Key Takeaways

  • Enrolling in a Medicare Part C (Medicare Advantage) plan while you’re already covered under PSHB in 2025 may lead to redundant premiums and fragmented coverage.

  • Understanding how PSHB integrates with Medicare Parts A and B is essential before adding Part C—because Part C usually replaces A and B, and not all benefits will align smoothly.

What You Need to Know About PSHB and Medicare Part C in 2025

If you’re a Postal Service retiree or annuitant in 2025, you may already be enrolled in the new Postal Service Health Benefits (PSHB) Program. And if you’re eligible for Medicare, you’ve probably also encountered a dizzying array of Part C plans promising extensive benefits. But layering Medicare Advantage on top of your PSHB plan isn’t always the best move.

In fact, many retirees accidentally end up paying more and getting less when these two types of coverage overlap inefficiently. Here’s what’s happening—and what you should do instead.

How PSHB Coordinates With Medicare

The PSHB program was introduced in 2025 as a replacement for FEHB for postal retirees and eligible employees. It’s structured to work seamlessly with Original Medicare (Parts A and B), offering enhanced benefits if you’re enrolled in both.

Here’s how they coordinate:

  • Medicare is Primary: When you have both Medicare and PSHB, Medicare pays first for eligible services.

  • PSHB is Secondary: Your PSHB plan pays remaining costs like copayments, coinsurance, or uncovered items, depending on the plan.

  • Extra Perks for Having Medicare Part B: Many PSHB plans reduce cost-sharing or even reimburse some of your Part B premium if you’re enrolled.

But these benefits depend heavily on you being enrolled in Original Medicare—not necessarily a Medicare Advantage plan.

What Medicare Part C Does Differently

Medicare Part C (Medicare Advantage) is a private alternative to Original Medicare. By enrolling in Part C, you’re choosing to receive your Medicare Part A and B services from a private plan instead of the federal government.

This means:

  • Your coverage switches from Original Medicare to a private company.

  • You may need to use a provider network.

  • You may have a separate set of rules, copays, and coverage tiers.

  • Your PSHB plan may no longer coordinate benefits the way it does with Original Medicare.

While these plans may offer attractive extras, they can throw off the built-in PSHB-Medicare coordination.

Why You Might End Up Paying Twice

This is where the real issue lies. If you’re enrolled in a PSHB plan and Medicare Advantage at the same time, here’s what typically happens:

  • You’re still paying your PSHB premium.

  • You’re also paying your Part C plan’s premium.

  • But your PSHB plan may not coordinate with or supplement your Medicare Advantage plan.

The result? You’re paying two premiums for coverage that doesn’t work together as intended. Worse, in some cases, services might not be covered unless you strictly follow your Medicare Advantage plan’s rules, such as using in-network providers.

How This Impacts Your Care in 2025

PSHB plans are designed to enhance Original Medicare. So when you swap that out for Medicare Advantage, you may:

  • Lose access to waived deductibles or reduced copayments that are tied to having Part B.

  • Face billing confusion when providers submit claims, especially if your PSHB plan doesn’t clearly supplement Part C.

  • Be denied some coordination benefits that only apply when Medicare is primary.

  • Experience narrower provider networks under Part C, limiting your choice.

And remember, in 2025, many PSHB plans automatically include a Medicare Part D EGWP for prescription drugs when you’re enrolled in Medicare. If you join a standalone Medicare Advantage plan with its own drug coverage, you could face plan conflicts or even automatic disenrollment.

What About Drug Coverage?

Under PSHB in 2025, retirees and annuitants who have Medicare automatically receive their prescription benefits through an EGWP—a Medicare Part D Employer Group Waiver Plan. This is tightly integrated with the PSHB plan.

If you enroll in a Medicare Advantage plan that includes its own drug benefit (MAPD), it can trigger a conflict:

  • You can’t be enrolled in two Part D plans at the same time.

  • If your Medicare Advantage plan includes drug coverage, it might force you out of the PSHB-integrated EGWP.

  • If you opt out of the EGWP, you lose PSHB prescription drug coverage—and may not be allowed back in.

This is one of the most overlooked but serious consequences of mixing PSHB with Part C.

Financial Considerations in 2025

Beyond paying two premiums, you’re also likely to miss out on specific financial incentives built into the PSHB system:

  • Some PSHB plans reimburse a portion of your Medicare Part B premium—but only if you’re in Original Medicare, not Medicare Advantage.

  • Lower out-of-pocket maximums may apply only when Medicare is primary.

  • Cost-sharing reductions and waived deductibles often hinge on coordination with Part B—not with Medicare Advantage.

So even if your Part C plan seems to offer good coverage on paper, you might lose significant financial protections that come from the PSHB + Original Medicare pairing.

The Administrative Headache

When your coverage isn’t aligned, claim processing becomes more complicated:

  • Providers may not know who to bill first.

  • Your Medicare Advantage plan may require prior authorization, but your PSHB plan won’t recognize it.

  • Your pharmacy might be in the EGWP network but not in your Medicare Advantage plan’s network.

  • If you leave your PSHB plan thinking your Part C plan will replace it, you may not be allowed to reenroll until the next Open Season.

In 2025, these inconsistencies often lead to denials, delays, or double billing.

Should You Ever Combine Part C With PSHB?

There are very few scenarios in which enrolling in both makes sense:

  • If your PSHB plan provides very minimal retiree coverage, and you want to replace it entirely.

  • If you’re not eligible for Medicare Part B and want broader coverage than PSHB + Part A can offer.

  • If your PSHB plan doesn’t offer meaningful cost coordination with Medicare.

However, these are rare situations. Most PSHB retirees benefit more by pairing Original Medicare with their PSHB plan, preserving both value and simplicity.

How to Know If You’re at Risk in 2025

Ask yourself these questions:

  • Am I paying a separate premium for a Medicare Advantage plan while also keeping my PSHB?

  • Is my PSHB plan offering reduced cost-sharing for Part B but not for Part C?

  • Have I reviewed whether my PSHB plan coordinates with Medicare Advantage?

  • Have I been told I’m losing access to the EGWP drug plan?

If you’re unsure, it’s time to pause and reassess before Open Season.

Making a Smarter Coverage Choice

Here’s what you can do to avoid costly overlaps:

  • Stick with Original Medicare (Parts A and B) if you’re keeping PSHB coverage.

  • Verify that your PSHB plan offers enhanced benefits when paired with Part B.

  • Be cautious about joining any Medicare Advantage plan unless you intend to drop PSHB altogether.

  • Review your EGWP eligibility and how it integrates with your drug coverage.

  • Contact a licensed agent listed on this website for help reviewing your specific situation.

A Better Way to Coordinate in 2025

The PSHB program was designed with Medicare in mind, but not necessarily with Medicare Advantage. By understanding the differences in coordination, claims handling, and cost structures, you can avoid one of the most common mistakes postal retirees make in 2025.

Don’t fall for the myth that more coverage always equals better protection. Sometimes, too much of a good thing only creates confusion—and a higher bill.

If you’re unsure how your Medicare and PSHB plans work together, get in touch with a licensed agent listed on this website for guidance. An expert can help you weigh the trade-offs and make an informed choice that protects your health and your wallet.