Key Takeaways

• Combining your PSHB plan with a Medicare Advantage plan in 2025 might seem appealing at first, but can bring unexpected complexities, limitations, or even duplicated costs.

• Not all Medicare Advantage benefits align well with PSHB coverage, and certain restrictions could impact access to providers or result in unnecessary out-of-pocket expenses.

Why Combine PSHB with Medicare Advantage in the First Place?

When you become eligible for Medicare, you might be tempted to layer a Medicare Advantage plan on top of your Postal Service Health Benefits (PSHB) coverage. The promise of extra benefits, broader networks, or lower copays sounds attractive—especially when you’re trying to maximize healthcare value in retirement.

But 2025 brings new realities. With the PSHB program now fully operational, coordination with Medicare has its own design, especially for retirees required to enroll in Medicare Part B. The idea of adding Medicare Advantage on top of that isn’t always as seamless—or beneficial—as it sounds.

The Coordination Structure Between PSHB and Medicare

The PSHB program is designed with Medicare integration in mind. For Medicare-eligible annuitants and family members, enrollment in Medicare Part B is typically mandatory unless exempt. Once you’re enrolled in Part B, your PSHB plan coordinates benefits with Original Medicare, not Medicare Advantage.

Here’s how that coordination normally works:

• Medicare Part A and B become your primary payer.

• Your PSHB plan becomes your secondary payer, covering copayments, coinsurance, and some services Medicare doesn’t cover.

• Prescription drug coverage is typically provided through a Medicare Part D Employer Group Waiver Plan (EGWP), linked to your PSHB plan.

This dual-layered system—Medicare as primary, PSHB as secondary—is already comprehensive. Introducing a third layer through Medicare Advantage disrupts this structure.

What Happens When You Enroll in a Medicare Advantage Plan?

Medicare Advantage plans (also called Part C) are all-in-one alternatives to Original Medicare. When you enroll in one:

• You are no longer using Medicare Parts A and B as your primary coverage. Your Part C plan takes over completely.

• Your PSHB plan can no longer coordinate benefits the way it was designed to. In many cases, your PSHB coverage may become redundant or you may have to pay full PSHB premiums without getting full value.

This is where the trouble often starts.

Potential Pitfalls of Mixing PSHB with Medicare Advantage

1. Duplicated Premium Costs

If you’re enrolled in a Medicare Advantage plan, you’re still paying your PSHB premiums unless you cancel it—and canceling PSHB can jeopardize your lifetime federal health coverage.

That means:

• You’re paying for PSHB but possibly not using it to its full extent.

• You’re also paying for Medicare Part B and possibly other Medicare Advantage-related costs.

This triple payment scenario (PSHB + Part B + Part C) can erode any financial benefit you hoped to gain.

2. Conflicts in Provider Networks

Most PSHB plans offer nationwide access to providers and do not require referrals. Medicare Advantage plans, however, often limit you to local networks, HMOs, or PPOs, sometimes requiring referrals for specialist care.

This mismatch can result in:

• Denied services if you go out of network with your Medicare Advantage plan.

• Confusion when trying to coordinate care between two plans not designed to work together.

3. Prescription Drug Coverage Overlaps

PSHB plans for Medicare-eligible retirees already provide integrated prescription drug coverage through EGWP, which complies with Medicare Part D.

If you enroll in a Medicare Advantage plan that includes drug coverage:

• You might be automatically disenrolled from your PSHB EGWP coverage.

• This could result in loss of certain PSHB prescription benefits or even entire plan cancellation in some cases.

4. Losing Access to PSHB Cost-Sharing Benefits

Some PSHB plans offer enhanced benefits for retirees enrolled in Medicare Part B:

• Reduced deductibles

• Lower copayments

• Reimbursements for some Part B premiums

These benefits are designed around coordination with Original Medicare, not Medicare Advantage. If you switch to a Medicare Advantage plan, you may lose these cost-sharing enhancements altogether.

What About Temporarily Testing Medicare Advantage?

Some retirees consider enrolling in a Medicare Advantage plan to “test it out.” But there are risks to this approach:

• You may be automatically removed from your PSHB plan’s drug coverage.

• Returning to Original Medicare may not restore PSHB benefits in the same way if deadlines are missed or if PSHB enrollment windows are closed.

• The PSHB program does not work like the private marketplace—you can’t just hop in and out.

Remember: once you make a change that affects your PSHB eligibility or enrollment, reversing it could be difficult or even impossible.

Exceptions: When Might Medicare Advantage Be Worth Exploring?

There are rare situations where adding Medicare Advantage might be worth considering:

• If you no longer qualify for PSHB (e.g., due to loss of annuitant eligibility)

• If your local providers accept only certain Medicare Advantage plans and you need care continuity

• If your financial situation changes and you opt to drop PSHB entirely (though this has permanent consequences)

In such cases, be sure to speak to a licensed agent listed on this website before making any decisions.

What You Should Do Instead

Rather than combining PSHB with Medicare Advantage, consider the original PSHB + Medicare model:

• Enroll in Medicare Part A (if you’re not already—most do automatically at 65)

• Enroll in Medicare Part B as required under PSHB rules

• Let your PSHB plan coordinate benefits with Original Medicare

This setup:

• Ensures you keep your federal health benefits intact

• Reduces your out-of-pocket costs due to dual coverage

• Allows you to benefit from waived deductibles or lower copayments in many PSHB plans

Understanding the Timeline: 2025 and Beyond

Since January 1, 2025, all Medicare-eligible Postal Service annuitants and their covered family members are subject to the PSHB Medicare integration rules. This includes:

• Mandatory Part B enrollment unless exempt

• Automatic coordination of drug benefits through EGWP

• Ineligibility for PSHB coverage if you voluntarily decline Part B without an exemption

These structural features are not built to accommodate Medicare Advantage. Trying to overlap the two often leads to:

• Coverage duplication

• Lost PSHB benefits

• Unexpected disenrollments

Think Before You Layer Medicare Advantage on Top of PSHB

Choosing Medicare Advantage while maintaining PSHB may sound like a plan to get the best of both worlds—but in 2025, it often leads to complicated consequences.

PSHB was redesigned to work with Original Medicare, not compete with it. Adding a third party into that mix changes how your coverage functions, how your providers are reimbursed, and what benefits you can actually access.

To stay protected and avoid gaps, you should:

• Stick to Original Medicare plus PSHB

• Use your PSHB plan’s included Medicare Part D drug coverage

• Take advantage of any cost-sharing perks offered by your PSHB provider when paired with Medicare

If you’re unsure what the best path is for your personal situation, speak to a licensed agent listed on this website.

Protect Your Coverage Before You Change Anything

Medicare Advantage can seem like an upgrade—but if you already have PSHB and Medicare, it can end up costing you more and covering you less.

Before you enroll in any additional Medicare plan, take the time to understand how your current PSHB benefits work with Medicare, what happens if you opt out, and how changes could affect your future eligibility.

The smarter strategy in 2025 is to make PSHB and Original Medicare work together for you—not against each other.