Key Takeaways

  • Enrolling in a Medicare Part C plan without understanding PSHB coordination rules can jeopardize your federal health coverage.

  • To retain PSHB benefits in retirement, you must understand how Medicare Advantage affects coordination of benefits, enrollment status, and prescription coverage.

Why Your Medicare Choices Matter More with PSHB

The Postal Service Health Benefits (PSHB) Program is in full effect in 2025, replacing FEHB coverage for Postal retirees and employees. With this transition, one of the most critical changes involves how your PSHB plan interacts with Medicare, particularly Medicare Advantage (Part C). While Medicare Part C plans might seem appealing due to extra benefits, they can significantly impact your PSHB coverage if you’re not careful.

The decision to enroll in a Medicare Advantage plan isn’t just about adding coverage. It changes how your health care is delivered and how your PSHB plan functions alongside it. If you make this decision without checking PSHB coordination rules, you risk duplicate coverage, loss of certain benefits, or even losing your PSHB enrollment entirely.

How PSHB Coordinates with Medicare in 2025

Since January 1, 2025, the PSHB Program operates under new rules that affect all Postal Service retirees and eligible family members. One of the major shifts is mandatory Medicare Part B enrollment for certain retirees and their dependents. But even more nuanced is the relationship between PSHB and Medicare Part C.

Here’s what you need to understand:

  • PSHB is designed to work primarily with Original Medicare (Part A and Part B).

  • If you enroll in a Medicare Advantage plan, it generally replaces your Original Medicare coverage.

  • This can limit how your PSHB plan works because PSHB expects Medicare to be your primary payer.

What Changes When You Enroll in Medicare Part C

When you enroll in Medicare Advantage, the following happen:

  • Medicare Advantage becomes your primary coverage instead of Original Medicare.

  • The PSHB plan may shift to a secondary payer, depending on how the coordination is structured.

  • Some PSHB plans may not coordinate benefits at all with Medicare Advantage.

This switch can cause confusion and misaligned coverage. If you’re expecting your PSHB plan to provide the same level of support while using Medicare Advantage as you had with Original Medicare, you may be in for a surprise.

What Happens to Your PSHB Coverage

If you don’t review how your PSHB plan handles coordination with Medicare Advantage before enrolling, several problems can occur:

  • Denied Claims: Some PSHB plans will not pay for services already covered under your Medicare Advantage plan.

  • Loss of Prescription Coverage: PSHB includes prescription benefits through an Employer Group Waiver Plan (EGWP) aligned with Medicare Part D. Enrolling in Medicare Advantage with drug coverage (MAPD) could cause automatic disenrollment from your PSHB drug benefits.

  • Suspension Risk: Although not immediate, prolonged enrollment in conflicting Medicare Advantage plans without informing PSHB can result in plan conflicts or suspension.

Mandatory Part B Doesn’t Equal Part C

One common misconception is assuming that because Medicare Part B is mandatory for most PSHB retirees, Medicare Part C is automatically integrated too. That is not true.

  • PSHB only requires Part B (and Part A if eligible). Medicare Advantage is optional.

  • Choosing Medicare Advantage can disrupt the coordination model PSHB plans are designed to follow.

Unless you have reviewed your specific PSHB plan’s documentation and confirmed its ability to work with a Medicare Advantage plan, you should not assume full compatibility.

Timeline of Consequences After Enrolling in Medicare Advantage

Here is how issues may unfold once you enroll in a Medicare Advantage plan without checking your PSHB plan:

  • Immediately: Your Medicare Advantage plan takes over as your primary insurer. You may begin using its network for doctors, hospitals, and prescriptions.

  • 30 to 60 Days Later: You may start seeing issues with your PSHB billing or find that certain claims are unpaid or processed incorrectly.

  • 90 Days and Beyond: If your Medicare Advantage plan included drug coverage, your PSHB prescription drug plan may be terminated, as Medicare does not allow dual enrollment in Part D and MAPD plans. This could leave you with different copays, formularies, or pharmacy access than expected.

  • Annual Enrollment Period: You’ll have to wait until the next Medicare Open Enrollment (October 15 to December 7) to switch back to Original Medicare if needed, with changes effective January 1 of the following year.

Prescription Drug Conflicts Are a Major Issue

Prescription drug coverage is one of the most complex areas when it comes to PSHB and Medicare Advantage. Under PSHB, retirees receive drug coverage through an integrated Medicare Part D EGWP. If you enroll in a Medicare Advantage plan that includes drug coverage:

  • You are automatically disenrolled from your PSHB Part D plan.

  • You may lose access to features like a $2,000 annual out-of-pocket cap or $35 insulin copays under PSHB’s drug benefits.

  • You cannot be enrolled in two Medicare drug plans at the same time—Medicare enforces this rule strictly.

This often comes as a surprise to retirees who expected to retain both coverages.

What You Should Do Before Considering a Medicare Advantage Plan

If you’re exploring Medicare Advantage options, follow these steps before enrolling:

  • Read your PSHB plan brochure carefully: Look for sections on Medicare coordination and drug coverage.

  • Contact your PSHB plan: Ask how they work with Medicare Advantage and whether they allow benefit coordination.

  • Compare drug benefits: PSHB plans may offer better protection on medication costs when paired with Medicare Part B rather than Medicare Advantage.

  • Consult a licensed agent listed on this website: A licensed agent can walk you through plan compatibility and help you avoid accidental disenrollment or reduced benefits.

What If You Already Made the Switch?

If you already enrolled in a Medicare Advantage plan without checking PSHB rules, all is not lost. But you need to act:

  • Contact your PSHB plan immediately: Notify them and clarify how your coverage is affected.

  • Review your current drug coverage: If you lost your PSHB prescription benefits, confirm whether your current MAPD plan offers comparable coverage.

  • Make changes during Medicare Open Enrollment: From October 15 to December 7, you can switch back to Original Medicare and reestablish PSHB coordination.

  • Consider a Special Enrollment Period (SEP): In some cases, you may qualify for an SEP to make changes sooner, especially if your Medicare Advantage plan misled you or changed significantly.

How to Maintain Full PSHB and Medicare Coverage

To avoid any future conflicts or disruptions, here’s what you should keep in mind:

  • Stay enrolled in Original Medicare (Parts A and B) if you want smooth PSHB integration.

  • Do not enroll in a Medicare Advantage plan unless your PSHB plan explicitly states that it can coordinate with it.

  • Keep records of all your communications with your PSHB plan and Medicare.

  • Review your Annual Notice of Change (ANOC) each fall to understand what’s changing in your coverage.

Reviewing PSHB and Medicare Compatibility Is Now Essential

As the PSHB system continues in 2025, coordinating with Medicare is more than just a paperwork requirement. Your retirement healthcare, costs, and access depend on making informed decisions. Medicare Advantage plans operate independently from PSHB, and you must ensure they are compatible before making the switch.

If you’re not absolutely sure your PSHB plan allows coordination with a Medicare Advantage plan, it’s best to stay with Original Medicare and Part B. This preserves your prescription benefits, reduces your chances of denied claims, and avoids future administrative hurdles.

For personalized help, get in touch with a licensed agent listed on this website. They can explain your PSHB options, help you compare coverage, and ensure you retain the benefits you’ve earned.