Key Takeaways

• Medicare Part C (Medicare Advantage) may sound appealing, but it often creates coverage conflicts and cost confusion when combined with your Postal Service Health Benefits (PSHB).

• If you’re enrolled in PSHB and already have Medicare Part B, sticking with Original Medicare instead of Part C often results in smoother coordination, better drug coverage, and more predictable expenses.

The Allure of Medicare Advantage Plans

Medicare Part C, or Medicare Advantage, is marketed as an all-in-one alternative to Original Medicare. It bundles Medicare Part A, Part B, and often Part D (drug coverage) into a single private plan. Some plans advertise extra perks like dental, vision, or fitness programs. These benefits, along with the idea of streamlined coverage, draw in many retirees.

For PSHB enrollees, especially those new to Medicare, it may seem logical to switch to a Medicare Advantage plan to simplify their benefits. But in 2025, this can actually complicate your PSHB coordination and lead to surprise costs or denied claims.

How PSHB Works With Medicare

The PSHB program was launched in 2025 to replace FEHB for Postal Service employees and annuitants. It integrates more directly with Medicare than FEHB ever did, especially for retirees who are Medicare-eligible. If you’re enrolled in both PSHB and Medicare Part B, you typically receive the following advantages:

• Reduced or waived deductibles

• Lower copayments and coinsurance

• Better prescription drug benefits through an Employer Group Waiver Plan (EGWP)

• Enhanced cost-sharing protections

However, these benefits are optimized when you’re using Original Medicare (Parts A and B), not Medicare Advantage (Part C).

Coordination Challenges With Medicare Advantage

When you join a Medicare Advantage plan, you essentially leave Original Medicare. Your coverage is now managed by a private insurer, which controls networks, referrals, pre-authorizations, and even cost-sharing structures. This shift creates three major issues when paired with PSHB:

1. Limited Provider Networks

PSHB plans are national, with wide provider access. Medicare Advantage plans, on the other hand, often use HMO or PPO networks. If your preferred doctors or specialists are outside the Medicare Advantage network, you could face out-of-network charges or be denied coverage.

2. Service Denials and Prior Authorizations

Unlike Original Medicare, most Medicare Advantage plans require prior authorizations for certain procedures or hospital stays. This means care that would have been automatically covered under Original Medicare might be delayed or denied under Part C, even if your PSHB plan would have covered it.

3. Double Premiums Without Double Benefits

In 2025, PSHB plans still charge their standard premiums regardless of whether you use Original Medicare or Medicare Advantage. Medicare Advantage plans also come with their own monthly premiums and out-of-pocket costs. You end up paying both, without necessarily gaining additional value.

Prescription Drug Coverage Conflicts

Postal retirees with Medicare Part B are automatically enrolled in Part D drug coverage through their PSHB plan’s EGWP. This employer-sponsored Part D coverage offers:

• A $2,000 annual out-of-pocket maximum on prescription drugs (new in 2025)

• Access to a broad national pharmacy network

• Lower drug copays, especially for generics and chronic conditions

If you enroll in a Medicare Advantage plan that includes Part D, you could be forced to choose between that coverage and the PSHB-provided EGWP. Medicare rules don’t allow simultaneous enrollment in two Part D plans. Opting into a Medicare Advantage plan with drug coverage may disenroll you from your PSHB drug benefit.

This could leave you with higher drug costs or limited pharmacy access, especially if your Part C plan has a narrower formulary.

Medicare Advantage Does Not Coordinate With PSHB Cost Sharing

In a standard setup—PSHB + Original Medicare—your PSHB plan works as secondary insurance. Medicare pays first, then PSHB picks up much of what’s left.

But with Medicare Advantage, your plan is both your primary and secondary coverage. PSHB may not coordinate or reimburse costs under this structure. As a result:

• PSHB plan cost-sharing reductions may not apply

• You may lose access to waived deductibles and reduced copays

• You might not be reimbursed for services covered differently by your Medicare Advantage plan

The result? You could pay more than you would have under the Original Medicare + PSHB combination.

PSHB and Part C: An Uneasy Fit

The PSHB program was designed around the assumption that retirees would use Original Medicare in tandem with PSHB. In fact, certain PSHB benefits only activate when Medicare Parts A and B are in place—not when you substitute a Part C plan.

If you decline Original Medicare in favor of Part C, or enroll in a Medicare Advantage plan with limited coordination, you could lose access to:

• Full reimbursement of Medicare Part B premiums (available in some PSHB plans)

• Additional savings on hospitalization, skilled nursing, and outpatient care

• The full integration of Medicare claims into the PSHB processing system

What Happens If You Want to Switch Back

Medicare Advantage isn’t a permanent decision, but it does come with deadlines.

• Medicare Advantage Open Enrollment Period: January 1 through March 31 each year. You can switch to another Advantage plan or return to Original Medicare.

• Annual Enrollment Period: October 15 through December 7. Changes take effect January 1 of the following year.

If you drop your Medicare Advantage plan and return to Original Medicare, you may re-activate your PSHB coordination. But if your drug coverage was terminated, reinstating it could be delayed or denied depending on the timing and whether you opted out of EGWP.

So while switching back is possible, it’s not always smooth—and you may face gaps in drug or cost-sharing coverage.

What About the Perks?

Some Medicare Advantage plans in 2025 still offer extra benefits like:

• Vision and hearing aids

• Transportation to appointments

• Over-the-counter (OTC) allowances

However, many of these perks are limited in scope, available only in certain regions, or restricted by complex usage rules. More importantly, many PSHB plans already offer supplemental benefits of their own—or allow you to purchase dental/vision coverage through FEDVIP.

In many cases, you can get similar or better access by sticking with your PSHB plan and coordinating with Original Medicare.

Medicare Enrollment Requirements for PSHB in 2025

If you are a Postal Service annuitant or eligible family member and you became Medicare-eligible on or after January 1, 2025, you are generally required to enroll in Medicare Part B to maintain PSHB coverage.

There are a few exemptions:

• You retired on or before January 1, 2025

• You are a non-annuitant covered under someone else’s PSHB family enrollment

• You have access to other qualifying coverage (e.g., VA or Indian Health Services)

If you choose a Medicare Advantage plan instead of enrolling in Medicare Part B, you may not meet the requirement for PSHB coverage, which puts your health insurance at risk.

Make the Most of Your PSHB Coverage

Here’s how to optimize your coverage in 2025:

• Enroll in Original Medicare Parts A and B as soon as you’re eligible.

• Maintain your PSHB enrollment—this becomes your secondary coverage.

• Avoid Medicare Advantage (Part C) if you want to keep drug benefits, reduce out-of-pocket costs, and ensure full PSHB coordination.

• Review your options annually, especially during the October–December enrollment period.

• Consult with a licensed agent listed on this website for help evaluating your personal situation.

Think Long-Term, Not Just Short-Term Perks

Medicare Advantage plans can appear attractive at first glance. But when combined with PSHB, they often bring confusion, gaps in drug coverage, and loss of key cost-sharing advantages. The long-term financial impact may outweigh any temporary perks.

Don’t trade reliable coordination and predictable costs for benefits that sound good but don’t deliver where it matters most.

To protect your retirement coverage, stay informed, stick with Original Medicare, and get in touch with a licensed agent listed on this website if you’re unsure about your Medicare choices.