Key Takeaways:

• Medicare Part D and the Postal Service Health Benefits (PSHB) program offer prescription drug coverage for eligible USPS retirees and their dependents, but understanding how they work together is essential for managing healthcare costs.

• Enrolling in Medicare Part B is a requirement for many postal retirees to maintain PSHB coverage, and this also impacts how prescription drug benefits are structured.

Understanding Prescription Coverage for Postal Workers

If you’re a retired USPS employee or a dependent covered under the Postal Service Health Benefits (PSHB) program, you may be wondering how your prescription drug coverage works. With the transition from the Federal Employees Health Benefits (FEHB) program to PSHB, things have changed, especially for those eligible for Medicare.

One of the biggest adjustments involves Medicare Part D and how it integrates with PSHB prescription benefits. Here’s what you need to know about managing your medication costs and coverage under these programs.

1. Medicare Part D Is the Primary Prescription Plan for Many Retirees

If you’re enrolled in PSHB and eligible for Medicare, your prescription drug coverage is handled through a Medicare Part D Employer Group Waiver Plan (EGWP). This means that instead of relying solely on PSHB for medication costs, your prescription benefits will function under Medicare Part D rules.

What This Means for You

• Automatic Enrollment: If you are eligible for Medicare, your PSHB plan will automatically enroll you in a Part D prescription drug plan.

• Lower Costs for Many Medications: Medicare Part D helps reduce out-of-pocket drug expenses, thanks to federal subsidies and cost-sharing structures.

• Phased Coverage: Part D prescription drug benefits follow a structured coverage model, including a deductible phase, initial coverage phase, and catastrophic phase. Once you reach the $2,000 out-of-pocket cap in 2025, you won’t have to pay anything more for covered medications that year.

2. Medicare Part B Enrollment Affects Your Prescription Coverage

PSHB requires most Medicare-eligible retirees to enroll in Medicare Part B to maintain their health plan. While Part B covers doctor visits, outpatient care, and durable medical equipment, it indirectly affects prescription coverage as well.

Why Part B Enrollment Matters

• Coordination of Benefits: Enrolling in Medicare Part B ensures that your overall health benefits work seamlessly with PSHB, including prescription drug coverage.

• Certain Medications Are Covered by Part B: Some medications, such as chemotherapy drugs and injections administered in a doctor’s office, are covered under Medicare Part B instead of Part D.

• Potential Premium Reimbursements: Some PSHB plans offer partial reimbursement of Medicare Part B premiums, which can help offset healthcare costs.

3. Prescription Costs Vary Based on Your Plan and Medication Needs

Your out-of-pocket costs for prescription drugs under PSHB and Medicare Part D depend on several factors, including the specific medications you take and the plan’s formulary (list of covered drugs).

Cost Considerations

• Drug Tiers: Most Part D plans categorize medications into tiers, with lower-tier generics costing less than brand-name or specialty drugs.

• Coverage Phases: Once your total prescription costs reach a certain amount, you may enter different coverage phases, impacting how much you pay until you reach the out-of-pocket maximum of $2,000.

• Preferred Pharmacies: Using in-network or preferred pharmacies can lower your prescription costs, while out-of-network pharmacies may result in higher expenses.

4. The PSHB Program’s Transition Brings Important Changes

The shift from FEHB to PSHB in 2025 has introduced new policies affecting prescription drug coverage. If you’re a postal retiree, you should review how these changes impact your healthcare expenses and coverage.

Key PSHB Prescription Coverage Changes

• Mandatory Part D Enrollment for Medicare-Eligible Retirees: If you qualify for Medicare, you’ll be automatically enrolled in a Medicare Part D EGWP plan through your PSHB provider.

• Prescription Drug Plans Are Now More Standardized: Unlike FEHB, which had varying prescription benefits, PSHB’s integration with Medicare Part D follows a more consistent structure, reducing unexpected costs.

• Improved Out-of-Pocket Protections: The introduction of the $2,000 cap on out-of-pocket prescription costs in 2025 means retirees will have financial relief once they hit that threshold.

5. Reviewing Your Plan Annually Is Essential

Just like with Medicare Advantage or standalone Part D plans, PSHB prescription drug benefits can change each year. This means it’s important to review your plan annually to ensure it still meets your needs.

Why You Should Review Your Plan

• Formulary Changes: The list of covered drugs can change, affecting whether your medications remain affordable.

• Premium and Cost Changes: While Medicare Part D costs are regulated, your PSHB plan may adjust how cost-sharing works each year.

• New Plan Offerings: Some PSHB plans may introduce enhanced drug coverage options that better suit your needs.

Staying Informed About Your Prescription Coverage

Understanding the ins and outs of Medicare Part D and PSHB prescription coverage ensures that you maximize your benefits and avoid unexpected costs. Whether you’re managing a chronic condition requiring ongoing medication or simply planning for the future, staying informed helps you make the best decisions for your healthcare needs.

To ensure you have the most accurate and up-to-date information about your coverage, get in touch with a licensed agent listed on this website. They can help you compare plans, review your current benefits, and answer any questions you have about PSHB and Medicare Part D.