Key Takeaways

• If you’re enrolled in a PSHB plan and also eligible for Medicare, you may already have comprehensive prescription drug coverage through an integrated Part D benefit.

• Enrolling in a separate, standalone Part D plan outside of PSHB can lead to duplicate coverage, unnecessary premiums, and potential conflicts with how your PSHB plan processes drug claims.

PSHB Prescription Drug Coverage: What You Already Have

The Postal Service Health Benefits (PSHB) Program offers enhanced prescription drug coverage for annuitants who are enrolled in Medicare. For those eligible for Medicare Part A and B, the PSHB program automatically includes an Employer Group Waiver Plan (EGWP) under Medicare Part D. This means your prescription drug benefits are already embedded within your PSHB plan—and that can eliminate the need to enroll in a separate Part D plan.

This integrated drug coverage through PSHB is not just equivalent to standalone Medicare Part D. In many cases, it is designed to be more generous. Most plans provide lower copayments, waive deductibles, and cap your out-of-pocket drug costs annually—thanks to how the EGWP interacts with Medicare and your PSHB plan.

Key Features of PSHB Prescription Benefits

• Automatically included for Medicare-eligible annuitants and family members.

• Works with Medicare Part B to coordinate benefits.

• Often includes an annual out-of-pocket maximum, like the $2,000 cap introduced in 2025.

• Offers access to an expanded pharmacy network nationwide.

• Complies with Medicare Part D rules but may offer broader coverage.

What Medicare Part D Covers (and Where It Stops)

Medicare Part D is designed for beneficiaries who need prescription drug coverage. It covers a wide range of medications but comes with certain limitations:

• Annual deductible (up to $590 in 2025).

• Copayments or coinsurance depending on the drug tier.

• A $2,000 out-of-pocket cap in 2025, after which you owe nothing for covered drugs.

• Network restrictions that can affect where and how you fill prescriptions.

While Part D is an essential resource for millions of Medicare enrollees, it’s not uniquely tailored for Postal retirees. PSHB plans, on the other hand, are built specifically for Postal Service annuitants and already account for your Medicare eligibility.

The Overlap Problem: Double Coverage and Double Costs

One of the biggest pitfalls you can face in 2025 is unknowingly enrolling in a standalone Part D plan when your PSHB plan already includes Part D through an EGWP. Doing so may lead to:

• Automatic disenrollment from your PSHB drug coverage.

• Duplicate premiums: You could be paying for an additional plan that doesn’t add any value.

• Coordination of benefits conflicts: Your PSHB plan and the separate Part D plan may not align, causing delays or denials in prescription processing.

Since PSHB coverage includes Part D in coordination with Medicare, there’s no need to purchase an additional standalone Part D plan. Doing so doesn’t provide extra coverage—in fact, it may reduce or cancel what you already have.

Understanding the EGWP: How It Works Inside PSHB

EGWP stands for Employer Group Waiver Plan. It’s a Medicare Part D plan offered through an employer-sponsored health benefit (in this case, PSHB). The EGWP operates within your PSHB plan to coordinate with Medicare and offer:

• A streamlined prescription drug experience.

• Reduced out-of-pocket expenses for drugs.

• Automatic enrollment for Medicare-eligible annuitants and dependents.

• Protection against the coverage gap (previously known as the “donut hole”).

If you’re Medicare-eligible and enrolled in a PSHB plan, you are automatically covered by the EGWP—unless you opt out, which is generally not recommended unless you have creditable coverage elsewhere.

Timing Matters: Enrollment Windows and Impacts

Your decision about drug coverage should match your eligibility milestones:

• At age 65, if you are Medicare-eligible, you’ll receive information about the EGWP embedded in your PSHB plan.

• If you delay enrolling in Medicare Part B, you may lose the ability to coordinate your PSHB benefits effectively.

• Opting out of the PSHB drug benefit or enrolling in another Part D plan will usually terminate your EGWP coverage.

Changes to your prescription drug coverage can only be made during specific enrollment periods, such as:

• Open Season (November to December) every year for PSHB.

• Medicare Annual Enrollment Period (October 15 to December 7) if you are considering changes to your Medicare-related coverage.

Coordination between these periods is critical to avoid gaps or penalties.

Comparing Costs: Why Separate Part D Plans May Add No Value

Although standalone Medicare Part D plans vary in premiums and cost-sharing, they follow standard federal requirements for coverage. When compared to what is integrated in PSHB plans, the differences in value become clearer:

• PSHB drug plans typically waive the Part D deductible.

• PSHB plans often include lower-tier copayments for generics and brand-name medications.

• Your EGWP coverage includes national pharmacy networks similar to or broader than most private Part D plans.

• The $2,000 out-of-pocket cap in 2025 applies automatically under PSHB if you’re Medicare-enrolled.

Unless you have very specific medication needs that are only met by a niche Part D plan (and this is rare), you’re unlikely to gain financial or medical value by paying for a separate plan.

Pharmacy Access Under PSHB Drug Coverage

You may wonder whether PSHB drug plans are as flexible as Medicare Part D plans. The answer is yes—and sometimes more so.

Most PSHB plans:

• Work with major national pharmacy chains and independent pharmacies.

• Offer mail-order options for maintenance medications.

• Provide formulary lists that are competitive with or broader than Medicare Part D plans.

• Use tools like prior authorization and step therapy to ensure safe, cost-effective drug use, similar to what Medicare requires.

You won’t be restricted to a small network or forced to pay more unless you opt for non-formulary medications.

What Happens If You Opt Out of PSHB Drug Coverage

You do have the right to opt out of your PSHB prescription drug coverage. However, it comes with serious consequences:

• You won’t be able to re-enroll until the next Open Season, unless you experience a qualifying life event.

• You may face limited access to affordable drug coverage in the meantime.

• If you don’t enroll in a creditable drug plan elsewhere, Medicare may apply a late enrollment penalty if you join a Part D plan later.

For most annuitants, staying enrolled in the PSHB EGWP provides more protection and convenience than going without.

Why PSHB Plans Warn Against Enrolling in Standalone Part D

PSHB brochures and plan guides for 2025 include clear warnings not to enroll in a separate Medicare Part D plan. These warnings exist for a reason:

• A separate Part D enrollment may automatically remove you from your PSHB-integrated prescription benefit.

• It may jeopardize other cost-sharing benefits tied to your Medicare coordination.

• It could reduce or eliminate premium reimbursements that some PSHB plans offer for enrollees with Part B.

If your plan includes language warning against outside Part D enrollment, take it seriously. Your PSHB drug coverage is intended to be complete when paired with Medicare Part B—not supplemented by private alternatives.

Making Informed Decisions About Your Coverage

Before taking any steps to change or add to your prescription drug coverage, be sure to:

• Review your PSHB plan brochure carefully.

• Understand what your EGWP provides in terms of drug coverage.

• Check your Medicare status to confirm whether you’re already enrolled in Part B (a requirement for most PSHB drug benefits).

• Talk to a licensed agent listed on this website who understands the PSHB-Medicare relationship.

Attempting to enhance your coverage by enrolling in a standalone Part D plan could do the opposite—it might reduce or eliminate your existing benefits instead.

Stay with What Works: PSHB Drug Benefits Are Already Complete

In 2025, PSHB plans offer drug coverage that mirrors and often exceeds what a standard Medicare Part D plan provides. You gain coordinated, cost-effective access to prescription drugs through your PSHB plan’s EGWP. If you are eligible for Medicare and already enrolled in PSHB, there is no need to add a separate Part D plan. Doing so only invites risk and expense without improving your coverage.

If you have questions about your current drug benefits or are unsure how Medicare enrollment affects your PSHB plan, speak with a licensed agent listed on this website. They can help you avoid costly coverage mistakes and ensure you’re getting the full value of your benefits.