Key Takeaways

• Enrolling in a Medicare Part C plan while also maintaining PSHB coverage can result in redundant benefits, increased out-of-pocket costs, and potential coordination issues.

• Before you consider Medicare Advantage (Part C), it is essential to understand how it interacts with PSHB and whether the benefits justify the trade-offs.

Understanding What Medicare Part C Covers in 2025

Medicare Part C, also known as Medicare Advantage, is an alternative way to receive your Medicare benefits. In 2025, these plans must include all services covered by Parts A and B, and many include additional services like dental, vision, or hearing. However, Part C plans are offered through private insurance companies, and the cost-sharing structures and provider networks differ significantly from traditional Medicare.

Because these plans operate under a managed care model, they often use network restrictions and preauthorization requirements. While they may appear to offer more benefits on the surface, these extra features could clash with the structure of your PSHB plan.

What Makes PSHB Plans Different in 2025

The Postal Service Health Benefits (PSHB) Program now fully replaces FEHB for Postal Service employees and retirees as of January 1, 2025. PSHB plans are tailored specifically for USPS workers and annuitants and offer integrated coordination with Medicare.

Key features of PSHB include:

• Strong cost-sharing protections when combined with Medicare Part A and Part B

• Inclusion of a Medicare Part D prescription drug plan (through EGWP)

• No requirement to enroll in Part C to access additional benefits

For Medicare-eligible PSHB annuitants, the program is designed to complement Parts A and B. That structure can break down if you enroll in a Medicare Advantage plan.

How Enrollment in Part C Can Undermine PSHB Coordination

Once you enroll in a Medicare Advantage plan, that plan becomes your primary coverage for Medicare services. This has several implications:

• Medicare will no longer pay primary under traditional Part A and B rules.

• Your PSHB plan may not coordinate effectively with a private Part C plan.

• Benefits could overlap or conflict, leading to unnecessary copayments, denied claims, or delays.

PSHB plans are designed with the assumption that you remain enrolled in Original Medicare (Parts A and B). When you sidestep that structure with Part C, the PSHB plan may no longer function as intended, especially for major services like inpatient care, durable medical equipment, and skilled nursing facilities.

Cost Trade-Offs That May Catch You Off Guard

While some Part C plans appear to reduce costs by consolidating benefits, combining them with PSHB in 2025 may have the opposite effect. Here’s why:

• You still pay Part B premiums (at least $185/month in 2025), regardless of your Part C enrollment.

• You may also pay additional premiums for the Part C plan itself.

• You continue paying PSHB premiums, which are not reduced or waived because you have a Part C plan.

This means you’re potentially paying three premiums—Part B, Part C, and PSHB—without necessarily receiving three times the value. Moreover, out-of-pocket caps under Part C and PSHB do not combine, so you could hit multiple spending limits depending on how the plans interact.

Conflicts in Provider Networks and Access Rules

PSHB plans generally allow nationwide access to care, with broad networks and few restrictions. In contrast, many Medicare Advantage plans have localized or restricted networks and may require referrals.

By enrolling in a Part C plan:

• You may lose access to your preferred providers if they are outside your Medicare Advantage network.

• You might be subject to stricter preauthorization rules, especially for high-cost care like imaging, outpatient surgery, or hospital admissions.

• Care coordination between PSHB and your Medicare Advantage plan may be limited, with providers confused about which plan to bill first or what rules apply.

This can be especially problematic if you travel frequently, split your time between states, or depend on specific providers who do not accept Medicare Advantage.

What Happens to Your PSHB Drug Coverage?

In 2025, PSHB plans automatically include prescription drug coverage for Medicare-eligible enrollees through an Employer Group Waiver Plan (EGWP) integrated with Part D. This means:

• If you stay with PSHB and enroll in Part A and B, your drug coverage is already included.

• If you enroll in Part C, your plan will typically include its own drug coverage.

You cannot be enrolled in two Medicare drug plans at the same time. Therefore, if you enroll in a Part C plan with drug coverage, your PSHB prescription coverage will be terminated.

This is not a minor change. Losing EGWP benefits through PSHB could mean giving up:

• Lower out-of-pocket drug costs through the $2,000 annual cap

• Enhanced formularies available to PSHB members

• Coordination benefits between your medical and pharmacy benefits

If you later regret your Part C enrollment, rejoining the PSHB drug plan may not be simple and could require waiting until the next open enrollment period.

Enrollment Windows and Timing Considerations

PSHB open season runs from November to December each year. This is the time when you can make changes to your PSHB plan, including electing a different option or dropping coverage (though that decision is usually irreversible for annuitants).

Medicare Advantage plans also follow the same annual enrollment period, from October 15 to December 7.

If you mistakenly enroll in a Part C plan during this period and it interferes with your PSHB benefits, you may not be able to make a change until the next year unless you qualify for a Special Enrollment Period (SEP).

SEPs may apply in limited circumstances:

• Moving out of your plan’s service area

• Losing your Part C plan involuntarily

• Other qualifying life events (such as Medicaid eligibility changes)

If you make a mistake in your 2025 enrollment, it could take months to correct.

Common Misunderstandings That Lead to Dual Enrollment

Many Postal retirees believe enrolling in a Medicare Advantage plan will “replace” the need for PSHB or make it cheaper. This is not accurate in 2025.

Here are the most common misassumptions:

• That PSHB will automatically coordinate with any Medicare plan.

• That Part C will be accepted by all providers in the PSHB network.

• That Part C adds value on top of PSHB instead of duplicating it.

• That choosing Part C will reduce PSHB premiums (it won’t).

Because PSHB and Medicare Part C operate under different regulatory frameworks, they do not integrate smoothly unless specifically designed to. PSHB plans in 2025 are not designed to supplement Medicare Advantage.

Who Should Reconsider Enrolling in Part C?

You may want to avoid Medicare Advantage altogether in the following cases:

• You are currently satisfied with your PSHB coverage and how it works with Medicare Parts A and B.

• You regularly see providers outside local networks or travel often.

• You rely on seamless coordination between your medical and prescription drug coverage.

• You want the security of keeping all your benefits aligned under a federal program tailored to USPS retirees.

Medicare Advantage may be appropriate in rare cases where PSHB coverage is no longer active or if you opt out of PSHB entirely. But for most Postal annuitants, the trade-offs do not work in your favor.

Keep PSHB and Medicare Aligned for the Most Value

The PSHB program was created to integrate with Original Medicare—not to compete with it. You’re expected to be enrolled in Part A (premium-free for most) and Part B to maintain full PSHB benefits.

If you choose to deviate from that model by enrolling in a Medicare Advantage plan, you risk disrupting that integration. Your premiums may stack, your benefits may become redundant, and you may find yourself caught in a web of billing confusion and denied claims.

For most USPS retirees, sticking with PSHB and Original Medicare delivers more predictable coverage, streamlined claims, and greater access.

Protect Your Health and Finances by Making the Right Choice

The decision between Original Medicare and Medicare Advantage affects how well your PSHB plan works. If you’re not fully confident in how your benefits interact, it’s time to ask questions.

Speak with a licensed agent listed on this website before making any enrollment changes. A quick conversation now could save you from months of confusion, overlapping costs, or coverage disruptions later.