Key Takeaways

• While PSHB plans in 2025 can resemble Medicare Advantage plans in structure and benefits, they operate under a distinct framework tailored specifically for Postal Service employees and annuitants.

• Enrolling in Medicare Part B is still vital for most Medicare-eligible PSHB enrollees, as it unlocks enhanced benefits within the PSHB system that go beyond what Medicare Advantage typically offers.

Understanding the Comparison: PSHB and Medicare Advantage

You may hear that Postal Service Health Benefits (PSHB) plans in 2025 work just like Medicare Advantage plans. And while that’s partly true, it’s only accurate up to a point. PSHB plans are structured to integrate with Medicare—but they don’t replace it. More importantly, their rules, cost-sharing, and network structures differ in key ways from private Medicare Advantage plans.

Let’s break down where the similarities lie—and where the differences matter most.

What PSHB and Medicare Advantage Have in Common

At a glance, both PSHB plans and Medicare Advantage (Part C) plans share some features:

• Both coordinate with Medicare to provide comprehensive coverage.

• Each may include extra benefits like dental, vision, or hearing services.

• They often use provider networks for managing care.

• Both require continued Medicare Part B enrollment for those eligible.

But the way these benefits are implemented—and the rules governing them—set the two programs apart.

1. Who Provides the Coverage

Medicare Advantage plans are offered by private insurance companies approved by Medicare. Each company determines which counties and states their plans are available in and what features they include.

PSHB, however, is a federal program under the U.S. Office of Personnel Management (OPM), tailored exclusively for Postal Service employees, retirees, and eligible family members. While private carriers administer the plans, the structure and eligibility rules are guided by OPM regulations, not commercial market dynamics.

2. Medicare Enrollment Rules Are Different

In Medicare Advantage, your enrollment in a plan automatically becomes your Medicare coverage—you receive all Medicare Parts A and B services through that private plan. In contrast, PSHB doesn’t replace Medicare. Instead, your PSHB plan sits beside Original Medicare, and the two coordinate to share your healthcare costs.

Most Medicare-eligible annuitants and family members under PSHB in 2025 are required to enroll in Medicare Part B, unless they qualify for an exemption. This is different from traditional Medicare Advantage plans, which only work if you’re already enrolled in both Parts A and B.

3. Prescription Drug Coverage

Medicare Advantage plans typically include Part D drug coverage as part of the plan itself. PSHB plans in 2025 take a different route. They automatically provide drug coverage through a separate Medicare Part D Employer Group Waiver Plan (EGWP). This structure is designed specifically for postal retirees and their families.

The PSHB EGWP coverage includes key advantages:

• A $2,000 out-of-pocket cap on drug costs

• Automatic coordination with Medicare

• Access to a broad network of pharmacies

This differs from standard Medicare Advantage plans, which have varying Part D deductibles and coverage gaps.

4. Networks and Access to Care

In Medicare Advantage, you often choose between HMO or PPO-style plans. These plans come with specific provider networks, and out-of-network care may be limited or costlier.

With PSHB, provider flexibility depends on the specific plan you choose, but many plans offer wide national networks—particularly useful for retirees who move or travel. Because PSHB works in tandem with Medicare, Original Medicare rules still apply for covered services even when using out-of-network providers, reducing the risk of care disruptions.

5. Out-of-Pocket Costs: Caps, Deductibles, and Copays

Out-of-pocket costs in Medicare Advantage plans can vary widely. In 2025, the maximum allowable in-network out-of-pocket limit for Medicare Advantage plans is $9,350, with a combined in- and out-of-network cap of $14,000.

In comparison, PSHB plans typically offer a more predictable structure. For example:

• Out-of-pocket limits for PSHB plans in 2025 range from $5,000 to $7,500 for Self Only and $10,000 to $15,000 for family coverage.

• Deductibles may be lower in some PSHB plans, especially when coordinated with Medicare.

• Some plans waive or reduce copays and deductibles for enrollees who have Medicare Part B.

These cost-sharing reductions are a key reason why enrolling in Medicare—even if you already have a PSHB plan—is so strongly encouraged.

6. Who’s Eligible

Medicare Advantage plans are open to all Medicare beneficiaries, regardless of employer history, as long as they reside in the plan’s service area.

PSHB plans are exclusive. Only eligible Postal Service employees, retirees, and qualified family members can enroll. That exclusivity allows for benefits and pricing models that reflect the specific needs of the USPS workforce and retiree population.

7. Additional Benefits and Value-Adds

Both Medicare Advantage and PSHB plans may include additional benefits such as:

• Dental and vision care

• Hearing aids

• Wellness programs

• Telehealth services

But the scope and structure of these benefits often differ. PSHB plans are subject to government-negotiated terms and are not influenced by market competitiveness in the same way private Medicare Advantage plans are. In 2025, some Medicare Advantage plans are reducing access to supplemental services like transportation or OTC items, whereas PSHB plans remain relatively stable.

8. Plan Stability and Portability

Medicare Advantage plan features, costs, and availability can change annually. You may have to switch plans if a provider leaves the network or your area loses coverage.

PSHB plans are more stable. Since they’re not limited by county or zip code, you retain national access regardless of where you retire. Plan changes still occur during Open Season each year (November to December), but they tend to be less disruptive.

9. Coordination With Medicare: The PSHB Advantage

Perhaps the biggest distinction lies in how PSHB plans coordinate with Medicare. When you enroll in Medicare Part B, your PSHB plan becomes the secondary payer. This means:

• Medicare pays first.

• Your PSHB plan picks up most or all of what Medicare doesn’t cover.

This coordination significantly reduces your out-of-pocket burden. Some PSHB plans even reimburse part of your Medicare Part B premium—a benefit not typically offered in Medicare Advantage.

Also, unlike some Medicare Advantage plans that replace your Medicare card with a plan-specific one, you keep using your red-white-and-blue Medicare card with PSHB.

10. Enrollment and Transition Rules

Medicare Advantage enrollment is governed by national Medicare timelines—initial enrollment at age 65, annual enrollment from October 15 to December 7, and special enrollment periods.

For PSHB, the rules are a little different. If you’re already enrolled in an FEHB plan, you were automatically transitioned to a similar PSHB plan in 2025. You can make changes during Open Season each year, and qualifying life events allow adjustments outside that period.

If you’re becoming Medicare-eligible in 2025, your enrollment in Medicare Part B is critical to maintaining your full PSHB benefits. Skipping Part B may lead to higher out-of-pocket costs and limited drug coverage under the PSHB program.

Why This Comparison Matters in 2025

Understanding these differences isn’t just about trivia. It’s about making better choices with your health coverage in retirement.

While PSHB plans can resemble Medicare Advantage plans on the surface, their structure, protections, and cost-sharing policies offer more consistent value—especially when paired with Medicare Part B.

If you’re trying to decide what to do about Medicare, or evaluating whether your PSHB plan alone is enough, remember: these two systems are designed to complement each other—not compete.

Make the Most of Your PSHB and Medicare Benefits

You don’t need to make these decisions alone. The PSHB program is designed to work best when you’re informed and equipped to coordinate with Medicare the right way.

If you’re unsure about enrollment deadlines, cost-sharing details, or how your benefits will work together, reach out to a licensed insurance agent listed on this website. Getting help now could save you significant costs and confusion later.