Key Takeaways

• Some PSHB plans caution against enrolling in Medicare Part C (Medicare Advantage) due to coverage overlaps and potential loss of benefits.

• Coordinating Medicare with PSHB requires precision—using Part C could void drug and cost-sharing benefits designed for Part B enrollees.

Why Your PSHB Plan Cares About Part C

The Postal Service Health Benefits (PSHB) Program, newly implemented in 2025, was built with integration in mind—specifically with Original Medicare (Parts A and B). While you have the right to enroll in Medicare Advantage (Part C), many PSHB plans advise against it. And that’s not something to overlook.

In fact, some PSHB brochures go as far as stating that enrolling in a Part C plan could limit or negate the PSHB plan’s ability to pay benefits. That’s because Medicare Advantage plans replace Original Medicare, essentially becoming your primary payer. This switch affects how PSHB plans coordinate benefits and deliver drug coverage.

Understanding the implications now can help you avoid unintended coverage gaps and unexpected costs later.

What Happens When You Choose Medicare Advantage Instead of Original Medicare

Medicare Advantage plans are an alternative to Original Medicare. When you enroll in one, you are no longer covered directly under Part A and Part B. Instead, your care is managed by a private plan approved by Medicare.

Here’s what changes:

• Medicare becomes secondary: Your PSHB plan is built to coordinate with Medicare Part B as primary. If you opt for Part C, it doesn’t follow the same billing structure.

• PSHB plan may limit benefits: Some PSHB carriers may reduce their cost-sharing benefits or refuse to pay when Medicare Advantage is primary.

• Drug coverage may be duplicated: PSHB plans offer Medicare Part D drug coverage through a specialized arrangement. If you enroll in a Part C plan that includes drug coverage, it could trigger disenrollment from PSHB drug benefits.

This is not a theoretical problem—it’s clearly stated in many PSHB plan documents for 2025.

Why Part B Works Seamlessly With PSHB, But Part C Does Not

PSHB plans are designed to complement Original Medicare. That means when you are enrolled in Part B:

• Your PSHB plan becomes secondary payer, helping reduce or eliminate coinsurance, deductibles, and other out-of-pocket costs.

• You remain eligible for Medicare Part D drug coverage through your PSHB plan’s employer group waiver program (EGWP).

• Some plans even offer Part B premium reimbursement or waive deductibles and copays when Medicare is used first.

This built-in coordination disappears when you choose Medicare Advantage. Instead of layering your benefits, you’re replacing one system with another. That disruption means certain PSHB perks may not apply to you.

The Drug Coverage Conflict You Can’t Ignore

All PSHB plans that serve Medicare-eligible annuitants are required to offer prescription drug coverage through Medicare Part D. This is automatically included when you’re enrolled in both PSHB and Medicare Part B.

But there’s a catch:

If you sign up for a Medicare Advantage plan that also includes drug coverage, Medicare rules prohibit you from being enrolled in another Part D plan—including the one attached to your PSHB coverage.

Here’s what that could lead to:

• You lose PSHB drug coverage unless you opt out of the Medicare Advantage drug plan.

• You may have no drug coverage at all if your Advantage plan doesn’t offer the medications or pharmacy network you expect.

• Re-enrollment is limited: Once you opt out or are disenrolled from your PSHB drug coverage, getting it back may require waiting for the next Open Season or meeting special enrollment conditions.

This makes Part B enrollment the far more stable option for those wanting to retain full PSHB benefits.

Your PSHB Plan Isn’t Required to Coordinate With Part C

PSHB plans are required by OPM to coordinate benefits with Original Medicare, but they are not required to coordinate with Medicare Advantage. This makes your PSHB plan’s coverage optional or secondary in unclear ways when Part C is involved.

Depending on the plan, this could mean:

• Denied claims for services already paid or managed by your Part C plan

• A lack of secondary coverage support

• Confusion over provider networks and approvals

This non-alignment introduces risks that aren’t easy to fix mid-year.

Plan Warnings Are Already in Print

Reviewing 2025 PSHB brochures reveals something notable: clear, proactive warnings against pairing Medicare Advantage with PSHB plans.

These documents include language such as:

• “If you enroll in a Medicare Advantage plan, your benefits under this PSHB plan may be reduced or not payable.”

• “Enrollment in a Medicare Advantage plan may result in cancellation of your prescription drug coverage through this PSHB plan.”

• “This plan coordinates with Original Medicare only.”

That means this isn’t a policy difference between insurers—it’s an integration issue across the PSHB system.

You Could Lose Out on Cost Savings

Many PSHB plans offer benefits that go beyond traditional insurance structures, but only when coordinated with Original Medicare:

• Lower out-of-pocket maximums when Medicare pays first

• Waived hospital or specialist copays when Medicare B is your primary

• No deductibles for inpatient or outpatient services

• Extra pharmacy benefits available only through Part D group plans

When you opt for Medicare Advantage instead, you forfeit those advantages. You’ll only receive what the Part C plan offers—and your PSHB plan may become just a passive secondary option (or none at all).

Switching Back Isn’t Always Immediate

If you try Medicare Advantage and realize it doesn’t work well with PSHB, switching back isn’t always quick or easy.

• You may have to wait for the next Medicare Advantage Open Enrollment Period (January 1 to March 31) to disenroll.

• PSHB plans may not reinstate your full benefits, especially drug coverage, until the next November–December Open Season.

• Late enrollment penalties could apply if you didn’t enroll in Part B when first eligible and try to switch later.

This delay could leave you exposed to high out-of-pocket costs for months.

What to Consider Before Choosing Part C With PSHB

If you are still considering Medicare Advantage despite these challenges, ask yourself:

• Does the plan coordinate with your PSHB plan?

• Will you lose access to employer-sponsored drug coverage?

• Can you rejoin your original coverage outside of Open Season if needed?

• Do the providers in your Medicare Advantage plan match your current PSHB providers?

The answers may help clarify whether the switch aligns with your needs—or creates new hurdles.

Why 2025 Matters More Than Before

In 2025, PSHB officially replaces FEHB for Postal Service retirees and employees. This is a major structural shift, especially when paired with new Medicare requirements for certain enrollees.

• If you are a Medicare-eligible Postal retiree, you must enroll in Part B to keep your PSHB benefits—unless you fall under specific exemptions.

• This requirement is paired with automatic enrollment in a Medicare Part D EGWP through your PSHB plan.

Medicare Advantage enrollment disrupts both of these alignments. That’s why understanding the structure today is crucial.

Staying With Part B Could Protect Your PSHB Benefits

The strongest alignment in 2025 is between PSHB and Original Medicare. By enrolling in Parts A and B only, you ensure:

• Consistent coordination of benefits

• Full access to employer-sponsored drug coverage

• Eligibility for special cost savings and lower cost-sharing through PSHB

Medicare Advantage may sound appealing due to its bundled nature, but it rarely supports your PSHB plan’s structure the same way.

Avoid a Coverage Clash Before It Starts

You don’t need to make decisions in isolation. If you’re weighing the pros and cons of Medicare Part C while enrolled in a PSHB plan, it’s wise to explore the details with someone who knows the full landscape.

Get in touch with a licensed agent listed on this website to review your options and make sure your healthcare decisions align with your long-term retirement goals.