Key Takeaways

• Medicare Part C (Medicare Advantage) plans may seem attractive, but they don’t always work well with your PSHB benefits in 2025.

• Choosing a Medicare Advantage plan instead of traditional Medicare with PSHB can result in gaps in coverage, higher out-of-pocket costs, or limited provider networks.

Understanding Medicare Part C in 2025

Medicare Part C, also known as Medicare Advantage, bundles Medicare Part A and B—and usually Part D—into one privately administered plan. These plans often include extras like dental, vision, or wellness benefits. But they’re not always the best fit if you’re enrolled in the Postal Service Health Benefits (PSHB) Program.

As of 2025, the integration between PSHB and Medicare remains strongest with Original Medicare (Parts A and B), not Medicare Advantage. If you’re a PSHB enrollee or annuitant considering switching to a Medicare Advantage plan, it’s essential to understand what you might give up.

How PSHB Coordinates with Original Medicare

The PSHB program was designed with coordination in mind—specifically, with Original Medicare. When you enroll in Medicare Part A and Part B:

• Medicare becomes your primary payer.

• PSHB acts as your secondary payer, covering remaining eligible costs.

• Many PSHB plans waive or reduce deductibles and copayments if you have Medicare.

This coordination provides dual coverage, which minimizes your out-of-pocket costs and maximizes access to care. In 2025, this synergy continues to offer solid protection—particularly for hospitalization, outpatient visits, and prescription drugs under Part D through EGWP (Employer Group Waiver Plan).

What Happens If You Choose Medicare Advantage Instead

When you enroll in a Medicare Advantage plan, you are no longer using Original Medicare for your healthcare services. Instead:

• The private insurer pays for your healthcare, not Medicare.

• PSHB becomes a secondary supplement to the private plan—but not always in the way you expect.

• You may experience limited provider networks, plan-specific referrals, and different billing rules.

Additionally, if you opt into a Medicare Advantage plan, your PSHB plan may not coordinate benefits the same way it does with Original Medicare. In fact, some PSHB plans will not pay secondary benefits at all when you’re in Medicare Advantage.

1. Reduced Flexibility with Providers

Medicare Advantage plans tend to have narrower provider networks. You may be required to:

• Use doctors within the plan’s local network.

• Get referrals for specialist visits.

• Use specific hospitals and outpatient facilities.

If your preferred physician doesn’t participate in your plan’s network, you could face high out-of-pocket costs—or have to switch providers.

By contrast, PSHB combined with Original Medicare allows you to see any provider who accepts Medicare nationwide. This is especially valuable if you travel or live in more than one location.

2. Out-of-Pocket Costs May Be Higher

Although Medicare Advantage plans often advertise low premiums, they typically require:

• Copayments for primary and specialist visits.

• Coinsurance for hospital stays and durable medical equipment.

• Yearly out-of-pocket maximums that vary by plan.

In 2025, the PSHB system still offers generous coverage when paired with Original Medicare. For many enrollees, this combination results in less cost sharing, especially if the PSHB plan reduces your deductible when Medicare pays first.

Medicare Advantage plans may duplicate coverage or limit how much the PSHB plan helps, leaving you to pay more out-of-pocket than expected.

3. Prescription Drug Coordination Challenges

When you stay in Original Medicare with PSHB, your drug coverage comes through a coordinated Part D EGWP. This ensures:

• Lower out-of-pocket drug costs.

• A $2,000 out-of-pocket cap in 2025 under the new Medicare drug payment rules.

• Automatic enrollment and integration with your PSHB plan.

Switching to Medicare Advantage means your drug coverage typically comes from the private plan. This switch:

• Disrupts the PSHB-EGWP connection.

• Could affect your access to certain pharmacies or drugs.

• May prevent you from receiving the same prescription benefits coordination.

4. Limited Value from PSHB Plan if You Choose Part C

In some cases, once you enroll in a Medicare Advantage plan, your PSHB plan won’t coordinate at all. You could end up paying two full premiums—for the PSHB plan and the Advantage plan—without receiving meaningful secondary benefits.

Additionally, because you’re outside the Original Medicare system, you may lose access to:

• PSHB’s secondary payment structure.

• Integrated claims processing.

• Plan discounts or cost-sharing waivers tied to Parts A and B.

By stepping away from Original Medicare, you may be reducing the value of your PSHB enrollment.

5. Enrollment Rules and Switching Limitations

Medicare Advantage enrollment is governed by specific timeframes:

• Initial Enrollment Period: 7 months surrounding your 65th birthday.

• Open Enrollment Period: October 15 to December 7 annually.

• Medicare Advantage Open Enrollment: January 1 to March 31 (switch or drop MA plans).

If you make the switch and then regret it, you may not be able to rejoin Original Medicare with full coordination during the rest of the year. Worse, re-enrolling in Part D (for drugs) could be delayed or restricted.

PSHB works best when integrated with Medicare Parts A and B from the start. Waiting or switching back and forth can introduce coverage gaps and higher costs.

6. Differences in Prior Authorization and Claims Processing

Another factor to consider in 2025 is how services are approved. Medicare Advantage plans often require prior authorization for services like:

• Inpatient hospital admissions.

• MRIs, CT scans, and other imaging.

• Skilled nursing facility stays.

Delays in approvals can affect when and where you receive care.

PSHB plans working alongside Original Medicare typically don’t require these approvals because Medicare already authorizes the service. The claims process is faster, smoother, and more predictable.

Why PSHB Encourages Part B Enrollment

The PSHB system was restructured to work seamlessly with Original Medicare. In fact, most PSHB enrollees are encouraged—or even required—to enroll in Medicare Part B when they become eligible. This is especially true for:

• Annuitants who retired after January 1, 2025.

• Family members of annuitants who are Medicare-eligible.

Failure to enroll in Part B can result in:

• Higher costs.

• Reduced or lost benefits.

• In some cases, termination of PSHB medical and drug coverage.

Medicare Advantage does not meet this requirement. Even if you enroll in a private plan, you must still have Part B to retain your PSHB coverage if you fall under the 2025 rule.

What to Consider Before Choosing a Medicare Advantage Plan

Before making the switch, ask yourself:

• Will my PSHB plan still coordinate benefits?

• Do I understand the provider network and service area restrictions?

• Are my prescription drugs covered, and what will they cost?

• Will I need referrals for specialists?

• What happens if I move or travel?

• Am I eligible to return to Original Medicare without penalty if I change my mind?

Staying with Original Medicare Often Means More Predictability

In 2025, PSHB remains most effective when layered on top of traditional Medicare. Together, they provide:

• Broad provider access.

• Coordinated prescription coverage.

• Fewer prior authorizations.

• Predictable claims handling.

• Enhanced cost-sharing benefits.

While Medicare Advantage plans may appear appealing at first glance, they rarely deliver the same seamless integration with PSHB that Original Medicare does.

Make Sure You’re Coordinated for 2025 and Beyond

As a PSHB enrollee or annuitant, it’s critical to consider how each Medicare path interacts with your benefits. Medicare Part C plans might advertise extra perks, but these can come with trade-offs—especially when it comes to PSHB coordination.

Speak with a licensed agent listed on this website before making any decisions. They can help you:

• Understand your eligibility.

• Review your current PSHB plan’s coordination rules.

• Evaluate your options based on your specific healthcare needs.

Don’t make assumptions. Make informed choices.