Key Takeaways

• Medicare Part B covers a wide range of outpatient and physician services, but many services come with hidden costs that can catch you off guard if you’re only relying on Medicare.

• As a Postal Service Health Benefits (PSHB) enrollee, you need to understand how your PSHB plan coordinates with Medicare Part B to avoid unexpected bills and gaps in coverage.

What Medicare Part B Covers

Medicare Part B, as of 2025, continues to serve as the part of Medicare that covers outpatient medical care. Unlike Part A, which deals with hospital stays and inpatient services, Part B focuses on services you receive outside of hospital admissions. Here’s what that includes:

Physician Services

Medicare Part B pays for medically necessary services or tests ordered by a physician. This includes:

• Doctor’s office visits

• Specialist consultations

• Preventive screenings (such as mammograms and colonoscopies)

• Outpatient surgeries

• Second opinions before surgery

Durable Medical Equipment (DME)

Part B also covers medically necessary durable medical equipment when prescribed by a doctor. Examples include:

• Walkers

• Wheelchairs

• Oxygen equipment

You usually pay 20% of the Medicare-approved amount for this equipment after meeting your annual deductible.

Diagnostic Tests and Lab Work

If your doctor orders a blood test, imaging scan, or other diagnostic procedure, Part B typically covers it. Examples include:

• Bloodwork and urinalysis

• MRIs, CT scans, and X-rays

• EKGs

However, these tests are not always fully covered, and additional charges may apply depending on where they are performed.

Mental Health Services

Mental health support is included in Part B coverage. You are entitled to:

• Therapy and counseling sessions (individual or group)

• Psychiatric evaluations and medication management

• Annual depression screenings

There are limitations, however, such as the type of provider and setting of care.

Preventive Services

Medicare Part B places a strong emphasis on prevention. Some of the no-cost preventive services include:

• Annual wellness visit (once every 12 months)

• Vaccinations (flu, COVID-19, hepatitis B)

• Screenings for cancer, cardiovascular issues, and diabetes

Even though these are labeled as preventive, additional services ordered during the visit may incur costs.

Outpatient Emergency and Urgent Care

If you’re treated at an emergency room or urgent care center and not admitted, Part B generally covers the services you receive. But your financial responsibility depends on:

• Whether the provider accepts Medicare assignment

• What additional tests or treatments are performed

The Costs You Don’t See Coming

Many enrollees assume that once they pay the standard Part B premium and deductible, they’re financially protected. Unfortunately, that’s far from the full story. Here’s where unexpected bills may creep in:

1. 20% Coinsurance on Most Services

After meeting the annual Part B deductible ($257 in 2025), you’re responsible for 20% of the Medicare-approved amount for most services. There’s no cap on your annual out-of-pocket costs under Original Medicare alone. That means a serious illness or extended outpatient treatment could result in thousands of dollars in bills.

2. Excess Charges

Some healthcare providers do not accept Medicare assignment and may bill up to 15% more than the Medicare-approved rate. These are called “excess charges,” and they are your responsibility unless you have secondary coverage, such as a PSHB plan, that handles them.

3. Observation vs. Inpatient Status

If you’re in a hospital under “observation” status instead of being formally admitted, Part B covers your stay, not Part A. That can result in:

• Higher out-of-pocket costs

• Denied claims for follow-up skilled nursing care

This distinction is often missed, and you might not be told your status unless you ask.

4. Non-Covered Services

Even though Part B is broad, it doesn’t cover:

• Routine dental, vision, or hearing care

• Prescription drugs (outside of specific doctor-administered medications)

• Most long-term custodial care

Without supplementary insurance, you’ll be responsible for the full cost of these services.

5. Facility Fees and Ambulatory Charges

Many outpatient settings like hospital-owned clinics or surgical centers charge facility fees in addition to physician fees. Part B may not cover these fully, leading to extra charges even for routine procedures.

How PSHB Coordinates With Part B

If you’re a Postal Service retiree or annuitant enrolled in both Medicare Part B and a PSHB plan, you benefit from coordination of benefits. But how that coordination works varies by plan, and understanding the interplay is critical to controlling your costs.

Cost-Sharing Reduction

Many PSHB plans reduce your copayments, deductibles, or coinsurance amounts if you also have Medicare Part B. For example:

• Some plans waive the annual deductible

• Others cover the 20% coinsurance that Medicare does not

• A few plans may even reimburse part or all of your Part B premium

These savings only apply if you’re enrolled in both Medicare and your PSHB plan.

Medicare as Primary, PSHB as Secondary

In most cases, once you retire and enroll in Medicare Part B, Medicare becomes your primary payer. PSHB becomes secondary and pays after Medicare, which can significantly reduce your costs. But if you haven’t enrolled in Part B, your PSHB plan becomes primary, and your cost-sharing may increase.

Provider Networks Still Matter

Even with dual coverage, you must use in-network providers when required by your PSHB plan. If you go out of network and the provider does not accept Medicare, neither Medicare nor your plan may pay, or your reimbursement may be reduced.

Timing and Enrollment Matters

Your coordination benefits only begin once you’re properly enrolled in Medicare. That’s why it’s important to know the deadlines and enrollment periods:

Initial Enrollment Period (IEP)

Starts 3 months before the month you turn 65 and lasts 7 months total (3 months before, the month of, and 3 months after your birthday month). Missing this window can mean late enrollment penalties.

Special Enrollment Period (SEP)

If you delay Medicare Part B because you’re still working and covered by your PSHB plan, you can enroll later without penalty during the SEP, which starts when your employment or employer coverage ends.

General Enrollment Period (GEP)

If you miss your IEP or SEP, the GEP runs from January 1 to March 31 each year. Your coverage starts July 1, and late penalties may apply for each 12-month period you were eligible but didn’t enroll.

What Happens If You Only Have PSHB

It’s possible to remain on your PSHB plan and skip Medicare Part B, but this comes with trade-offs:

• Your PSHB plan becomes your sole coverage, and you may face higher out-of-pocket costs.

• You could lose out on enhanced coordination benefits such as waived deductibles or lower copays.

• Your premium costs may not decrease even though you’re missing out on Medicare cost sharing.

Moreover, if you later decide to enroll in Part B, you may have to wait until the next General Enrollment Period and pay late enrollment penalties.

What to Do Before You Turn 65

If you’re a Postal retiree or planning to retire soon, here are the steps you should take to avoid hidden costs:

• Review your PSHB plan’s policy on Medicare coordination.

• Use the OPM and PSHB resources to verify what your plan pays after Medicare.

• Confirm your Medicare eligibility and sign up during your Initial Enrollment Period if you’re not actively working.

• Check whether your plan offers Part B premium reimbursement or special benefits for dual enrollees.

• Call your provider to confirm they accept both Medicare and your PSHB plan.

Understanding the Trade-Offs Saves You Money

Knowing what Medicare Part B actually covers and how it works with your PSHB plan can save you thousands of dollars. Too many retirees assume their needs will be fully covered, only to discover the limits of Medicare after the bills arrive. With 2025 well underway, now is the time to review your coverage, prepare for your enrollment deadlines, and ask detailed questions about cost-sharing rules.

Before making decisions about enrollment or delaying Medicare, speak to a licensed agent listed on this website. They can help you assess your total costs and avoid expensive missteps.