Key Takeaways

• While Medicare Advantage plans may appear attractive due to added perks, they often come with stricter provider networks, prior authorization hurdles, and cost trade-offs that can impact your long-term care.

• As a PSHB enrollee, understanding how Medicare integrates with your postal health benefits is essential before shifting to a Medicare Advantage plan, especially given 2025’s structural changes.

What Medicare Advantage Offers You Up Front

Medicare Advantage plans, also known as Medicare Part C, combine Medicare Part A and Part B and are administered by private insurance companies. These plans often include additional benefits not covered by Original Medicare, such as:

• Routine dental, vision, and hearing care

• Gym memberships and wellness incentives

• Transportation to medical appointments

• Allowances for over-the-counter medications

You might find these extras very appealing, especially if you’re a retiree managing a fixed income. But it’s crucial to understand what you’re giving up in return.

What You Trade Away When You Opt for Medicare Advantage

Although the extra benefits may catch your attention, choosing a Medicare Advantage plan often involves key sacrifices. Some of the biggest trade-offs include:

Limited Provider Networks

Most Medicare Advantage plans operate as HMOs or PPOs, which means you’re confined to a specific network of doctors and hospitals. If you go out of network, your care may not be covered, or you’ll pay substantially more out of pocket.

This is particularly limiting if:

• You live in a rural area with fewer in-network providers

• You travel frequently or live part of the year in a different state

• You want to continue seeing a trusted specialist not in the network

Original Medicare paired with your PSHB plan does not impose these limitations. You can typically see any provider who accepts Medicare.

Prior Authorization Delays

In 2025, prior authorization continues to be one of the most controversial features of Medicare Advantage. Many services, especially high-cost diagnostics or procedures, require pre-approval.

These delays can be frustrating and, in some cases, may lead to worsened health outcomes. As a PSHB enrollee, your federal coverage historically avoids many of these barriers when combined with Original Medicare.

Risk of Unexpected Out-of-Pocket Costs

Medicare Advantage plans have annual out-of-pocket maximums, which is a safety net Original Medicare lacks. However, this cap can still be quite high. According to current figures, the in-network maximum out-of-pocket limit is $9,350 in 2025, and it can be even higher if you receive out-of-network care under a PPO plan.

Even before you hit that ceiling, you could face copayments and coinsurance every time you:

• Visit a specialist

• Have an outpatient procedure

• Need emergency care

• Get a hospital stay

If you stay with Original Medicare and PSHB, your out-of-pocket costs may be lower, especially if your PSHB plan includes cost-sharing reductions for those enrolled in Medicare Part B.

How PSHB Coordinates with Medicare in 2025

The Postal Service Health Benefits (PSHB) Program replaces FEHB for postal employees and retirees starting January 1, 2025. This change introduces specific coordination rules between PSHB and Medicare, which you must understand before switching to any Medicare Advantage plan.

Medicare Part B Enrollment Requirement

If you are a Medicare-eligible annuitant or family member, you are generally required to enroll in Medicare Part B to maintain your PSHB coverage. There are some exceptions:

• You retired on or before January 1, 2025

• You were age 64 or older as of January 1, 2025

• You live overseas

• You have qualifying VA or Indian Health Service coverage

Integrated Prescription Drug Coverage

Your PSHB plan includes Medicare Part D through an Employer Group Waiver Plan (EGWP). This means:

• You receive a $2,000 annual cap on out-of-pocket drug expenses

• Your insulin costs are capped at $35 per month

• You have access to a large pharmacy network

Opting into a Medicare Advantage plan that includes its own Part D coverage may result in losing access to the EGWP drug benefit under PSHB.

Waived Cost Sharing and Reimbursement Perks

Many PSHB plans offer significant cost savings if you stay with Original Medicare:

• Deductibles are often waived

• Copayments are reduced

• Some plans even reimburse part or all of your Medicare Part B premium

Medicare Advantage plans may not offer these same financial perks, particularly since you’d be moving out of your PSHB plan structure.

What You Should Review Before Switching to Medicare Advantage

Before you make the switch, especially in 2025 when the new PSHB program is in full effect, make sure you:

• Review your current PSHB plan’s coordination with Medicare. Each plan has a brochure outlining how it handles costs, reimbursements, and benefits when you are enrolled in Medicare Part A and B.

• Check the provider network of any Medicare Advantage plan you’re considering. Make sure your preferred doctors, specialists, and hospitals are covered.

• Understand the plan’s prior authorization requirements. Ask how often services are denied or delayed due to pre-approvals.

• Compare your expected out-of-pocket expenses. Run scenarios based on your usual medical needs.

• Evaluate prescription coverage differences. If you rely on certain medications, confirm how they are covered under both PSHB and a Medicare Advantage plan.

Timing and Enrollment Considerations in 2025

You can enroll in a Medicare Advantage plan or return to Original Medicare during specific windows each year:

• Initial Enrollment Period (IEP): When you first become eligible for Medicare, around your 65th birthday

• Open Enrollment Period: October 15 to December 7 each year, for coverage beginning January 1

• Medicare Advantage Open Enrollment Period: January 1 to March 31 each year, to switch or return to Original Medicare

For PSHB enrollees, Open Season for changing or updating your PSHB plan runs from November to December each year. Any switch from your PSHB plan to a Medicare Advantage plan should be carefully coordinated so that you do not lose essential prescription drug or cost-sharing benefits.

What You Could Lose by Leaving PSHB for Medicare Advantage

Switching away from your PSHB plan to a standalone Medicare Advantage plan could mean:

• Losing premium reimbursement offers from PSHB plans

• Giving up waived deductibles and lower copayments

• Exiting the robust prescription drug coverage through the PSHB-integrated Part D EGWP

• Facing prior authorization delays

• Being limited to a narrower provider network

Although Medicare Advantage plans advertise extra perks, these often come at the cost of flexibility, ease of access, and potential savings built into your PSHB benefits.

Why Staying in PSHB Might Be the Safer Option

If you’re already enrolled in Medicare Parts A and B and have PSHB coverage, you may not gain much from a Medicare Advantage plan. In fact, you could lose the following:

• The ability to see any Medicare-accepting doctor nationwide

• Automatic coordination between Medicare and your PSHB plan

• Cost-saving features built into your PSHB coverage when paired with Medicare

PSHB plans were designed specifically for postal retirees and employees. They consider the realities of your service history, your Medicare eligibility, and your expected long-term health needs. In many cases, the benefits you get from simply coordinating PSHB with Original Medicare may outweigh the extras advertised by Medicare Advantage plans.

Think Long-Term, Not Just Immediate Perks

When evaluating Medicare Advantage in 2025, avoid making a decision based solely on the upfront bonuses. You need to think in terms of:

• Whether your preferred providers are covered

• How prior authorizations might delay your care

• What you could pay in an emergency or long-term hospitalization

• How well your medications are covered

• How the plan aligns with your PSHB benefits

Many retirees are drawn to immediate incentives, only to realize later that they have higher costs or fewer choices when care becomes more serious. This is where the long-term reliability of PSHB and Original Medicare often proves more valuable.

What It All Means for Your Postal Health Benefits in 2025

Your health coverage as a postal retiree or employee is more complex in 2025, but also more structured to support you. PSHB provides solid coordination with Medicare and generous benefits for those who enroll in Parts A and B. Before being swayed by the extras offered under Medicare Advantage plans, evaluate what you’re leaving behind.

Your PSHB plan was built for your unique needs as a postal worker. Switching to Medicare Advantage may not enhance your coverage; in fact, it may reduce it. Take your time, read your plan documents closely, and make sure you fully understand the trade-offs.

If you’re uncertain or have questions about how Medicare Advantage might impact your specific PSHB benefits, get in touch with a licensed agent listed on this website for personalized assistance.