Key Takeaways

  • Medicare Advantage (Part C) plans may seem comprehensive at first, but they often come with unexpected out-of-pocket costs and network restrictions that can reduce your benefits when used alongside Postal Service Health Benefits (PSHB).

  • Enrolling in a Part C plan without understanding how it interacts with PSHB and Medicare Parts A and B can lead to denied services, limited provider access, and higher expenses than anticipated.

Medicare Advantage and PSHB: A Complicated Match

As a Postal Service retiree or employee nearing retirement, you’re already familiar with the benefits of the Federal Employees Health Benefits (fehb) system. In 2025, PSHB has replaced FEHB for USPS workers and annuitants, and that means you now have a new health insurance framework built specifically for postal employees.

At the same time, you may be hearing more about Medicare Advantage—also called Medicare Part C. These plans are advertised as all-in-one alternatives to Original Medicare. But here’s the catch: when you’re already eligible for PSHB, especially if you’re enrolled in Medicare Parts A and B, choosing Part C could compromise your access, increase your costs, and give you less control than you think.

What Medicare Advantage Covers—and What It Doesn’t

Part C bundles Medicare Parts A and B, and often includes prescription drug coverage and extras like dental or vision. However, the structure of these plans is entirely different from Original Medicare:

  • You must stay within the plan’s network of providers.

  • Referrals may be required for specialists.

  • There are limits on out-of-network coverage.

  • Prior authorizations are often necessary.

While that might not sound alarming at first, it becomes problematic when your PSHB plan expects coordination with Original Medicare—not Medicare Advantage.

PSHB Is Designed to Coordinate with Original Medicare

In 2025, PSHB plans are structured to work seamlessly with Original Medicare (Parts A and B). When you’re enrolled in both, your PSHB plan typically becomes secondary payer. This dual coverage setup gives you advantages like:

  • Lower copayments and coinsurance

  • Waived or reduced deductibles

  • Expanded provider access with fewer restrictions

However, if you switch to Medicare Advantage (Part C), this coordination breaks down. Since Part C replaces your Original Medicare benefits, the PSHB plan may not offer the same cost-sharing reductions or coverage perks.

Out-of-Pocket Maximums: Not What You Expect

Many Medicare Advantage plans promote an annual out-of-pocket maximum, which sounds reassuring. But here’s where it gets tricky:

  • The cap only applies to in-network services.

  • Out-of-network costs may be unlimited or much higher.

  • Certain high-cost services, like skilled nursing or infusions, might carry large coinsurance or preauthorization hurdles.

In contrast, the PSHB structure combined with Original Medicare typically gives you predictable and often lower cost-sharing. For example, in-network out-of-pocket maximums in PSHB for 2025 are capped at $7,500 for Self Only and $15,000 for family plans—and Medicare helps absorb much of those expenses if you have Parts A and B.

You Lose the Medicare Part D Advantage

If you join a Medicare Advantage plan with drug coverage, you forfeit access to the integrated Medicare Part D Employer Group Waiver Plan (EGWP) that comes automatically with PSHB for Medicare-eligible members.

That EGWP coverage includes:

  • A $2,000 annual cap on prescription out-of-pocket costs in 2025

  • The $35 insulin cap

  • An expanded pharmacy network

By switching to a Part C plan, you remove yourself from this highly structured and generous drug benefit under PSHB.

Network Restrictions Can Be a Dealbreaker

PSHB plans combined with Original Medicare give you freedom to see nearly any doctor who accepts Medicare. Part C, however, limits you to specific networks that may not include your preferred specialists or hospitals.

Also, if you travel frequently or live in different locations throughout the year, a Part C plan’s regional coverage could significantly reduce your access to care.

Under PSHB and Original Medicare, you can often receive nationwide coverage, which is critical for Postal retirees who relocate or split time between states.

Prior Authorizations and Delays in Care

Most Medicare Advantage plans require prior authorization for services like imaging, rehab, surgery, or even prescription medications. This can delay treatment and sometimes lead to denials.

Original Medicare rarely requires prior authorization. When used with PSHB, this streamlined access ensures faster and more flexible care.

You Still Pay Part B Premiums

One major misconception is that switching to Medicare Advantage means you avoid Part B premiums. That’s not true. You must still pay the $185 monthly premium for Part B in 2025 to be eligible for any Part C plan.

And if you don’t already have Part B when enrolling in PSHB, you risk losing out on benefits. Some PSHB plans now require Medicare Part B enrollment to access certain features or savings. This means you could end up paying for Part C and missing out on PSHB coordination benefits.

What Happens If You Want to Switch Back?

Let’s say you enroll in a Medicare Advantage plan and later decide to return to Original Medicare with PSHB. That can be more difficult than you expect:

  • You may need to wait until the next Medicare Open Enrollment period (October 15 to December 7).

  • You may lose your previous PSHB drug benefits.

  • You might not be able to buy a Medigap plan without medical underwriting, which isn’t needed with PSHB.

In contrast, staying enrolled in Original Medicare and PSHB from the start gives you steady, flexible access to care without annual changes or disruptions.

Marketing Messages vs. Long-Term Value

Medicare Advantage plans often advertise perks that sound appealing—gym memberships, hearing aids, transportation. But these extras don’t necessarily compensate for the tighter networks, prior authorization rules, or risk of denied claims.

The long-term value of staying within the PSHB + Original Medicare framework lies in reliable, nationwide access to care and lower risk of surprise costs. These benefits grow even more important as your health needs increase with age.

Timeline Considerations

Here’s how timelines matter for your decisions in 2025:

  • If you’re newly eligible for Medicare at age 65, your Initial Enrollment Period lasts 7 months (3 months before, the month of, and 3 months after your birthday month).

  • If you declined Part B earlier, you can enroll during the General Enrollment Period from January 1 to March 31. Coverage begins July 1.

  • Medicare Open Enrollment runs October 15 to December 7. This is when you can switch between Original Medicare and Medicare Advantage plans.

  • PSHB Open Season is typically from November to December. This is when you can change your PSHB plan.

If you’re already retired and Medicare-eligible, not enrolling in Part B could restrict your PSHB benefits—even if you remain in PSHB. And enrolling in a Part C plan limits your ability to coordinate coverage effectively.

Keep the Bigger Picture in Focus

With PSHB now fully in place for 2025, you need to assess how any external plan interacts with your benefits. Medicare Advantage plans are not inherently bad—but they are not built with PSHB in mind. Coordination breaks down, restrictions increase, and you may find yourself boxed in with fewer options and more red tape.

The smarter approach for most Postal retirees is to:

  • Stay with Original Medicare (Parts A and B)

  • Maintain PSHB coverage for secondary benefits

  • Take advantage of the integrated EGWP prescription plan

This ensures your healthcare remains flexible, comprehensive, and portable.

Aligning Your PSHB and Medicare Strategy

Choosing how to pair your PSHB plan with Medicare is one of the most important decisions you’ll make as a USPS retiree or employee nearing retirement.

If you’re considering switching to Medicare Advantage, it’s critical to understand the implications—not just the marketing. You may be giving up coordination, access, and financial protections that PSHB was designed to support.

To make sure you’re choosing the right path, reach out to a licensed agent listed on this website who understands both Medicare and PSHB. They can walk you through the fine print and help you align your coverage with your long-term health goals.