Key Takeaways

• Medicare Advantage plans may seem attractive for their added benefits, but for Postal Service Health Benefits (PSHB) enrollees, they come with trade-offs in flexibility, access, and cost-sharing.

• Relying on Medicare Advantage instead of Original Medicare with PSHB coordination could lead to narrower networks, stricter rules, and potential gaps in comprehensive coverage.

Understanding the Basics: What Is Medicare Advantage?

Medicare Advantage (Part C) is an alternative to Original Medicare, offered by private insurance companies approved by Medicare. These plans bundle Part A (hospital insurance) and Part B (medical insurance), often with additional benefits such as dental, vision, hearing, or wellness programs. Some plans also include Part D prescription drug coverage.

In 2025, these plans continue to attract attention for their extras. But if you’re a Postal Service annuitant or employee considering Medicare Advantage alongside—or instead of—your PSHB plan, it’s important to weigh the entire picture.

What Makes Medicare Advantage Appealing

Many enrollees are drawn to Medicare Advantage for a few core reasons:

• Extra benefits not covered by Original Medicare (e.g., fitness programs, vision exams, and transportation assistance)

• All-in-one coverage (often includes prescription drugs)

• Predictable costs through annual out-of-pocket maximums, which Original Medicare does not provide

On the surface, these features can seem ideal. But for PSHB participants, these “gains” may be accompanied by real limitations that don’t show up until later.

What You Lose in Flexibility

Medicare Advantage plans often come with network restrictions:

• Limited provider networks: Unlike Original Medicare, which allows you to see any provider who accepts Medicare, Medicare Advantage plans usually operate within a regional network.

• Referral requirements: Many plans require a primary care provider to coordinate referrals to specialists.

• Prior authorization rules: Certain services need insurer approval before they’re covered, delaying care or even resulting in denials.

As a PSHB enrollee used to a wide network and fewer restrictions, this shift in control may feel abrupt. If you travel often, relocate seasonally, or need specialized care from providers outside your plan’s network, you could be forced to pay more—or be denied coverage entirely.

Integration with PSHB Doesn’t Work the Same Way

PSHB and Medicare coordinate well when you stay with Original Medicare. If you enroll in Part A and Part B, most PSHB plans treat Medicare as your primary payer, then cover costs Medicare doesn’t fully pay for.

But once you switch to Medicare Advantage:

• Your PSHB plan may no longer act as secondary coverage.

• You may have to suspend your PSHB enrollment entirely if you want to avoid paying premiums for both plans.

• Some Medicare Advantage plans don’t coordinate with PSHB at all.

This creates an either/or situation. While you can switch back during Open Season (from November to December), the experience in between may not match the seamless coordination you expected.

Cost Sharing Isn’t Always Lower

Medicare Advantage plans market themselves as offering cost protections, but cost-sharing requirements vary significantly:

• Copayments and coinsurance can apply to each service.

• Annual out-of-pocket limits for in-network services are federally capped, but still high—in 2025, the maximum is $9,350 in-network and $14,000 for combined in- and out-of-network care.

• Out-of-network care may not be covered at all unless it’s an emergency.

By contrast, a PSHB plan coordinated with Original Medicare often offers lower deductibles, copays, and more generous coinsurance terms.

Part D Coverage Can Be Confusing

Most Medicare Advantage plans include drug coverage (MAPD). But for PSHB annuitants who enroll in Medicare Part B and remain in a PSHB plan, prescription drug coverage is already included through an Employer Group Waiver Plan (EGWP) that is integrated.

Switching to a Medicare Advantage plan with Part D may seem redundant—and may mean forfeiting the EGWP drug coverage. Worse, if you drop Part B or the EGWP plan, you could lose valuable drug cost protections, such as:

• The $2,000 annual cap on out-of-pocket prescription costs in 2025

• The $35 insulin copay cap under PSHB-integrated EGWP

• Broad pharmacy access and formulary protections

Timing and Reenrollment Challenges

You can’t easily jump between PSHB and Medicare Advantage throughout the year. If you suspend your PSHB coverage to try Medicare Advantage:

• You must wait until the next Open Season to re-enroll in PSHB unless you qualify for a Special Enrollment Period due to life events.

• Medicare Advantage plans change each year—benefits, networks, and drug formularies can shift, leaving you with fewer options than expected.

Since the PSHB transition became effective in 2025, it’s essential to understand your reenrollment rights and how suspending PSHB can impact future benefits.

Postal Annuitants: Know When PSHB Requires Medicare Part B

Starting in 2025, certain annuitants and family members must be enrolled in Medicare Part B to remain eligible for PSHB. If you:

• Retired after January 1, 2025 and

• Are eligible for Medicare Part A and Part B and

• Are not exempt (e.g., living abroad or enrolled in VA or Indian Health Services)

…then skipping Part B means losing PSHB eligibility.

Medicare Advantage plans don’t replace this requirement. Enrolling in a Medicare Advantage plan without maintaining Part B will disqualify you from PSHB coverage if you fall into the mandated category.

Comparing PSHB + Original Medicare vs. Medicare Advantage Alone

Knowing the Risk of Mid-Year Plan Changes

Each fall, Medicare Advantage plans announce their changes for the coming year. If your plan drops providers, raises copays, or alters drug coverage, you’ll receive a notice—but switching may not be simple:

• If you’ve suspended PSHB, you can’t reactivate it mid-year without a Qualifying Life Event.

• If the new Advantage plan doesn’t meet your needs, you may be stuck until the next enrollment window.

Planning carefully around these seasonal shifts is critical. The PSHB Open Season occurs from November to December, just like the Medicare Open Enrollment period. Missing these deadlines can mean an entire year of regret.

How Postal Annuitants Can Evaluate Their Options

As a PSHB enrollee considering Medicare Advantage, ask yourself:

• Do I want to keep nationwide provider access?

• Do I need flexibility for travel or living in multiple states?

• Will I be subject to prior authorization rules?

• Can I afford the possible out-of-pocket maximums under Advantage?

• Am I eligible to suspend PSHB and later re-enroll if I change my mind?

These aren’t minor questions—they shape how and where you get care, and how much you pay for it.

Why Coordination Still Matters More Than Add-Ons

It’s easy to be swayed by extra benefits like gym memberships or dental discounts. But for postal annuitants and retirees, what matters more is how well your plans coordinate. Original Medicare and PSHB work together. Medicare Advantage plans—while offering a single card solution—require trade-offs that can’t always be undone quickly.

Unless you have specific needs that a Medicare Advantage plan uniquely addresses, the blend of PSHB and Original Medicare continues to offer the broader safety net in 2025.

Protecting Your Access and Benefits in the Long Run

Switching to Medicare Advantage can seem like a shortcut to savings or convenience. But if you’re used to the wider net of benefits and coverage under PSHB with Original Medicare, that shortcut may cost you more than you bargained for—especially in flexibility, coordination, and future access.

If you’re unsure, don’t rush. Talk to a licensed agent listed on this website to understand how your PSHB plan interacts with Medicare and how any changes may affect you both now and later.