Key Takeaways

• Medicare Part C, also known as Medicare Advantage, continues to grow in popularity among PSHB-eligible retirees, but many enrollees misunderstand what is and isn’t included.

• Key services such as out-of-network coverage, skilled nursing, and coordination with PSHB drug benefits may be limited or carry higher costs under some Part C plans.

Medicare Advantage Is on the Rise—But What Does That Mean for PSHB Enrollees?

Enrollment in Medicare Part C plans is increasing steadily. As of 2025, more than half of all Medicare beneficiaries nationwide are enrolled in a Part C plan. For Postal Service Health Benefits (PSHB) annuitants, the growth of Medicare Advantage options has introduced a tempting alternative to Original Medicare and traditional PSHB coordination.

But rising popularity doesn’t necessarily mean wider protection. Many enrollees don’t realize until after enrollment that these plans may come with significant limitations. Understanding what you might be trading away is critical, especially if you’re already enrolled in PSHB or plan to combine it with Medicare.

What Medicare Part C Includes

Medicare Part C is a bundled plan that replaces Original Medicare Parts A and B. All Part C plans are required to provide at least the same level of coverage as Original Medicare. Most plans also offer additional benefits, such as:

• Limited dental, vision, and hearing services

• Wellness programs

• A prescription drug plan

Because these plans are run by private insurers under contract with Medicare, the actual benefits can vary widely.

What Medicare Part C Leaves Out

When you enroll in a Part C plan, you’re agreeing to accept its specific structure of cost and coverage in exchange for bundled convenience. However, not all services or scenarios are treated equally. Here are critical gaps and limitations you need to weigh:

1. Out-of-Network Coverage Is Often Restricted

Most Medicare Advantage plans operate under Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) models. These often restrict you to a network of providers. If you go outside this network:

• You may be responsible for a larger share of the cost

• Services may be denied entirely unless pre-approved

• Emergency care is generally covered, but follow-up care may not be

This matters greatly for PSHB enrollees who might be used to the broader access of FEHB-style networks.

2. Skilled Nursing Facility (SNF) Access May Be Limited

Under Original Medicare, stays in a skilled nursing facility are generally covered after a qualifying inpatient hospital stay. Part C plans may:

• Impose stricter pre-authorization requirements

• Restrict you to a smaller number of in-network SNFs

• Require higher daily coinsurance after a certain number of days

PSHB plans that coordinate with Original Medicare often waive or reduce cost-sharing. If you switch to Part C, you may forfeit that assistance.

3. Prescription Drug Integration Can Get Complicated

Many PSHB annuitants are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) through their PSHB plan. If you enroll in a Medicare Advantage plan with built-in drug coverage:

• You may lose access to the EGWP and its associated benefits, like lower coinsurance or expanded pharmacy networks

• If you opt out of the Part C drug coverage, you might not be allowed to rejoin your PSHB EGWP for the rest of the calendar year

• You could face delays in getting certain medications covered due to tighter formulary rules

This trade-off is often overlooked until a high-cost medication is suddenly denied.

4. Prior Authorizations Can Delay Care

Unlike Original Medicare, Part C plans commonly require prior authorization for a wide range of services:

• Diagnostic imaging (like MRIs or CT scans)

• Physical therapy

• Durable medical equipment

These authorizations are not always immediate. If you’re used to prompt scheduling under your PSHB plan when paired with Original Medicare, these delays can be frustrating and even risky.

5. Supplemental Benefits Sound Generous but May Be Narrow

Many Medicare Advantage plans highlight extra benefits like meal delivery, transportation, or fitness memberships. While these perks may look attractive on paper:

• The benefit may have limited availability by region

• You might need to meet strict health conditions to qualify

• Coverage caps are often lower than expected

Unlike PSHB benefits, which are regulated through the Office of Personnel Management (OPM) and designed for a wide population, these extra services in Part C are more targeted and sometimes hard to use in practice.

Comparing Part C to PSHB + Original Medicare

If you’re a Medicare-eligible PSHB enrollee, you generally have two major routes:

• Stay enrolled in a PSHB plan and combine it with Original Medicare (Parts A and B)

• Drop PSHB and enroll in a Medicare Advantage (Part C) plan instead

Let’s break down what each offers in 2025.

While Part C may offer lower monthly costs, it introduces constraints that can affect your access to care. If your health is stable and you rarely need out-of-network services, this might not be a concern. But if you have multiple conditions, see specialists, or live in multiple regions throughout the year, these limitations can become problematic.

What Happens to Your PSHB Plan When You Enroll in Part C

If you choose to enroll in a Medicare Advantage plan in 2025 and drop your PSHB coverage:

• Your PSHB plan will be terminated, and you cannot re-enroll until the next Open Season

• If you want to return to PSHB in the future, you must wait for the next enrollment window, typically held from November to December

• Rejoining PSHB is not automatic and requires active enrollment

If you instead keep PSHB and enroll in a Part C plan, you could end up paying for two forms of coverage that do not coordinate well. PSHB plans are designed to work with Original Medicare, not Medicare Advantage.

Medicare Advantage Enrollment Timelines and PSHB Coordination

Timing matters. Here are key timelines to be aware of:

• Initial Enrollment Period (IEP): A 7-month window around your 65th birthday

• Annual Enrollment Period (AEP): October 15 to December 7 each year

• PSHB Open Season: Typically runs from November through December

If you are planning to switch to or from a Medicare Advantage plan and want to coordinate it with PSHB changes, align both changes within these periods.

Also, note that if you’re required to enroll in Medicare Part B to maintain your PSHB coverage (as is the case for many annuitants in 2025), switching to Part C without maintaining Part B could disqualify you from PSHB eligibility.

How Medicare Advantage Affects Cost Protections Under PSHB

When you combine PSHB with Original Medicare, many PSHB plans offer:

• Waived deductibles

• Lower copayments

• Coinsurance benefits

But if you forgo Original Medicare and switch to Part C:

• You may lose access to these cost-sharing reductions

• You could face separate copays or coinsurance not covered under your new plan

• Prescription drug benefits through PSHB’s EGWP plan would end unless explicitly retained, which is rare

This shift can create higher out-of-pocket expenses in the long run, despite lower premiums.

Why You Should Review the Annual Notice of Change (ANOC)

Every fall, Medicare Advantage plans send out an Annual Notice of Change (ANOC). This document outlines:

• Any changes in premiums, deductibles, and copayments

• Updates to drug formularies

• Provider network changes

It is crucial to compare this document with your current PSHB plan’s Open Season brochure to ensure that the changes align with your needs. What seems cost-effective one year can shift dramatically the next.

Informed Choices Help You Avoid Regret Later

Enrollment decisions are often driven by premiums or advertising, but the real story lies in coverage, flexibility, and coordination with PSHB. Medicare Advantage is not inherently bad, but it’s not always aligned with the broader protection and simplicity that many PSHB retirees expect.

Carefully compare what you gain versus what you give up. Pay attention to your health status, provider preferences, medication needs, and willingness to manage authorization hurdles. If you decide to enroll in a Part C plan, document every step, know your rights, and keep a backup plan for returning to PSHB if needed.

Make Sure Your Health Coverage Choice Works With Your Retirement Goals

If you’re a PSHB enrollee nearing Medicare eligibility, take time to understand the lasting implications of switching to Medicare Advantage. Look past the surface-level perks and dig into the real structure of the plan. You have worked for years to earn your benefits. Don’t rush a decision that affects your access to care for the rest of your retirement.

For personalized help, get in touch with a licensed agent listed on this website who can walk you through your PSHB options, Medicare coordination rules, and the trade-offs involved in choosing a Medicare Advantage plan.