Key Takeaways

• Medicare Advantage plans may sound like a convenient all-in-one option, but for PSHB enrollees in 2025, they often come with limitations that affect access, costs, and coverage.

• Understanding how PSHB works with Original Medicare and Medicare Part D provides more predictable cost-sharing and often more robust benefits, especially when you’re dealing with chronic conditions or high prescription drug needs.

Medicare Advantage Plans Aren’t One-Size-Fits-All

Medicare Advantage plans continue to gain popularity due to their bundled services and promises of extra perks. But what’s less discussed are the trade-offs involved, especially for Postal Service Health Benefits (PSHB) annuitants and retirees in 2025. If you’re eligible for Medicare and considering how PSHB fits into your retirement health strategy, it’s essential to understand how Medicare Advantage differs from your other options.

While a Medicare Advantage plan may sound attractive due to its consolidated coverage, it’s not always the most practical or cost-effective choice—especially when compared to Original Medicare paired with a PSHB plan that integrates with Medicare.

How Medicare Advantage Plans Are Structured

Medicare Advantage, also known as Medicare Part C, is offered by private insurers. These plans are required to provide at least the same coverage as Original Medicare (Parts A and B), but they can also include additional benefits like vision or dental, sometimes bundled in.

In 2025, the key characteristics of Medicare Advantage plans include:

• Annual maximum out-of-pocket limits (MOOP) of up to $9,350 for in-network services

• Requirement to use provider networks (often HMOs or PPOs)

• Plan-specific rules for referrals and prior authorizations

• Copayments and coinsurance for nearly every service, including hospital stays and specialist visits

These features can create challenges if you travel frequently, live in rural areas with fewer network options, or require specialized care not available in-network.

How PSHB and Original Medicare Work Together

If you are a Medicare-eligible annuitant in the PSHB program, your path looks different. You keep your PSHB plan and enroll in Original Medicare. When used together, Medicare becomes your primary payer and PSHB your secondary. This setup can significantly reduce your out-of-pocket expenses.

For 2025, this pairing offers major advantages:

• Lower copayments and coinsurance due to coordination between Medicare and PSHB

• Waived or reduced deductibles under many PSHB plans when Medicare Part B is also in place

• Nationwide access to providers who accept Medicare without network restrictions

• Automatic prescription drug coverage through the integrated Medicare Part D Employer Group Waiver Plan (EGWP)

Mandatory Medicare Enrollment for Some

Starting in 2025, Medicare Part B enrollment is required for certain PSHB annuitants and their covered family members to maintain health benefits. This rule applies unless you qualify for an exception such as retiring before January 1, 2025, or being age 64 or older on that date.

If you are required to enroll and fail to do so, you risk losing your PSHB coverage. Opting into a Medicare Advantage plan instead of Original Medicare could result in higher out-of-pocket costs and lost coordination benefits unless you remain enrolled in your PSHB plan.

Prescription Drug Coverage: A Key Difference

One of the most significant benefits of staying in the PSHB program while enrolled in Medicare is your prescription drug coverage. As a PSHB enrollee, your plan automatically includes Medicare Part D through an EGWP, which provides comprehensive and coordinated drug benefits.

As of 2025:

• Your annual out-of-pocket limit for prescription drugs is capped at $2,000

• Insulin costs are capped at $35 per month

• You can spread drug costs evenly over the year using the new Medicare Prescription Payment Plan

In contrast, many Medicare Advantage plans come with separate Part D rules, network pharmacies, and formularies that may not align with your needs. Prior authorizations, step therapy, and limitations on high-cost medications are more common.

What Happens to Your Provider Choice

If you stay with Original Medicare and a PSHB plan, you can see any provider who accepts Medicare, nationwide. You don’t have to worry about whether your doctor is “in-network” because Medicare doesn’t operate on a network-based model.

Medicare Advantage plans, however, usually require you to:

• Use a narrow network of providers

• Obtain referrals to see specialists

• Get prior authorization for many services

This can mean longer wait times, denied services, or switching providers if yours isn’t in-network or leaves the plan mid-year.

Financial Predictability vs. Surprise Costs

Postal retirees value cost predictability in retirement. With PSHB plus Original Medicare, your costs are more transparent. Medicare pays first, your PSHB plan pays second, and you are often left with minimal or no bill. Many PSHB plans waive your deductible and lower your copays entirely once Medicare is in place.

In contrast, Medicare Advantage plans often require:

• Copays for every service, even preventive care in some plans

• Separate deductibles for medical and drug coverage

• Out-of-pocket expenses that accumulate quickly with ongoing medical needs

While Medicare Advantage plans promote an annual MOOP, reaching that limit typically means you’ve already spent thousands.

Supplemental Benefits Sound Nice—but Often Come With Limits

Many Medicare Advantage plans advertise extras like dental, vision, hearing, gym memberships, or over-the-counter allowances. But in 2025, these benefits are shrinking. The share of plans offering over-the-counter benefits dropped from 85% in 2024 to 73% in 2025. Transportation benefits also declined.

PSHB plans, especially when paired with Medicare, offer more consistent coverage for medical needs, and you retain the option to enroll in separate FEDVIP plans for dental and vision—plans that provide nationwide access and predictable benefits.

Switching Between Medicare Options Isn’t Always Simple

Medicare Advantage plans typically lock you in for the year. Unless you qualify for a Special Enrollment Period, you can only make changes during Medicare’s Open Enrollment from October 15 to December 7.

If you decide a Medicare Advantage plan isn’t working, you might have to wait months to return to Original Medicare and PSHB coordination. And if you opt out of your PSHB plan while joining a Medicare Advantage plan, re-enrollment options are limited.

In contrast, staying enrolled in PSHB and Original Medicare keeps your choices open. Your coverage continues uninterrupted, and your coordination of benefits remains intact. That flexibility is hard to regain once forfeited.

Understanding the Full Cost Picture

It’s easy to focus on what looks convenient or low-cost upfront. But the deeper you go into a Medicare Advantage plan’s fine print, the more you may find:

• Higher long-term costs if you need frequent care

• More barriers to accessing treatment

• Less flexibility to see your preferred doctors or facilities

When you compare that to the pairing of PSHB with Original Medicare—especially with waived deductibles, lower coinsurance, and broader access—the difference becomes clearer.

How 2025 Changes Reinforce the Value of Staying With PSHB

The introduction of mandatory Medicare Part B enrollment for certain PSHB annuitants in 2025 reinforces a coordinated model. This design isn’t accidental. It’s built to maximize the value of Medicare by aligning it with the strong benefits of PSHB.

When you pair the two, you get:

• Lower cost-sharing on doctor visits, hospital stays, and preventive care

• Continued prescription drug coverage under Medicare Part D through PSHB

• Better financial protection through waived deductibles and capped drug costs

• Access to thousands of providers nationwide without needing referrals

That’s not just a safety net—it’s a stable and predictable health plan for your retirement years.

Think Twice Before You Leave the PSHB Framework

Medicare Advantage plans might market themselves as easier, simpler, or more affordable. But for PSHB enrollees, they often mean sacrificing the very benefits that make your healthcare stable and comprehensive.

If you’re considering making a change this year, take a step back and review your plan documents. Understand what you might be giving up. Evaluate how your medical needs have evolved. Consider what coordination of benefits actually looks like with PSHB and Medicare. Then make your choice.

For most Postal Service retirees, staying enrolled in PSHB and adding Original Medicare is still the path that delivers real value—not just surface-level convenience.

Your Healthcare in Retirement Deserves More Than a Sales Pitch

You’ve worked for years earning your benefits. Now isn’t the time to gamble on promises that may not line up with reality. Medicare Advantage plans can look attractive, but for PSHB annuitants in 2025, they often fall short in key areas like provider access, drug coverage, and financial predictability.

If you’re unsure about what’s best for your needs, get in touch with a licensed agent listed on this website who understands both Medicare and PSHB. You don’t have to make this decision alone.