How Medicare Part D will work in the future USPS insurance program

There are a few weeks left until the end Open season begins, the Office of Personnel Management is putting the finishing touches on how it plans to implement the Postal Service Health Benefit (PSHB) program for the USPS.

OPM’s final regulations for the PSHB program, which it published last weekMany of the technical factors required to run the program are detailed. Beginning in 2025, the PSHB program will cover nearly 2 million USPS employees, retirees and their families.

One part of the final rules that has attracted the attention of many stakeholders clarifies how Medicare Part D and prescription drug coverage will function for USPS annuitants and their Medicare-eligible family members. According to OPMPSHB plans must integrate Medicare Part D and offer prescription drug coverage to eligible Postal annuity beneficiaries through what is called an Employer Group Waiver Plan (EGWP).

During open season everything Medicare Eligibility Postal service retirees will be automatically enrolled in the EGWP through the PSHB program. The EGWP will include prescription drug coverage through Medicare Part D. Individuals who are not eligible for Medicare, such as those living overseas, will receive prescription drug benefits through their PSHB plan.

Notably, under the final rule, USPS Medicare-eligible enrollees who decline Part D coverage will lose access to any essential prescription drug coverage through PSHB. Despite concern arose in response to the proposed regulations, OPM maintained the same plans it originally proposed for the Part D waiver.

“OPM appreciates these comments and the thoughtful concerns they expressed,” OPM wrote in the final rule. “OPM believes that its proposed approach, namely that Postal Service annuitants eligible for Part D and their dependents eligible for the Medicare Part D plan offered by their PSHB plan, would lose prescription drug benefits medications within its PSHB plan is the most consistent. with the (Postal Service Reform Act) and its policy objectives.”

There will also be “seamless coordination” between PSHB and Medicare, and the cost of Part D will be included in the PSHB premium, OPM said. In other words, USPS retirees eligible for Medicare who decline Part D coverage will pay the same premium rate but will lose prescription drug benefits.

For this reason, OPM said it expects “very few” USPS annuity recipients and their family members to opt out of Medicare Part D.

“The vast majority of Part D eligible individuals would be better off maintaining PSHB prescription drug coverage,” OPM wrote.

Concerns about ‘choice taken away’ from USPS retirees

In reviewing OPM’s final rule, the National Association of Active and Retired Federal Employees (NARFE) questioned what the organization said was the “removal of choice” for prescription drug coverage for Medicare-eligible Postal retirees.

IN letter to OPM dated October 28NARFE National President William Shackelford said there may be some circumstances where people consider a PSHB plan to be a better alternative to a Medicare Advantage plan. For example, some members may consider opting out of Part D to avoid the Income Related Monthly Adjustment Amount (IRMAA) or to be able to use prescription drug coupons.

“If the benefits of (Medicare PDP) coverage in reducing an individual’s drug costs are outweighed by income-based Medicare premium surcharges or the inability to combine drug company rebates with insurance coverage, some Postal retirees would be better off keeping their PSHB plans for drug coverage,” Shackelford wrote. “However, the OPM final rule forces these Postal retirees to accept a more expensive option or lose their drug coverage through PSHB altogether.”

But some federal benefits experts say that even when IRMAA fees and drug coupons are taken into account, the cost savings are unlikely to outweigh the benefits of staying on Medicare. In terms of costs, some experts say Postal Service retirees typically Better to keep Medicare Part D.

Added some flexible features to help correct “bugs”.

Typically, Postal members will only be able to make changes to their entries during open season or if they have a qualifying life event, such as a wedding or the birth of a child. Outside of these cases, PSHB participants will maintain their selected enrollment through the 2025 plan year.

But several commenters on OPM’s proposed PSHB rules expressed concern about the possibility that some annuitants would opt out of Medicare Part D without realizing it. all the consequences — that they would lose prescription drug coverage while still paying the same premium rate.

In the PSHB final rule, OPM made one amendment to try to combat what the agency said is a “high risk of confusion” on the part of USPS annuitants regarding the rules surrounding Medicare Part D. The new flexibility included in the final rule is intended to prevent “potential consequences” that Medicare-eligible annuitants could face depending on their decisions during open season.

OPM said annuitants who opt out of Part D “due to error” will potentially have some flexibility to change their enrollment outside of open season. If it is determined that there was an error in registration, the participant will be given 90 days, or in some cases more, to make another choice.

OPM did not specify what the “error” would entail, but said it would make “extensive” use of PSHB enrollment flexibility during the initial plan year of the PSHB program. However, flexibility is limited only to new EGWP Part D registrations, OPM said.

“OPM is committed to ensuring that anyone who opts out does so based on an informed understanding of the consequences, and that anyone who opts out in error can correct their EGWP Part D enrollment,” OPM wrote.

During open season, which this year runs from Nov. 11 to Dec. 9, postal employees and annuitants will have time to review their records and, if they choose, make changes to their health insurance options. Federal Employees Health Benefits (FEHB) members can also review and make changes to their records during open season.

Postal Service members who do not make an election during the open season will be automatically enrolled in the same plan they had through FEHB, as long as the same carrier is a member of the new PSHB program. If there is no equivalent plan option, Postal members will be automatically enrolled in the lowest cost option for which they are eligible.