Key Takeaways

  • Medicare Advantage plans may conflict with PSHB benefits in 2025, potentially leading to duplicate coverage, higher out-of-pocket costs, or coverage confusion if not properly coordinated.

  • You must understand how PSHB integrates with Medicare, especially if you are enrolled in or considering Medicare Advantage. Some PSHB plans work better with Original Medicare than with Medicare Advantage.

Understanding the Structure of PSHB in 2025

The Postal Service Health Benefits (PSHB) program, introduced in 2025, officially replaces FEHB coverage for postal employees, annuitants, and their eligible family members. While it retains a structure similar to the Federal Employees Health Benefits (FEHB) system, PSHB now includes specific Medicare coordination rules.

If you are a Medicare-eligible annuitant or family member, you are generally required to enroll in Medicare Part B unless you fall into an exempt category, such as being retired on or before January 1, 2025. This change is designed to encourage cost-sharing between Medicare and PSHB plans.

Medicare Advantage and How It Differs From Original Medicare

Medicare Advantage (Part C) plans are offered by private insurance companies and replace Original Medicare (Parts A and B). These plans typically include additional benefits like dental, vision, and hearing, and often bundle in Part D prescription drug coverage. However, they are not the same as having Original Medicare with a PSHB plan as secondary.

In contrast, Original Medicare allows PSHB plans to step in as secondary payers. This coordination often results in lower out-of-pocket costs and simpler coverage rules.

Where the Friction Begins

1. PSHB Plans Are Designed to Coordinate With Original Medicare

The PSHB program expects Medicare to be your primary payer once you reach age 65 (or earlier if you qualify by disability). Most PSHB plans assume you are enrolled in both Part A and Part B. If you choose Medicare Advantage instead, you may find:

  • PSHB does not act as a secondary payer.

  • Your Medicare Advantage plan takes full control of your benefits.

  • You may lose access to coordination features like waived deductibles or cost-sharing reductions.

This can lead to unexpected costs if your Medicare Advantage plan doesn’t fully cover certain services, or if your PSHB benefits become duplicative or inactive.

2. You Cannot Use PSHB and Medicare Advantage Simultaneously Like You Can With Original Medicare

Unlike with Original Medicare, where PSHB coverage can pay secondary claims, Medicare Advantage plans do not coordinate with PSHB in the same way. This creates a conflict:

  • PSHB plans cannot wrap around Medicare Advantage.

  • You may end up paying two premiums without meaningful benefit from one.

  • Prescription drug coverage through PSHB may be redundant with the Part D component of Medicare Advantage.

In effect, one plan becomes sidelined, and you could be paying for coverage you are not using.

3. Integrated Drug Coverage Can Lead to Conflicts

In 2025, PSHB enrollees who are Medicare-eligible automatically receive prescription coverage through an Employer Group Waiver Plan (EGWP) integrated with Medicare Part D. If you are enrolled in a Medicare Advantage plan that includes drug coverage (which most do), you may face these issues:

  • You can’t be enrolled in two Medicare Part D drug plans at once.

  • Your enrollment in a Medicare Advantage plan with drug coverage may lead to termination of your EGWP drug benefits through PSHB.

  • If you try to opt out of PSHB’s drug coverage, you lose that entire benefit—not just the drug component.

This creates a situation where you’re forced to choose between either your Medicare Advantage drug benefits or retaining your full PSHB plan.

Common Scenarios That Cause Overlap

Many retirees mistakenly assume they can combine both PSHB and Medicare Advantage to get better coverage. But in 2025, doing so could result in:

  • Paying dual premiums with no added value.

  • Confusion at the pharmacy if your prescriptions are billed through the wrong plan.

  • Inability to use the provider networks from both plans.

It’s important to remember that once you’re enrolled in a Medicare Advantage plan, it becomes the only payer for services covered under Parts A and B. Your PSHB plan doesn’t act as a backup.

When PSHB and Medicare Advantage Might Work Together

There are rare instances where a Medicare Advantage plan could be used effectively alongside PSHB:

  • If the PSHB plan doesn’t require Medicare Part B enrollment (rare in 2025).

  • If you decline the EGWP coverage from PSHB entirely (you must accept the consequences).

  • If your Medicare Advantage plan only covers specific areas or supplemental services not handled by PSHB.

These cases are not typical and usually require careful coordination. Most enrollees are better served using Original Medicare with PSHB.

What the PSHB Program Recommends in 2025

The PSHB program’s structure and documentation favor enrollment in Original Medicare (Parts A and B). In 2025:

  • Enrolling in Part B is mandatory for many annuitants to maintain PSHB coverage.

  • Most PSHB plans reduce cost-sharing for enrollees with Medicare Parts A and B.

  • You may receive additional perks like waived deductibles or lower copayments by staying with Original Medicare.

There is no such streamlined coordination with Medicare Advantage.

Medicare Advantage Enrollment Timing and Conflicts

Medicare Advantage has specific enrollment periods, which can further complicate your coordination with PSHB:

  • Annual Enrollment Period (Oct 15 – Dec 7): You can join or switch Medicare Advantage plans.

  • Medicare Advantage Open Enrollment (Jan 1 – Mar 31): Allows switching back to Original Medicare.

If you make a change during either window, it can trigger ripple effects in your PSHB coverage. If you switch to Medicare Advantage after being enrolled in a PSHB EGWP plan, you could lose prescription drug coverage under PSHB for the rest of the year.

How to Avoid Redundancy in 2025

If you’re concerned about overlapping or redundant coverage:

  • Review your PSHB plan’s Medicare coordination rules before enrolling in Medicare Advantage.

  • Confirm with PSHB whether the plan will continue to provide any benefits if you choose a Medicare Advantage plan.

  • Consider sticking with Original Medicare to preserve the secondary benefits PSHB offers.

The PSHB program is built with Original Medicare in mind. Coordination is clearer, benefits are more defined, and cost-sharing is often reduced for retirees who follow the preferred structure.

Advice for Annuitants Already in Medicare Advantage

If you’re already enrolled in a Medicare Advantage plan in 2025 and also have PSHB:

  • Evaluate whether you are truly benefiting from both plans.

  • Check if you are paying two premiums.

  • Contact your PSHB plan to determine what coordination—if any—still applies.

  • If it makes sense, consider disenrolling from Medicare Advantage during the Open Enrollment Period and returning to Original Medicare.

Be Mindful of Automatic Enrollment Rules

Some PSHB plans may auto-enroll Medicare-eligible enrollees into their corresponding EGWP drug plans. If you’re also in a Medicare Advantage plan with Part D, this could trigger disenrollment notices or denial of drug claims.

This is another reason why dual enrollment in PSHB and Medicare Advantage is not a simple matter.

Choosing the Right Path for Your Situation

Your decision between Medicare Advantage and Original Medicare isn’t just about coverage preferences—it’s about ensuring your PSHB benefits remain intact and functional. Consider the following before finalizing your enrollment:

  • Whether you qualify for any PSHB exemptions from Medicare Part B requirements.

  • How your plan coordinates with Medicare.

  • Whether the providers you want to see accept your preferred plan.

What to Do Next if You’re Unsure

You don’t have to guess your way through this decision. The 2025 changes to PSHB and Medicare rules are too important to ignore.

  • Compare PSHB plan brochures with Medicare options side-by-side.

  • Use Open Season (each November–December) to reevaluate your choices.

  • Talk to a licensed agent listed on this website for personalized help.

Why Coordination Matters More Than Ever in 2025

In 2025, the relationship between Medicare Advantage and PSHB is more complicated than it seems. You risk losing coverage, paying unnecessary premiums, or missing out on valuable secondary benefits by combining plans that were never meant to be used together.

Staying informed and making intentional choices is the best way to protect your health and your wallet. If you’re not sure where you stand, reach out to a licensed agent listed on this website to clarify your options and avoid unwanted surprises.