Medicare Advantage Might Sound Like a Deal, Until You Need the Out-of-Network Option

Key Takeaways

• While Medicare Advantage plans often advertise lower upfront costs, you could face significant challenges and expenses if you need care outside of their network.

• Postal retirees and workers under PSHB must carefully consider whether network limitations in Medicare Advantage plans align with their current and future healthcare needs.

Understanding How Medicare Advantage Plans Work

When you first hear about Medicare Advantage plans, they often sound like a simple replacement for Original Medicare. They combine hospital (Part A) and medical (Part B) coverage and usually include prescription drug coverage. Many also advertise extra benefits like dental, vision, or hearing.

However, unlike Original Medicare, Medicare Advantage plans operate within strict networks. This means that, except for emergencies, you are generally required to use doctors, specialists, and hospitals that are part of the plan’s approved list. If you seek care outside of this network, you could face much higher costs — or find that your care is not covered at all.

For Postal Service retirees and workers navigating the transition to Postal Service Health Benefits (PSHB) in 2025, understanding this difference is crucial.

What Out-of-Network Really Means in 2025

In 2025, “out-of-network” still works much the same way it has in the past, but the stakes feel higher as healthcare costs continue to rise.

• Out-of-network care generally means services from providers not contracted with your plan.

• Emergency care is usually covered even if it’s out-of-network, but you may still face higher cost-sharing.

• Non-emergency care out-of-network may not be covered at all, or it might be covered at a drastically reduced rate, leaving you to pay the balance.

Some Medicare Advantage plans offer limited out-of-network coverage, but it is often restricted, requires referrals, and involves higher copayments, coinsurance, and deductibles.

Why Postal Retirees and Workers Must Pay Close Attention

The move to PSHB means that you now have a choice of new plans, and many options coordinate with Medicare. However, if you are thinking about enrolling in a Medicare Advantage plan alongside your PSHB coverage, you must weigh the network rules carefully.

You might be healthy now, but healthcare needs can change dramatically after retirement. Limiting yourself to a narrow network could:

• Restrict access to specialists you need later.

• Make it harder to seek care when traveling.

• Create large unexpected medical bills if you accidentally use an out-of-network provider.

What Happens When You Travel or Move

Postal retirees and employees often have reasons to travel or relocate after their careers end. Whether you are visiting family in another state or moving to a different part of the country, your access to care matters.

In 2025, many Medicare Advantage plans still offer limited travel benefits. Generally:

• Within your plan’s service area: You have full access to network providers.

• Outside your plan’s service area: You may only be covered for emergencies.

• Extended stays elsewhere: You might need to switch to a new plan in your new location during the next enrollment period.

This makes nationwide flexibility an important factor to consider if you anticipate traveling often.

How Emergencies Are Handled

Emergency situations are one of the few exceptions where Medicare Advantage plans must cover your care even if it’s out-of-network. However, “emergency” has a specific definition.

In general, an emergency is any situation where not seeking immediate medical attention could put your health at serious risk. Examples include:

• Heart attacks

• Strokes

• Serious injuries

• Severe bleeding

Once your condition is stable, your plan may require you to transfer to an in-network facility to continue your care. Refusing to do so can increase your costs.

Costs You Might Not Expect

Even if a Medicare Advantage plan has some out-of-network benefits, 2025 rules still allow plans to set significantly higher out-of-network cost-sharing.

Some of the costs you could face include:

• Higher deductibles: Separate from your in-network deductible.

• Higher coinsurance rates: You might pay 40%-50% of service costs instead of the lower in-network rates.

• Balance billing: Out-of-network providers can bill you for the difference between what they charge and what your plan pays.

These extra costs can add up quickly, especially for complex or ongoing treatments.

The Annual Out-of-Pocket Maximum Difference

Medicare Advantage plans are required to cap your annual out-of-pocket spending for in-network services. In 2025, the maximum in-network out-of-pocket limit is $9,350.

However, for combined in-network and out-of-network services, the limit can be as high as $14,000.

This means:

• If you stick entirely to in-network providers, your costs are more predictable.

• If you use out-of-network care, you could be on the hook for much higher amounts before reaching your maximum protection.

Understanding this difference is essential when budgeting for healthcare in retirement.

PSHB Plans and Medicare Coordination in 2025

As a Postal retiree, your PSHB plan likely coordinates with Medicare if you are enrolled. Coordination usually means that Medicare pays first, and your PSHB plan picks up most of the remaining costs.

However, if you are enrolled in a Medicare Advantage plan, things are different:

• You are subject to the plan’s rules: including network restrictions.

• Medicare is not paying first: The Medicare Advantage plan manages your benefits entirely.

• You may lose PSHB coordination: Some PSHB plans expect you to stay with Original Medicare for optimal coordination.

Before enrolling in a Medicare Advantage plan, it is critical to confirm how it integrates with your PSHB benefits.

Important Questions to Ask Yourself Before Choosing

When evaluating your options in 2025, ask these questions:

• Will my preferred doctors, hospitals, and specialists be in-network?

• What happens if I need specialty care not available in the network?

• How are emergencies and urgent care handled when I travel?

• What are the out-of-network rules, and how much could I have to pay?

• Will my PSHB plan work well with this Medicare Advantage plan?

Taking the time to answer these questions can help you avoid costly surprises.

Enrollment Timelines to Remember

Several important dates impact your Medicare and PSHB choices:

• Medicare Open Enrollment: October 15 to December 7 each year. You can switch between Original Medicare and Medicare Advantage during this window.

• PSHB Open Season: Runs from November to December. You can choose your Postal Service Health Benefits plan during this period.

• Medicare Advantage Open Enrollment Period: January 1 to March 31 each year. If you are already in a Medicare Advantage plan, you can switch to another plan or return to Original Medicare during this time.

Missing these windows could lock you into a plan you cannot easily change until the next enrollment period.

Alternatives to Consider

If flexibility is important to you, staying with Original Medicare and using your PSHB plan to cover secondary costs could offer:

• Wider choice of doctors and hospitals.

• Easier access to specialists.

• Nationwide coverage without needing referrals.

• Fewer worries about being “out-of-network.”

Some retirees also find that pairing Original Medicare with a strong PSHB plan offers a better balance of cost and coverage.

Staying Ahead with the Right Plan for You

Ultimately, the decision between Original Medicare and Medicare Advantage is highly personal. However, as a postal retiree or worker under PSHB in 2025, it is more important than ever to understand the full picture — including how out-of-network care could affect your health and finances.

If you have questions or want personalized help choosing the right plan, get in touch with a licensed insurance agent listed on this website. They can guide you through your options so you can retire with confidence, knowing your healthcare needs are protected.