and coinsurance for Medicare-covered services

• Offer enhanced benefits like telehealth or home health monitoring

Others may offer minimal integration, leading to higher out-of-pocket costs and more red tape.

When evaluating PSHB plans, look for those that clearly explain:

• How they coordinate with Medicare

• Whether they require Medicare enrollment for full benefits

• If they offer premium reimbursements or other incentives

A licensed agent listed on this website can help you review these details and identify plans that match your healthcare needs.

Medicare and PSHB Working Together Takes Effort—But It’s Worth It

Thinking PSHB and Medicare work together automatically is a mistake that can cost you money, delay access to care, or even leave you partially uninsured. But once you understand how they fit together—and take the steps to ensure proper coordination—you can enjoy the stronger, more reliable coverage they offer when paired correctly.

The key is staying informed, acting early, and asking for help when needed.

Make Sure You’re Covered the Way You Expect

Relying on assumptions is risky—especially when it comes to healthcare in retirement. PSHB and Medicare can absolutely work well together, but not without your involvement.

Review your Medicare enrollment timeline, confirm your eligibility and exemptions, and ensure your PSHB plan supports Medicare coordination. And most importantly, don’t wait until a claim is denied to discover something was missing.

Speak with a licensed agent listed on this website to get personalized help in selecting a PSHB plan that coordinates well with your Medicare coverage.