Key Takeaways

• Enrolling in Medicare Advantage (Part C) while you already have PSHB coverage can result in unnecessary overlaps and costs in 2025.

• PSHB plans are designed to integrate with Original Medicare, not Medicare Advantage, which can lead to conflicts in billing and benefits.

Understanding the Role of PSHB in 2025

In 2025, the Postal Service Health Benefits (PSHB) Program replaces FEHB for postal workers and retirees. This program is structured to work seamlessly with Original Medicare—Parts A and B. If you are Medicare-eligible, enrolling in Part B is often required to keep your PSHB plan fully active.

By design, PSHB and Medicare function together. Medicare becomes the primary payer, and PSHB serves as the secondary payer. This coordination can lower your out-of-pocket costs significantly. However, the system is not set up to coordinate with Medicare Advantage plans (Part C).

What Medicare Advantage Actually Is

Medicare Advantage, or Part C, is a private alternative to Original Medicare. It bundles Part A, Part B, and often Part D (drug coverage) into one plan. Many of these plans offer extra benefits, but these come with trade-offs.

• You usually must use a specific network of providers.

• You may need referrals for specialists.

• You have a defined service area—moving out of that area can disrupt your coverage.

While some people choose Medicare Advantage for convenience, it’s not built to integrate with PSHB. Instead, it replaces Original Medicare, which PSHB expects you to have.

What Happens When You Sign Up for Both PSHB and Part C

When you enroll in a Medicare Advantage plan, you are effectively opting out of Original Medicare’s Part A and B benefits. This disrupts the coordination between Medicare and PSHB, creating several problems:

• PSHB will no longer coordinate benefits with Medicare. Since you’re not on Original Medicare, the PSHB plan can’t function as a secondary payer.

• You may pay higher out-of-pocket costs. Without the benefit of coordination, you lose cost-sharing advantages such as waived deductibles and lower copayments.

• You may face network limitations. While PSHB plans often include broad national provider networks, Medicare Advantage plans limit you to a specific list of providers.

• Prescription coverage becomes more complex. PSHB integrates drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). If you have a Part C plan that includes drug benefits, it may conflict with your PSHB prescription plan.

Can You Use Both PSHB and Part C Together?

Technically, yes—but it rarely makes financial or practical sense.

• You can keep PSHB and enroll in Medicare Advantage, but PSHB will treat your Medicare Advantage plan as your primary insurer. You may not receive the full benefits of your PSHB plan.

• Your premiums will continue. You will still pay for your PSHB premiums, even if you’re not receiving full benefits due to your Medicare Advantage plan.

• There is no cost reimbursement. You won’t be reimbursed by PSHB for your Part C premium. Any cost-sharing benefits PSHB typically offers in coordination with Part B are lost.

In short, you’re paying for two plans but only fully using one.

The Impact on Prescription Drug Coverage in 2025

In 2025, PSHB prescription drug coverage is provided automatically through a Medicare Part D EGWP for all Medicare-eligible enrollees. This includes:

• A $2,000 annual out-of-pocket maximum for drug costs.

• Coverage for a wide range of medications.

• A $35 insulin copay limit under federal policy.

If you enroll in a Medicare Advantage plan that includes drug coverage, you may be forced to drop the PSHB Part D EGWP coverage. Opting out of this integrated coverage can have consequences:

• You may be left without access to the broader PSHB pharmacy network.

• Your total drug costs may increase without the federal protections built into the EGWP.

• Re-enrollment into PSHB’s drug plan could be limited or delayed.

What You Might Miss by Replacing Part B With Part C

Some Medicare Advantage plans advertise bundled benefits. But these extras often come with coverage trade-offs that may not be worth it if you already have PSHB.

When you stick with Original Medicare and Part B:

• PSHB plans often waive or reduce deductibles.

• Many offer reimbursement for part of your Part B premium.

• PSHB plans may cover services that Advantage plans exclude or restrict.

By contrast, switching to Part C could mean:

• Losing access to national provider networks.

• Being subject to prior authorization hurdles.

• Giving up your plan’s Part B premium incentives.

The Timeline Matters: What Happens After Enrollment

If you make the switch to a Medicare Advantage plan during Medicare Open Enrollment (October 15 to December 7), the new plan takes effect January 1. This is the same time PSHB benefits begin each year.

If you later change your mind, switching back can be complicated:

• You may need to wait for the next Open Season to adjust your PSHB enrollment.

• You might not be able to rejoin your PSHB plan’s EGWP immediately.

• Any benefits you gave up—like Part B premium reimbursements—won’t be restored retroactively.

These timing challenges can result in lapses or disruptions in your health coverage.

Who Should Consider Avoiding Part C Altogether?

You should probably avoid enrolling in a Medicare Advantage plan if:

• You already have a PSHB plan and are eligible for Medicare.

• You want to retain access to broad networks and reduced cost-sharing.

• You rely on PSHB for integrated prescription coverage.

• You value flexibility in where you receive care.

For PSHB annuitants in particular, the Part C option usually introduces more complexity than benefit.

What to Do Instead of Enrolling in Part C

Instead of moving to a Medicare Advantage plan, consider these steps:

• Enroll in Medicare Parts A and B. If you’re Medicare-eligible, this preserves your PSHB benefits.

• Review your PSHB plan’s Medicare coordination. Look for plans that offer premium reimbursements and lower cost-sharing for Part B enrollees.

• Take advantage of the EGWP drug coverage. The 2025 version offers protection from high costs and supports a wide range of prescriptions.

• Consult with a licensed insurance agent. You can review all your options and avoid costly mistakes.

Why Sticking With PSHB and Original Medicare Makes Sense

In 2025, PSHB plans are optimized for use with Original Medicare. This pairing gives you the broadest coverage, reliable cost protection, and the most stability.

• You maintain access to a nationwide provider network.

• You avoid duplicate premiums and coordination issues.

• You retain all prescription drug benefits available under the PSHB EGWP.

• You benefit from cost-saving incentives designed specifically for Medicare Part B enrollees.

Medicare Advantage plans, while attractive on the surface, are not necessary when you already have a robust federal benefit like PSHB.

If You’re Thinking About Medicare Advantage, Talk to Someone First

Adding Medicare Part C to your health coverage might sound like a good idea, but for most PSHB members in 2025, it causes more problems than it solves. The loss of benefit coordination, increased costs, and risk of limited provider access can outweigh any convenience Part C might offer.

If you’re unsure, get in touch with a licensed insurance agent listed on this website. They can help you weigh the pros and cons based on your specific eligibility and PSHB plan.