Key Takeaways

• Medicare Advantage does not replace Postal Service Health Benefits (PSHB); both serve different roles and are not interchangeable.

• In 2025, integrating Medicare with PSHB is often required for retirees, and misunderstanding this can lead to lapses in prescription drug coverage or high out-of-pocket costs.

Why People Think Medicare Advantage Can Replace PSHB

Medicare Advantage, also known as Medicare Part C, often sounds like a complete replacement for Original Medicare and supplemental health insurance. With its bundled benefits, managed care model, and frequent advertising, it’s easy to assume that you won’t need anything else—especially if you’re retiring soon or already retired.

But for you as a USPS retiree or annuitant under the Postal Service Health Benefits (PSHB) Program in 2025, this assumption doesn’t hold up. Medicare Advantage cannot replace PSHB. In fact, choosing the wrong path might lead you to lose essential benefits, overpay for care, or even forfeit prescription drug coverage.

What Medicare Advantage Actually Covers

Medicare Advantage plans are administered by private companies approved by Medicare. They must cover everything Original Medicare (Parts A and B) covers, and they often include extra features like:

• Vision, dental, and hearing benefits

• Prescription drug coverage (though not always)

• Managed care through provider networks (HMO/PPO)

These features make Part C look attractive. But here’s the catch: it’s not a one-size-fits-all solution. Especially not when paired—or confused—with your PSHB options.

What PSHB Covers in 2025

The PSHB program provides a federal health plan for Postal employees, retirees, and their family members. It’s replacing your FEHB coverage starting January 1, 2025. If you’re an annuitant and eligible for Medicare, you’ll need to enroll in Medicare Part B to keep full PSHB benefits.

Key PSHB features in 2025 include:

• Comprehensive medical coverage for in-network and out-of-network services

• Prescription drug coverage through a Medicare Part D EGWP if you’re Medicare-eligible

• Potentially lower cost-sharing when Medicare Parts A and B are used with PSHB

• Annual open season from November to December to make changes

You can’t drop PSHB and expect a Medicare Advantage plan to fill every gap, especially under current regulations.

PSHB and Medicare Work Together—Not in Isolation

If you’re Medicare-eligible in 2025 and enrolled in PSHB, the two programs coordinate:

• Medicare pays first (Parts A and B)

• PSHB pays second to cover remaining costs

• Part D EGWP coverage through your PSHB plan adds prescription drug benefits

If you enroll in a Medicare Advantage plan instead, the coordination breaks down. Medicare Advantage doesn’t coordinate benefits with PSHB the same way Original Medicare does. As a result, you risk:

• Losing PSHB drug coverage

• Paying duplicate premiums

• Getting stuck with unexpected bills if providers aren’t in-network

Why You May Be Required to Keep PSHB

Under the 2025 PSHB rules:

• If you’re a USPS annuitant or family member eligible for Medicare Part B, you’re generally required to enroll to stay in PSHB.

• If you opt out of Medicare Part B without qualifying for an exemption, you risk losing your PSHB drug coverage.

The law mandates this requirement for those who retired after January 1, 2025, or were under age 64 as of that date.

Even if you join Medicare Advantage, that doesn’t fulfill your obligation. Only enrollment in Original Medicare satisfies PSHB rules.

The Risks of Dropping PSHB for Medicare Advantage

While Medicare Advantage might seem like a streamlined solution, especially for non-federal retirees, for Postal retirees it introduces real risk:

• Prescription Drug Loss: You’ll lose the EGWP drug benefit under PSHB if you choose a stand-alone Advantage plan.

• Disjointed Billing: Advantage plans often require different billing procedures and provider networks, making it harder to get the integrated care PSHB was designed to support.

• Out-of-Pocket Surprises: If your Medicare Advantage plan requires prior authorizations, has narrow networks, or doesn’t coordinate with PSHB, you may pay more than you expect.

Medicare Advantage Doesn’t Satisfy PSHB Coordination Rules

The PSHB program has been built around integration with Original Medicare—not Medicare Advantage. In fact, many PSHB plans offer:

• Part B premium reimbursement

• Waived deductibles if you’re enrolled in both PSHB and Medicare Parts A and B

None of these benefits extend to those who opt into Medicare Advantage instead. If you think a Medicare Advantage plan is a replacement, you’ll end up losing coordination benefits and probably paying more.

Exemptions and Timing Still Matter in 2025

Some retirees don’t have to enroll in Medicare Part B to keep PSHB. These include:

• Annuitants who retired on or before January 1, 2025

• Employees who were 64 or older on January 1, 2025

• People living abroad

• Those with coverage from the VA or Indian Health Services

However, even if you’re exempt, enrolling in Part B gives you full coordination of benefits—especially for cost-sharing and access to prescription drug coverage.

There’s also a late enrollment penalty if you defer Part B and decide to enroll later. In 2025, that penalty adds 10% per year of delay, for life.

Should You Consider Medicare Advantage at All?

There may be scenarios where Medicare Advantage is useful—for example, if you live in a service area with excellent provider access or prefer all benefits under one insurer. But this assumes you don’t also need PSHB.

If you qualify for PSHB and are Medicare-eligible in 2025, your best combination is usually:

• Enroll in Original Medicare (Parts A and B)

• Stay enrolled in PSHB for secondary coverage

• Let PSHB handle prescription drugs through its integrated Part D EGWP

Trying to replace that structure with a Medicare Advantage plan only disrupts how your benefits work together.

What You Should Do During Open Season

Every year from November to December, you have the opportunity to review and change your PSHB plan. Here’s what to focus on:

• Confirm your Medicare Part B enrollment status if required

• Review your plan’s coordination with Medicare

• Ensure you’re not accidentally losing drug coverage by enrolling in a separate plan

• Talk to a licensed agent listed on this website if you’re considering switching or need help choosing the right PSHB option

Remember, your PSHB plan isn’t just any health plan. It’s backed by the U.S. Office of Personnel Management (OPM), comes with integrated drug benefits, and is specifically tailored to work with Medicare for Postal retirees.

The Bottom Line on Medicare Advantage vs. PSHB

In 2025, if you’re a USPS retiree or annuitant, Medicare Advantage is not a full substitute for PSHB. The two programs aren’t built to work together, and choosing Medicare Advantage could mean giving up significant benefits—especially prescription drug coverage and lower cost-sharing. Your safest route is to coordinate Original Medicare with your PSHB plan.

Make Informed Choices Before You Switch

PSHB and Medicare can be powerful when used together—but only when the right parts are in place. Medicare Advantage might appeal on the surface, but as a Postal retiree, your benefits are structured differently. Taking the wrong step could result in loss of drug coverage, higher costs, or penalties you didn’t see coming.

Before making any changes during the Open Season, be sure to:

• Review your eligibility

• Understand your coordination requirements

• Compare PSHB plan brochures carefully

To avoid costly mistakes, reach out to a licensed agent listed on this website for personalized support.