Key Takeaways

• Even if you’re enrolled in a Medicare drug plan under PSHB, that doesn’t mean you have the coverage that best fits your prescriptions and usage needs in 2025.

• The new $2,000 out-of-pocket cap in 2025 is a major improvement, but it doesn’t eliminate unexpected costs, especially if your medications aren’t covered or are placed in higher tiers.

What Medicare Drug Coverage Includes Under PSHB in 2025

As of 2025, your Medicare-eligible drug coverage under the Postal Service Health Benefits (PSHB) Program includes an integrated Medicare Part D Employer Group Waiver Plan (EGWP). This structure allows eligible annuitants and their Medicare-enrolled family members to receive prescription drug benefits as part of their PSHB plan.

This coverage meets the standard Part D benefit model but can vary based on the plan you’ve chosen. While the Medicare Drug Benefit offers significant protection—especially with the elimination of the coverage gap (donut hole)—there are still nuances in what is covered, how much you pay, and how you access your medications.

Here’s what’s generally included:

• Coverage through a Medicare Part D EGWP embedded in your PSHB plan

• A maximum annual out-of-pocket drug cost cap of $2,000 starting in 2025

• Access to a nationwide pharmacy network

• Affordable insulin limited to $35 per month (or less, if plan-specific rules apply)

• Formulary tiers that categorize medications based on cost-sharing levels

Why Coverage Alone Isn’t Enough

Enrolling in a PSHB plan that includes drug coverage is only one part of protecting your health and wallet. You also need to ensure the plan actually covers the prescriptions you take—and at costs that make sense for your usage pattern.

This is where many people get caught off guard. Even if you’ve enrolled in a PSHB plan that includes Medicare Part D benefits, your specific drugs may fall into higher tiers or be excluded from the formulary altogether.

Coverage Gaps You Might Overlook

• Formulary exclusions: Not all drugs are covered by every plan. If your drug isn’t listed, you may be responsible for the full retail cost.

• Tiered pricing: Drugs are categorized into tiers (typically 1–5), with higher tiers requiring higher out-of-pocket costs.

• Prior authorizations and step therapy: Some drugs may require extra paperwork or proof of failure with other treatments.

• Limited quantity rules: Certain medications may have restrictions on how much can be dispensed at once.

The Impact of the $2,000 Out-of-Pocket Cap

A major shift in 2025 is the introduction of a $2,000 cap on out-of-pocket costs for prescription drugs under Medicare Part D. While this offers critical protection—especially for those with chronic conditions or high medication costs—it doesn’t guarantee that your costs will be low throughout the year.

What the Cap Does and Doesn’t Do

• It limits your total out-of-pocket spending on covered drugs to $2,000 in a calendar year.

• It doesn’t cover drugs not included on your plan’s formulary.

• It doesn’t reduce copays for every drug unless you hit the cap.

• It doesn’t exempt you from plan deductibles or cost-sharing responsibilities.

Misunderstanding the Formulary Can Be Expensive

Each PSHB plan with Part D drug benefits uses its own formulary—a list of medications that are covered and their tier placements. Many enrollees mistakenly assume that once they have a plan, all necessary medications will be affordable. In reality, small changes in the formulary year over year can result in significant cost differences.

In 2025, plans continue to update their formularies annually. If you haven’t reviewed your plan’s formulary since enrolling, you may be paying far more than you need to—or worse, you may not be getting coverage at all for certain medications.

Annual Notice of Change: What You Shouldn’t Ignore

Each fall, you receive an Annual Notice of Change (ANOC) from your PSHB plan. This document outlines the upcoming year’s changes in:

• Drug formulary

• Premiums and cost-sharing

• Pharmacy networks

• Utilization management policies

You should not discard this notice. The changes outlined may directly affect your drug costs starting January 1. Take time during the November–December Open Season to compare the details to your current medication needs.

Understanding Tier Structures in 2025

Most PSHB drug plans under Medicare Part D include 5-tier formularies:

1. Tier 1 – Preferred generic drugs (lowest cost)

2. Tier 2 – Generic drugs (still relatively low cost)

3. Tier 3 – Preferred brand-name drugs (moderate copays)

4. Tier 4 – Non-preferred brand-name drugs (higher copays)

5. Tier 5 – Specialty drugs (highest coinsurance)

Even if your drug is covered, its tier placement determines what you pay. Higher-tier drugs often have coinsurance instead of fixed copays, meaning your cost is a percentage of the total drug price.

This becomes especially important for high-cost specialty drugs. A 25% coinsurance on a medication that costs $800 per fill can add up quickly—even with the $2,000 cap.

The Role of Step Therapy and Prior Authorization

Plans often manage drug costs and safety through tools like:

• Step therapy: You must try lower-cost alternatives before a higher-cost drug is approved.

• Prior authorization: Your provider must get approval from the plan before the drug is covered.

These requirements can delay access and add administrative hurdles. If you rely on a specific medication, ensure it doesn’t require these extra steps—or be prepared to work with your provider in advance.

Retail vs. Mail Order Pharmacies

You typically have access to both retail and mail-order pharmacy options. Each comes with its own cost-sharing structure, refill policies, and delivery timelines.

• Mail order often provides 90-day supplies and may reduce long-term out-of-pocket costs.

• Retail pharmacies offer immediate access, but could come with higher per-fill prices, especially for specialty medications.

Depending on your medications and preferences, one may offer better convenience or savings than the other.

The Risk of Assuming Your Plan Will Stay the Same

Just because your PSHB plan worked for you last year doesn’t mean it will serve your needs this year. Medicare Part D plans—including those embedded in PSHB—change formularies, cost structures, and coverage rules every year.

If you don’t review your plan annually, you risk:

• Paying more out of pocket for the same drugs

• Losing coverage for a medication you depend on

• Missing out on better options that would lower your total costs

Open Season (from November to December) is your opportunity to reassess whether your current plan is still the best fit for your health and financial situation.

Why Reviewing Your Medication List Matters

Before Open Season, make a list of every prescription drug you take. Include the following for each:

• Exact name

• Dosage

• Frequency

• Current pharmacy

Use this list to compare against each PSHB plan’s formulary and cost-sharing structure. A single uncovered medication can cost hundreds—or even thousands—of dollars annually. Being proactive now prevents those surprises later.

Making the Right Fit for Your Needs in 2025

Not every drug plan will be right for every person. Even with the new protections introduced in 2025, selecting a plan that doesn’t align with your medications, usage, or preferred pharmacies could leave you spending more than necessary.

A better fit means:

• Your drugs are all on the formulary

• They are placed on lower tiers

• Your pharmacy is in-network

• You avoid prior authorization whenever possible

How to Get Help Before You Enroll or Renew

The decisions you make during Open Season affect your drug coverage—and your wallet—for the entire following year. If you’re unsure about how to compare plans, interpret formularies, or assess cost tiers, don’t go it alone.

Speak with a licensed agent listed on this website. They can help you:

• Review your current medications

• Compare available PSHB options

• Understand tier placement and out-of-pocket implications

• Make confident, informed choices for 2025

Getting the Drug Coverage You Actually Need

PSHB plans in 2025 offer powerful tools for Medicare-eligible enrollees, including integrated Part D coverage and a $2,000 spending cap. But having drug coverage doesn’t mean you have the right coverage. What matters most is whether your medications are covered, how they’re tiered, and what rules surround their approval.

By understanding these elements and acting during Open Season, you can ensure that your plan fits your needs—not just in theory, but in everyday cost and access. Don’t assume your plan is still working for you. Take control, check the details, and reach out for guidance if needed.

Get in touch with a licensed agent on this website for personalized assistance and ensure your 2025 PSHB coverage fits both your health and budget.