Key Takeaways

• Medicare Advantage (Part C) plans may appear attractive due to all-in-one coverage, but critical coverage limitations, restrictions, and cost-sharing rules often surprise Postal Service Health Benefits (PSHB) members.

• Understanding the coordination between PSHB plans and Medicare Advantage is vital before making any changes that could affect your provider access, prescriptions, or out-of-pocket liability.

Understanding Medicare Advantage at a Glance

Medicare Advantage, or Medicare Part C, offers an alternative to Original Medicare by packaging hospital (Part A), medical (Part B), and usually prescription drug (Part D) coverage under a single plan. These plans are run by private companies approved by Medicare. While they are designed to simplify coverage, they come with detailed restrictions and cost-sharing rules that can impact your access to care if you’re also relying on PSHB.

As a Postal Service annuitant or employee approaching age 65, you may be evaluating whether to enroll in a Medicare Advantage plan. Before making this decision, it’s important to know exactly how these plans operate and where they may fall short when compared with coordinating your PSHB coverage with Original Medicare.

Why Network Rules May Limit Your Access

Many Medicare Advantage plans operate as HMOs or PPOs. These plan types impose different restrictions:

• HMO (Health Maintenance Organization) plans generally require you to see doctors and specialists within their network. You often need a referral from a primary care doctor to see a specialist.

• PPO (Preferred Provider Organization) plans allow more flexibility but may charge higher costs if you go out of network.

If you live in a rural area or plan to travel frequently, these limitations can significantly affect your access to care. PSHB plans tend to offer broader national networks, especially valuable if you’re retired and relocate or travel often. Combining PSHB with Original Medicare typically means wider provider access without being tied to one local network.

Drug Coverage May Not Be As Broad As You Think

Many Medicare Advantage plans include Part D prescription drug coverage. However, each plan maintains its own formulary (list of covered drugs), which can differ significantly. These formularies may exclude specific brand-name or specialty medications or place them in high-tier categories with steep copayments or coinsurance.

PSHB plans that coordinate with Medicare often provide access to more comprehensive drug formularies, particularly if you’re enrolled in the integrated Medicare Part D Employer Group Waiver Plan (EGWP) under PSHB. This includes protections such as:

• A $2,000 annual out-of-pocket cap on prescription costs in 2025

• $35 monthly insulin cost-sharing limit

• Wider pharmacy networks and mail-order options

If you opt for a Medicare Advantage plan and decline PSHB drug coverage, you could face formulary restrictions that result in higher medication costs or denied coverage.

Hidden Out-of-Pocket Costs Add Up Fast

Medicare Advantage plans often advertise low monthly premiums, but what you pay during the year depends on cost-sharing rules. These include:

• Copayments for every office visit, test, or procedure

• Coinsurance for certain treatments and hospital stays

• Annual out-of-pocket maximums that are much higher than those in PSHB

In 2025, the maximum out-of-pocket limit for Medicare Advantage in-network services is $9,350, with up to $14,000 for combined in-network and out-of-network expenses. By contrast, most PSHB plans maintain lower annual out-of-pocket limits and offer cost-sharing reductions if you’re enrolled in both Medicare Part B and your PSHB plan.

Prior Authorization Can Delay or Deny Care

Medicare Advantage plans often require prior authorization for certain procedures, durable medical equipment, specialty medications, and even hospital admissions. This means your provider must get approval from the plan before you can receive care.

While designed to control costs, these requirements can create frustrating delays or outright denials, even for medically necessary services. By contrast, Original Medicare combined with PSHB coverage typically does not require such extensive pre-approval.

For retirees with chronic or complex medical conditions, these bureaucratic steps in Medicare Advantage can be a major burden.

Switching Away from PSHB Has Long-Term Consequences

If you drop your PSHB coverage in favor of a Medicare Advantage plan, re-enrollment isn’t guaranteed. Outside of the PSHB Open Season (which runs from November to December), you can only make changes due to a Qualifying Life Event (QLE). Moreover, some individuals who decline PSHB coverage after retirement may permanently lose access unless specifically exempt.

Unlike Medicare Advantage, PSHB provides:

• Continuity of coverage throughout life, as long as you continue paying premiums

• The ability to insure eligible family members

• Valuable coordination benefits when paired with Medicare

Once you give up PSHB, you could find yourself unable to return and locked into narrower Medicare Advantage options for the long term.

Dental, Vision, and Hearing Benefits Aren’t Always Guaranteed

Some Medicare Advantage plans offer supplemental benefits like dental, vision, and hearing coverage. However, these are not standardized, and benefit levels vary widely. Some plans may:

• Only cover basic preventive services

• Impose annual limits as low as a few hundred dollars

• Require use of a narrow network of dentists or audiologists

In contrast, Postal Service retirees can maintain FEDVIP dental and vision coverage, which is federally regulated, nationally available, and offers comprehensive benefits. Coordinating FEDVIP with Original Medicare and your PSHB plan often results in more robust and predictable coverage.

Travel and Emergency Coverage Gaps

Most Medicare Advantage plans only cover urgent and emergency care outside of your plan’s service area. Routine care during travel, even within the U.S., may not be covered unless you’re in a PPO with out-of-network flexibility.

If you split time between multiple states or travel often, relying solely on Medicare Advantage can leave you paying out of pocket for out-of-network visits. Original Medicare with PSHB coverage generally ensures nationwide access to care without location-based restrictions.

Coordinating PSHB with Medicare Provides Better Protection

When you enroll in Medicare Part A and Part B and remain in your PSHB plan, you create a powerful partnership that often results in:

• Lower out-of-pocket costs through waived deductibles or reduced copayments

• Access to broader provider networks

• Enhanced prescription coverage via EGWP

• Fewer prior authorization hassles

In 2025, many PSHB plans integrate with Medicare to offer Part B premium reimbursements, lower coinsurance rates, and superior coordination of benefits. These features are not always available in Medicare Advantage.

Annual Review Is Crucial

Every fall from October 15 through December 7, Medicare Advantage enrollees can switch plans during the Medicare Open Enrollment Period. However, this is separate from the PSHB Open Season, which typically runs from mid-November through mid-December.

You need to evaluate changes to:

• Medicare Advantage plan networks and formularies

• PSHB premiums and benefits

• Medicare rules and cost-sharing limits

Missing one enrollment window or misaligning your elections could result in lost coverage or higher expenses. Always review your Annual Notice of Change (ANOC) and coordinate your decisions between Medicare and PSHB timelines.

Choosing Based on Your Retirement Timeline

Your age and retirement status also play a critical role in how these choices affect you:

• If you retire before age 65, PSHB remains your primary coverage until you’re eligible for Medicare.

• At age 65, Medicare becomes primary, and PSHB becomes secondary if you enroll in Part B.

• If you skip Medicare Part B, your PSHB plan may increase your out-of-pocket costs.

• If you retired on or before January 1, 2025, you are generally exempt from mandatory Medicare Part B enrollment under PSHB.

Once you enroll in Medicare Advantage, your PSHB plan may coordinate differently or be waived entirely, depending on your enrollment choices.

What This Means for You in 2025

As a Postal Service employee or retiree in 2025, you face a crucial landscape of change:

• The PSHB Program is now separate from the FEHB system

• Medicare Part B enrollment is required for many new retirees

• Prescription benefits are now integrated with Medicare Part D EGWP

• PSHB plans may offer cost-sharing enhancements only for those with Part B

Choosing Medicare Advantage may exclude you from these integrated PSHB benefits. Understanding the details behind each plan option is more important than ever.

The Right Fit Depends on the Fine Print

What may look like an all-in-one solution under Medicare Advantage can fall short when you compare it to the layered protections of PSHB and Original Medicare. Reviewing:

• Network access

• Prescription formularies

• Out-of-pocket maximums

• Coordination benefits

• Enrollment rules

is essential to determine the actual value of a plan. Making the right decision in 2025 could save you thousands annually and ensure better long-term access to care.

Make Your Decision with Clarity, Not Assumptions

Medicare Advantage can appear simple on the surface, but hidden trade-offs often catch people off guard. When paired correctly, PSHB and Original Medicare offer more predictable costs, fewer restrictions, and better protection.

If you’re uncertain about what makes sense based on your health needs, retirement timeline, or PSHB eligibility, get in touch with a licensed agent listed on this website. They can walk you through your plan options and help ensure you’re not overlooking the details that could end up costing you later.