Costs for Part D prescription drug coverage are part of premiums under the PSHB program for postal retirees beginning in 2025. Image: Gregory C Sanders/Shutterstock.com
The 2025 Medicare Part B (physicians and related services) premium will be $185 per month for most enrollees, up from $174.40 a month this year. Those with annual taxable incomes above a threshold (which will be $106,000 for single filers and $212,000 for joint filers) also pay surcharges, which will range up to a total cost of $552.10 per month.
The Part B annual deductible will increase by $17 to $257.
In Part A, which covers hospitalization and related costs, the deductible will rise to $1,676, an increase of $44. Proportionate boosts also will apply to coinsurance for periods longer than 60 days per benefit period: for the 61st through the 90th day in a benefit period, to $419 per day, and beyond the 90th day, to $838 per day.
Costs for Part D prescription drug coverage are part of premiums under the Postal Service Health Benefits program for postal retirees beginning in 2025.
Federal retirees remaining in the FEHB, the premium will average about $45, although there is variation among plans, and a surcharge of up to $85.80 applies to higher-income retirees. However, federal retirees who have FEHB coverage typically do not enroll in Part D because prescription drug coverage is part of FEHB plan premiums.
Medicare and Federal Retirement
Medicare is a national health insurance for people 65 years of age and older, certain younger disabled people and people with kidney failure. Part A helps pay for care in a hospital, skilled nursing facility and for home health and hospice care. Part B helps pay doctor bills, outpatient hospital care and various other medical services not covered by Part A. A program of alternative medical care choices called Medicare Advantage is also called Part C and the prescription drug benefit program is called Part D.
Federal employees pay 1.45 percent of salary toward Medicare and become eligible for benefits under the same rules as other working Americans. Those still working past age 65 also are eligible, but they are free to remain instead under employer-sponsored health insurance, which many consider preferable, and later enroll in Medicare without penalty once they retire.
Medicare Coordinated Care Plans – MCCPs
A Medicare Coordinated Care Plan, or MCCP, is an HMO which contracts with Medicare to provide low cost, comprehensive health benefits coverage to enrollees. That’s for FEHB. For those under the Postal Service Health benefits program, Medicare and PSHB coverage are integrated.
Under FEHB, Medicare pays the MCCP 95 percent of the average cost it incurs in the area where the enrollee lives. Any retiree who wishes to leave the FEHB and enroll in an MCCP is free to do so. In order to do so without creating a gap in coverage, you must first enroll in an approved MCCP. Then you need to let OPM know that you have done so and want to drop your FEHB coverage solely for this reason. Make sure that OPM knows the exact date on which your MCCP coverage started. That way it can suspend your FEHB enrollment on the day before your MCCP coverage began.
PSHB/FEHB Switchover
As of January 1st, 2025, the Post Office is splitting off its group health plan from the rest of the federal government. The new group plan (PSHB) will cover USPS employees and retirees only and is under the umbrella of the Federal Employee Health Benefits (FEHB). This is the result of the Postal Service Reform Act of 2022 which was signed into law in April of 2022.
In most cases, this will be automatic. The USPS mailed out notices the week of November 4th letting participants know they’ll be “crosswalked” into the plan most similar to the one they had under the wider FEHB. Read more at 11 FAQs on PSHB Switchover here.
OPM Advises Agencies on Conducting RIFs During Shutdown
Updated Shutdown Contingency Plans Show Range of Impacts
Use Shutdown as Justification for More RIFs, OMB Tells Agencies
Unions Win a Round in Court Disputes over Anti-Representation Orders
Deferred Resignation Periods End for Many; Overall 12% Drop
Senate Bill Would Override Trump Orders against Unions
See also,
How to Handle Taxes Owed on TSP Roth Conversions? Use a Ladder
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025