PSHB & Medicare Part D

The Medicare Part D prescription drug program benefits millions of Americans. It fills a major hole in Medicare that lasted 50 years. But, historically, it would rarely benefit federal retirees who have prescription drug coverage from their former employer. This has now radically changed. Congress passed legislation in 2022 that strengthens Part D through several reforms, most importantly improving its catastrophic cost protection to an annual maximum out-of-pocket prescription drug expense of $2,000, beginning in 2025.

Every PSHB plan will offer a Part D Prescription Drug Plan (PDP) where Medicare eligible USPS annuitants and family members will be auto-enrolled in the PDP plan. USPS annuitants retain the option to opt-out of Part D, but if they do they receive no prescription drug benefits from their PSHB plan.

To be approved by OPM, the prescription drug benefits from the PDP must be as good or better than the prescription drug benefits from the PSHB plan.

Here are three things you need to know about Part D coverage:

• While there is no extra Part D premium for annuitants with income below the IRMAA threshold ($106,000+ single, $212,000+ couple), annuitants above the IRMAA threshold will have to pay IRMAA with Part D coverage. Part D IRMAA is far less than Part B IRMAA, however, $13.70/month compared to $74/month in the first tier of Part B IRMAA.
• Some annuitants may use prescription drug discount cards from drug manufacturers. When you have Part D coverage, you lose access to drug manufacturer discount programs.
• If you spend time overseas, PDPs will not provide prescription drug coverage while you're overseas. If you are traveling overseas, most travel insurance policies provide coverage for health care expenses not covered by your health plan.