Key Takeaways

• Medicare Part C (also known as Medicare Advantage) may seem simpler and more consolidated, but the convenience often comes with limitations in provider access, prior authorization hurdles, and high out-of-pocket caps.

• If you’re a Postal Service Health Benefits (PSHB) enrollee considering Medicare Advantage, it’s essential to weigh your long-term costs, freedom to choose providers, and coordination with Medicare Part B before switching away from Original Medicare.

What Medicare Part C Actually Is

Medicare Part C, or Medicare Advantage, is a private alternative to Original Medicare. Instead of enrolling in Medicare Part A and Part B separately, you opt into a bundled plan offered by a private insurer approved by Medicare. These plans must provide at least the same coverage as Original Medicare, but many go beyond the basics with additional benefits like dental, vision, and hearing services.

However, while Part C appears to offer more value on the surface, it operates under a completely different set of rules that can impact how and where you receive care. Understanding these tradeoffs is especially important if you’re also enrolled in or eligible for the Postal Service Health Benefits (PSHB) Program.

How PSHB and Medicare Coordinate

PSHB is replacing FEHB coverage for USPS employees and retirees starting in 2025. For annuitants who are Medicare-eligible, coordination with Medicare becomes critical. If you enroll in Original Medicare (Part A and Part B), your PSHB plan will act as secondary coverage. In this structure:

• Medicare pays first,

• PSHB pays second,

• Your out-of-pocket costs are significantly reduced.

But if you enroll in a Medicare Advantage plan, coordination changes. Most Part C plans act as a standalone replacement for Original Medicare, which means PSHB may not be secondary in the same way. This can affect:

• Your provider network,

• Drug coverage,

• Deductibles and copayments,

• How your claims are processed.

The Limits Behind the Simplicity

Medicare Advantage is often marketed as a streamlined, all-in-one solution. For some, that is true. But there are tradeoffs to this simplicity.

1. Restricted Provider Networks

Unlike Original Medicare, which allows you to see any provider who accepts Medicare, Part C plans use network-based care models. Most operate as HMOs or PPOs. If you choose an HMO, you’re typically required to:

• See in-network providers,

• Get referrals for specialists,

• Follow plan-specific rules for coverage.

This can be limiting if you travel, split your time between states, or want to access providers not contracted with your plan.

2. Prior Authorization Delays

Medicare Advantage plans frequently require prior authorization before covering services like:

• Imaging studies (CT, MRI, PET),

• Outpatient surgeries,

• Durable medical equipment,

• Home health care.

According to recent oversight reviews, prior authorization is one of the most significant barriers in Part C plans. These delays can result in postponed treatments or denied services, even when they are medically necessary.

3. Out-of-Pocket Maximums That Still Hurt

While Medicare Advantage plans have an annual out-of-pocket cap (in 2025, this is $9,350 for in-network care), this protection comes with nuance. Many enrollees still:

• Pay high copays for specialists, outpatient surgeries, and hospital stays,

• Face steep costs if they go out-of-network (especially in PPOs),

• Encounter cost-sharing surprises for post-acute care or infusions.

And although there is a cap, reaching it during a year of serious illness can be financially draining.

4. Non-Uniform Benefits

Part C plans are not standardized. Each plan can design its own benefit structure, provider network, and drug formulary. This variability means:

• You may receive more coverage in some areas (like dental) but less in others (like oncology care),

• Coverage can change annually,

• Comparing plans becomes difficult without full documentation.

If you’re in PSHB, which provides federally regulated and relatively uniform benefits, this level of inconsistency may be frustrating.

Coordination with Medicare Part B and PSHB

As of 2025, certain PSHB annuitants and family members must enroll in Medicare Part B to maintain their PSHB benefits. If you skip Part B, your PSHB coverage may be suspended or limited. However, enrolling in a Medicare Advantage plan also requires Part B.

This means:

• You’re still paying the monthly Part B premium (currently $185 in 2025),

• You may also have a monthly Part C premium (not always, but often),

• You may not benefit from the cost-sharing advantages PSHB offers when paired with Original Medicare.

PSHB plans are designed to work best when Medicare pays first. When you divert your primary coverage to Medicare Advantage, you may forgo certain PSHB savings such as:

• Waived deductibles,

• Lower copayments,

• Drug coverage coordination through Medicare Part D EGWP (Employer Group Waiver Plan).

Prescription Drug Coverage Isn’t Always Automatic

Many Part C plans include prescription drug coverage (called MA-PD plans), but not all do. If you enroll in a Part C plan without prescription coverage and then try to enroll in a standalone Part D plan, you may face complications, as standalone Part D plans typically do not pair with Part C.

Meanwhile, PSHB plans for Medicare-eligible members include integrated drug coverage through a Medicare Part D EGWP, which:

• Caps annual out-of-pocket drug costs at $2,000,

• Offers a $35 monthly insulin cap,

• Coordinates with the PSHB medical plan seamlessly.

By switching to Medicare Advantage, you risk losing access to this integrated and generous drug benefit structure.

Supplemental Benefits: Helpful or Gimmicky?

Medicare Advantage plans often advertise extras like:

• Gym memberships,

• Vision, dental, and hearing care,

• Transportation assistance,

• OTC allowances.

These are attractive, but you should ask:

• Are they available year-round?

• Do they meet your actual medical needs?

• Are they worth the tradeoff of limited medical networks or higher cost-sharing?

For instance, in 2025, the number of Medicare Advantage plans offering OTC benefits has dropped to 73% (down from 85% in 2024), and transportation benefits are now included in just 30% of plans. These benefits are not guaranteed and can be removed or limited each year.

Enrollment and Switching Rules

If you enroll in a Medicare Advantage plan during your Initial Enrollment Period (IEP) around age 65 or later during the Annual Enrollment Period (October 15 to December 7), be aware of the following rules:

• If you switch back to Original Medicare after 12+ months, you may not be guaranteed acceptance into a Medigap plan.

• You can switch from one Medicare Advantage plan to another during Open Enrollment or the Medicare Advantage Open Enrollment Period (January 1 to March 31), but options may be limited.

Once you’re in a Medicare Advantage plan and drop your PSHB coordination, undoing that decision can be complex and may require waiting for Open Season or a qualifying life event.

Long-Term Planning Considerations

If you’re approaching retirement and considering your Medicare options, think beyond just monthly premiums. Evaluate:

• How frequently you need care,

• Whether your preferred doctors accept Medicare Advantage plans,

• The likelihood of traveling or living in multiple states,

• How your PSHB benefits change when Medicare Advantage becomes your primary coverage.

While Medicare Advantage might appear to offer broader benefits at a glance, it could cost more in the long run—especially when compared to the value of PSHB working with Original Medicare.

What to Keep in Mind as a PSHB Enrollee

If you’re eligible for PSHB and Medicare, here’s what you should factor in:

• PSHB plans are designed to coordinate effectively with Original Medicare (Parts A and B).

• The integrated Medicare Part D drug benefit within PSHB plans is not replicated in most Medicare Advantage plans.

• PSHB may offer better financial protection when used as secondary insurance, especially for inpatient care, outpatient surgery, and skilled nursing facilities.

• Medicare Advantage plans require navigating separate networks and rules, which may add administrative hurdles.

The Best Outcomes Come from Informed Choices

Choosing Medicare Advantage may be right for some, but it is not always the easy route it appears to be. It requires careful analysis of:

• Plan limitations,

• Network restrictions,

• Cost-sharing structure,

• Loss of certain PSHB coordination benefits.

Take time to evaluate all your options carefully, especially in the months before you turn 65 or during Medicare Open Enrollment (October 15 to December 7). A misstep here could impact your care access and finances for years.

If you need help comparing your PSHB and Medicare coverage options, speak with a licensed agent listed on this website to get clear, personalized guidance tailored to your situation.