Key Takeaways

• Medicare Part C (also known as Medicare Advantage) can clash with PSHB plan benefits if you’re not careful about how they work together.

• Enrolling in Medicare Part C may lead to a loss of PSHB coordination benefits and access to integrated prescription drug coverage, especially if you opt out of your PSHB plan.

Understanding the PSHB-Medicare Relationship in 2025

If you’re a Postal Service retiree or employee approaching age 65, you’re likely sorting through an overwhelming set of healthcare options. By now, you’ve heard of Medicare Part A and B, but the real curveball comes with Medicare Part C—and how it interacts (or doesn’t) with your Postal Service Health Benefits (PSHB) plan.

The PSHB Program officially launched on January 1, 2025, replacing FEHB for USPS employees and retirees. With this transition, certain rules around Medicare coordination became even more significant—especially for those eligible for Medicare.

What Medicare Part C Actually Is

Medicare Part C, or Medicare Advantage, is an alternative to Original Medicare (Parts A and B) offered by private plans approved by Medicare. These plans bundle hospital, medical, and often prescription drug coverage into one plan.

In theory, it sounds convenient. But convenience can sometimes come at the cost of flexibility or hidden gaps—especially when combined with a federal health plan like PSHB.

Where Medicare Part C Creates Confusion for PSHB Enrollees

While you might think adding a Medicare Advantage plan could double your benefits, that’s rarely the case. In fact, using both a PSHB plan and Medicare Part C at the same time can lead to overlapping or conflicting coverage. Here’s why:

• PSHB plans are designed to coordinate with Original Medicare (Parts A and B), not Part C.

• If you enroll in Medicare Part C, you may have to drop your PSHB plan—this can leave you without PSHB prescription drug coverage or federal protections.

• PSHB plans often offer lower cost-sharing and waived deductibles when paired with Original Medicare, which you lose by switching to Part C.

The Issue of Dual Enrollment

Many retirees are surprised to learn that you generally cannot remain enrolled in a PSHB plan and a Medicare Advantage plan at the same time unless you’re only using Part C for supplemental benefits—which is rare and difficult to manage.

If you actively enroll in a Medicare Advantage plan, that decision typically disenrolls you from your PSHB plan. The implications are substantial:

• You’ll lose any PSHB coordination benefits, like reduced copays and deductibles.

• You may lose your prescription drug coverage under the PSHB Part D Employer Group Waiver Plan (EGWP).

• If you later decide to drop your Medicare Advantage plan, re-enrollment in PSHB may only be available during Open Season or after a qualifying life event.

PSHB Plans Work Best with Medicare Parts A and B

The 2025 PSHB structure is built to work in harmony with Original Medicare. When you enroll in Parts A and B, your PSHB plan typically:

• Waives your PSHB deductible, reducing upfront costs.

• Offers lower coinsurance or copayments for hospital and outpatient services.

• Integrates with Part D through the EGWP, offering full drug coverage with a $2,000 out-of-pocket cap for the year.

• May reimburse part of your Medicare Part B premium, depending on the plan.

None of these benefits apply if you leave PSHB for Medicare Part C.

Cost Considerations in 2025

There’s a common misconception that Medicare Advantage plans are more affordable. However, while some advertise lower premiums, you must consider the trade-offs:

• Loss of PSHB coordination benefits can lead to higher out-of-pocket costs.

• No Part B premium reimbursement from your PSHB plan once you leave.

• Drug coverage may be more restrictive than what PSHB offers through the EGWP.

In 2025, the Medicare Part B premium is $185/month. Many PSHB plans offer premium reimbursements or benefits that offset this amount when you remain within the PSHB + Original Medicare structure.

Enrollment Timelines That Matter

Let’s talk about timing. Mistakes during enrollment windows can have lasting effects:

• Initial Enrollment Period (IEP): Your 7-month window around your 65th birthday (3 months before, the month of, and 3 months after).

• Open Season for PSHB: Runs every year from November to December. This is when you can switch or drop plans.

• Annual Medicare Open Enrollment: October 15 to December 7. This is when you can enroll in or change Medicare Advantage plans—but again, doing so may remove you from PSHB.

• Special Enrollment Periods (SEP): Triggered by certain life events like moving or losing other coverage.

The takeaway? Be careful about when—and how—you switch plans.

Prescription Drug Coverage: A Crucial Component

One major advantage of staying within the PSHB and Original Medicare framework is prescription drug coverage. In 2025:

• PSHB enrollees with Medicare Part B are automatically enrolled in an EGWP-based Part D plan.

• This includes a $2,000 annual out-of-pocket cap for covered drugs.

• If you leave PSHB for Medicare Part C, you might lose this benefit or be subject to more restrictive drug formularies.

Additionally, some Medicare Advantage plans bundle drug coverage in a way that doesn’t compare well to the EGWP structure’s cost protections and wide access.

Why You Might Be Tempted—But Should Pause

It’s easy to be drawn to Medicare Advantage because of the packaging: “all-in-one” coverage with some extra perks. But for Postal retirees or employees:

• These plans weren’t built with federal benefits in mind.

• You risk losing layered protections and cost-sharing arrangements available under PSHB + Original Medicare.

• It’s often difficult to switch back once you’ve disenrolled from your PSHB plan.

You’ll need to weigh more than just premiums—you must factor in access to providers, coverage rules, and long-term flexibility.

Coordination of Benefits Is the Key Factor

When you combine PSHB with Original Medicare, each program pays its share of your healthcare costs. This coordination:

• Reduces your out-of-pocket liability.

• Allows broader provider choice.

• Simplifies paperwork and reimbursement in many cases.

By contrast, Medicare Advantage generally takes over your Medicare coverage entirely. That means:

• Providers must follow the plan’s network and authorization rules.

• You may face stricter limits on where and how you can receive care.

• Coordination with PSHB is disrupted or completely severed.

Are There Any Exceptions?

A few scenarios allow some level of overlap, but they are limited and complex:

• If your Medicare Advantage plan does not include drug coverage, and you retain PSHB for drugs only—this is uncommon and administratively risky.

• Some retirees may consider using Medicare Advantage only for extra benefits like dental or vision. However, most plans require full enrollment, making PSHB dropout unavoidable.

Unless you fully understand the administrative process and legal boundaries, these exceptions can cause more harm than benefit.

Your Long-Term Flexibility May Depend on Your 2025 Decision

If you enroll in Medicare Advantage and later change your mind, you can’t always simply go back:

• Re-enrolling in PSHB is only allowed during Open Season or if you qualify for a Special Enrollment Period.

• Not all plans offer guaranteed issue protections, which means you might be subject to medical underwriting if you’re trying to purchase a Medigap plan later.

Your safest route, if you’re Medicare-eligible and have access to PSHB, is to combine it with Original Medicare for maximum flexibility.

How to Protect Your Benefits Moving Forward

The PSHB system is new as of 2025, and confusion is expected. But the best way to avoid costly mistakes is by staying informed and:

• Reviewing plan brochures and benefit summaries thoroughly.

• Knowing your enrollment deadlines and what each plan does and doesn’t cover.

• Avoiding automatic enrollment into a Medicare Advantage plan without full understanding of the consequences.

• Speaking to a licensed agent listed on this website before making any coverage changes.

Making Sense of Medicare and PSHB Choices

Medicare Part C plans may work well for the general population—but if you’re covered under the Postal Service Health Benefits Program in 2025, you need to be extra cautious. What may look like a convenient upgrade might end up cutting you off from benefits you’ve earned through years of federal service.

Before making any move, reach out to a licensed agent listed on this website for personalized guidance. Your retirement health coverage is too important to risk on assumptions.