Key Takeaways

  • Medicare Advantage may appear attractive at first glance, but limitations on provider networks, cost-sharing surprises, and restrictions on coverage access can complicate your care, especially under PSHB.

  • As a Postal Service Health Benefits (PSHB) enrollee, you need to fully understand how Medicare Advantage interacts with your federal benefits before making a switch that might cost more than expected.

The Appeal of Medicare Advantage: Why It Catches Your Eye

At first glance, Medicare Advantage seems like a streamlined, affordable option. It combines Medicare Parts A and B into a single plan and often includes Part D for prescriptions. The pitch is simplicity, added perks, and, sometimes, lower upfront costs. But this surface-level appeal can be misleading, especially for PSHB enrollees who already have strong federal coverage.

What many enrollees don’t realize is that convenience comes with trade-offs:

  • Limited provider networks may restrict access to your preferred doctors or specialists.

  • Referrals may be required to see specialists.

  • Prior authorizations could delay care.

When weighed against the comprehensive structure of PSHB plans coordinated with Original Medicare, these features demand closer scrutiny.

The PSHB Framework in 2025: A Quick Refresher

In 2025, all Postal Service employees and retirees must be enrolled in a Postal Service Health Benefits (PSHB) plan. This new system replaces your previous FEHB coverage. The design aligns with Medicare in unique ways:

  • Medicare-eligible enrollees must enroll in Medicare Part B (with few exceptions).

  • Prescription coverage is integrated with Medicare Part D via an Employer Group Waiver Plan (EGWP).

  • PSHB plans coordinate benefits with Medicare to reduce deductibles, coinsurance, and other out-of-pocket expenses.

Unlike standalone Medicare Advantage, PSHB plans are built to work with Original Medicare—not to replace it. This distinction is crucial.

Why the Numbers Matter More Than the Ads

Medicare Advantage plans often advertise low premiums and extra benefits. But those numbers don’t tell the whole story.

Out-of-Pocket Maximums

In 2025, Medicare Advantage plans are federally limited to an in-network out-of-pocket maximum of $9,350, and $14,000 for combined in-network and out-of-network costs. However, many services may still come with:

  • Daily hospital copays

  • Coinsurance for outpatient surgery

  • Tiered prescription drug pricing

Compare that to PSHB plans that coordinate with Medicare:

  • Deductibles are often reduced or waived entirely.

  • Cost-sharing is minimized when Medicare is the primary payer.

  • PSHB plans include a $2,000 out-of-pocket maximum for prescription drugs.

These differences can amount to thousands of dollars annually.

Network Restrictions: A Hidden Maze

Most Medicare Advantage plans operate as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), and that affects your provider access.

You may need to:

  • Choose doctors from a specific network

  • Get referrals from a primary care physician

  • Face higher costs if you go out-of-network (or no coverage at all)

In contrast, PSHB plans coordinated with Original Medicare let you use any provider nationwide that accepts Medicare—no networks, no referrals. This flexibility is especially important if you travel, relocate seasonally, or seek specialists unavailable in-network.

Prior Authorization: The Red Tape That Delays Care

Prior authorization is a cost-management tool commonly used by Medicare Advantage plans. In fact, some services that are automatically covered by Original Medicare require prior approval under Advantage plans.

This includes:

  • Imaging (MRI, CT, PET scans)

  • Inpatient hospital stays

  • Skilled nursing facility care

Delays or denials can impact both timing and outcomes of care. PSHB plans, on the other hand, are less likely to require prior authorization for services already covered under Original Medicare, resulting in faster access.

The Complexity of Drug Coverage

Most Medicare Advantage plans include built-in prescription coverage, but the formularies and drug tiers may be more restrictive than you expect.

Meanwhile, PSHB plans in 2025 integrate prescription coverage through an enhanced Part D plan (EGWP), offering:

  • Lower cost-sharing

  • Broader formularies

  • $2,000 cap on annual out-of-pocket drug costs

In a Medicare Advantage plan, hitting that $2,000 cap isn’t guaranteed unless the plan has opted into this feature. With PSHB, it’s built in.

Coordination of Benefits: PSHB Is Designed for Dual Coverage

When you’re enrolled in both Medicare Parts A and B and a PSHB plan, your coverage works in tandem. Medicare pays first, and PSHB picks up the rest, often covering:

  • Deductibles

  • Coinsurance

  • Copayments

This layered structure can provide more comprehensive financial protection than a standalone Medicare Advantage plan. Medicare Advantage replaces Original Medicare entirely—meaning you lose that layered coordination.

Your Federal Benefits Don’t Supplement Medicare Advantage

A common misconception is that your PSHB plan will continue to act as secondary coverage if you switch to Medicare Advantage. It won’t.

Once you enroll in a Medicare Advantage plan, you are removed from your PSHB coverage. That means:

  • You cannot return to your PSHB plan until the next Open Season.

  • You lose access to any coordination benefits and prescription drug integration under PSHB.

This is why choosing Medicare Advantage requires careful planning, especially when the default structure of PSHB offers robust coverage without needing to switch.

Open Season Timing: The Clock Matters

The Open Season for PSHB occurs annually from November to December. During this time, you can:

  • Switch between PSHB plans

  • Return to a PSHB plan if you left for Medicare Advantage

  • Review plan changes for the upcoming year

Outside of Open Season, you may only switch plans during a qualifying life event (QLE). If you enroll in Medicare Advantage and change your mind, you’re likely locked in until the next Open Season. That makes every decision carry extra weight.

Medicare Part B Enrollment Still Required for PSHB

If you are Medicare-eligible and want to maintain your PSHB plan, you are required to enroll in Medicare Part B unless you qualify for an exemption. These exemptions include:

  • Retired on or before January 1, 2025

  • Age 64 or older as of January 1, 2025

  • Living abroad or receiving care through VA or IHS

Failure to enroll in Part B may result in loss of PSHB coverage. Medicare Advantage plans do not require Part B in the same coordinated way, but skipping Part B could lead to penalties and reduced coverage flexibility long term.

What You Risk by Overlooking the Details

It can be tempting to choose Medicare Advantage based on short-term gains or attractive marketing. But for PSHB participants, the long-term risks are significant:

  • Loss of federal coordination: Your PSHB plan doesn’t work as a backup.

  • Higher long-term costs: You may end up with more copays and uncovered services.

  • Disrupted continuity of care: If your provider is out-of-network or requires referrals, your access may change.

  • Limited switching flexibility: Outside of Open Season or special enrollment periods, you’re locked in.

Make Informed Decisions, Not Just Fast Ones

Choosing a Medicare Advantage plan isn’t just about monthly premiums or added perks. For PSHB enrollees, it requires a deep look at what you’d be giving up—including the coordination, flexibility, and lower cost-sharing that PSHB with Original Medicare offers.

Before making a change, speak to a licensed agent listed on this website who understands both Medicare and PSHB. They can help you compare options and avoid surprises that could affect your care or budget.