Key Takeaways

• Enrolling in a Medicare Advantage plan while covered under the Postal Service Health Benefits (PSHB) program can create overlaps, conflicts, or unexpected gaps in your coverage if you don’t understand how the two programs interact.

• Medicare Advantage plans operate differently than Original Medicare, and PSHB plans are structured with coordination rules that may or may not align with the structure of a private Medicare Advantage plan.

Understanding the Basics: PSHB and Medicare Advantage

The Postal Service Health Benefits (PSHB) Program replaces FEHB coverage for USPS employees and retirees starting in 2025. As a PSHB enrollee, you are eligible for robust health benefits that include integration with Medicare once you become eligible, typically at age 65.

Medicare Advantage, or Medicare Part C, is a private health plan alternative to Original Medicare (Parts A and B). It is offered by private insurance companies and includes all services covered under Medicare Parts A and B, and often additional benefits such as dental, vision, and hearing.

At first glance, you might think that combining PSHB with Medicare Advantage will result in broader coverage or lower out-of-pocket costs. But it’s more complicated than that.

When You Become Medicare-Eligible

Most PSHB annuitants and family members become Medicare-eligible at age 65. At this point, you’re expected to enroll in Medicare Part B unless you qualify for an exemption. Failure to do so may result in a loss of certain PSHB benefits, including prescription drug coverage.

But what about Medicare Advantage?

Medicare Advantage plans are technically a replacement for Original Medicare. When you enroll in a Medicare Advantage plan, the plan becomes your primary insurance, not Medicare. This change can disrupt how your PSHB plan coordinates benefits.

Coordination of Benefits Can Be Complex

Unlike with Original Medicare, where your PSHB plan can act as secondary coverage to Medicare, coordination with Medicare Advantage is not always seamless.

Here’s why:

• Medicare Advantage is not secondary or supplemental insurance; it stands alone as your Medicare plan.

• PSHB plans are built to coordinate with Original Medicare, especially when Part B is active. If you are enrolled in a Medicare Advantage plan, your PSHB plan may not coordinate benefits in the same way.

• Some PSHB plans may limit coordination with Medicare Advantage plans entirely, potentially leaving you responsible for more out-of-pocket costs.

In short, dual enrollment may not work the way you expect. You should carefully review your PSHB plan brochure or call your plan to understand how it handles coordination with Medicare Advantage.

Prescription Drug Coverage: Overlapping or Missing?

Under PSHB, if you are Medicare-eligible and enrolled in a PSHB plan, your prescription drug coverage is provided through a Medicare Part D Employer Group Waiver Plan (EGWP). This coverage includes features such as:

• A $2,000 annual out-of-pocket cap on prescription drugs

• A $35 monthly insulin cap

• Automatic enrollment (unless you opt out)

If you instead sign up for a Medicare Advantage plan with built-in Part D coverage, you may not be eligible to keep the PSHB-provided Part D coverage. This can trigger coordination issues or result in you losing access to the EGWP drug coverage.

Additionally, if you enroll in a standalone Part D plan alongside a Medicare Advantage plan that doesn’t include drug coverage, you may be disenrolled from your Medicare Advantage plan. The rules are strict and can lead to disruptions if not followed correctly.

How Cost Sharing Could Change

With Medicare Parts A and B, your PSHB plan can often waive deductibles, reduce copayments, and offer cost-sharing benefits. For example:

• Many PSHB plans waive the annual deductible if you are enrolled in Medicare Part B.

• Coinsurance for in-network services can drop from 30% to as low as 10%.

• Copayments for services like specialist visits or urgent care may be significantly reduced.

These savings are built into the structure of PSHB when it coordinates with Original Medicare. If you enroll in a Medicare Advantage plan, you may lose these savings because your PSHB plan may not coordinate in the same way.

Consider the Limitations of Medicare Advantage

Medicare Advantage plans often come with restrictions that don’t exist under Original Medicare, such as:

• Limited provider networks (you may need to see in-network doctors)

• Prior authorization requirements for certain services

• Different coverage rules that may not align with PSHB expectations

These limitations can become problematic if you’re used to the broad provider access and flexibility that PSHB plans offer.

Also, if you move or split time between different states or regions, your Medicare Advantage plan may not cover services out-of-network unless it’s an emergency.

Can You Have Both?

Technically, yes. You can be enrolled in both a Medicare Advantage plan and a PSHB plan. But the bigger question is: should you?

Ask yourself the following:

• Does your PSHB plan coordinate with Medicare Advantage?

• Will you lose out on waived cost-sharing benefits?

• Will your prescription drug coverage be disrupted?

• Are your providers in-network under both plans?

If you cannot answer these questions confidently, it may be time to pause before enrolling in a Medicare Advantage plan.

Automatic Enrollment in PSHB Drug Coverage Still Applies

If you are enrolled in PSHB and become Medicare-eligible, your plan will automatically enroll you in the associated Medicare Part D EGWP unless you opt out. But here’s the catch:

• If you opt into a separate Medicare Advantage plan with Part D coverage, it can override the EGWP enrollment.

• If you try to keep both, you may be disenrolled from one of them by CMS.

This is where timing and order of enrollment become critical. Always speak with a licensed agent listed on this website before making changes to your Medicare coverage.

Enrollment Periods You Should Watch

Understanding Medicare enrollment periods is essential to avoid penalties and ensure smooth coordination with PSHB:

• Initial Enrollment Period (IEP): Begins three months before you turn 65, includes your birth month, and ends three months after. This is when you should ideally enroll in Medicare Parts A and B.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year. If you missed your IEP, this is your next chance, but it may result in late penalties.

• Medicare Advantage Open Enrollment Period: Also January 1 to March 31. Allows you to switch Medicare Advantage plans or return to Original Medicare.

• Annual Enrollment Period (AEP): From October 15 to December 7. Allows plan changes for the following year.

These dates must align with your PSHB plan renewal or change period, which typically occurs from November to December each year.

Exemptions from Medicare Part B Requirement Still Matter

Certain annuitants and family members are exempt from the PSHB Medicare Part B requirement, including:

• Those who retired on or before January 1, 2025

• Those aged 64 or older as of January 1, 2025

• Those residing outside the U.S.

• Those enrolled in VA or Indian Health Service programs

If you fall into one of these categories, you may have more flexibility in choosing a Medicare Advantage plan. However, you still need to consider the implications for PSHB coordination.

Seek Out Plan Brochures and OPM Resources

You can’t make an informed decision without reading the plan brochures carefully. Look for:

• The section on Medicare coordination

• Details about waived cost sharing

• Limitations related to Medicare Advantage

• Drug coverage implications

You can find this information through:

• The official OPM website

• KeepingPosted.org for annuitants

• LiteBlue for employees

But for help interpreting these materials and applying them to your specific situation, a licensed agent listed on this website is your best resource.

Making Sense of Medicare Advantage in a PSHB World

The transition to PSHB in 2025 brought structural changes, but it also reinforced the importance of understanding how Medicare options interact with your existing health benefits. Medicare Advantage plans can be beneficial in some cases, but they aren’t always the right fit for PSHB enrollees.

The key is timing, coordination, and informed decision-making. Don’t assume that broader coverage equals better results. The wrong move could cost you waived deductibles, lower copayments, and seamless drug coverage.

If you’re unsure, take the next step: get in touch with a licensed agent listed on this website to get personal guidance on your situation.