Key Takeaways

• Medicare Advantage plans often appeal with added benefits, but many of their limitations only become clear when you attempt to use them—especially during unexpected health events.

• As a Postal Service Health Benefits (PSHB) enrollee, your choices carry weight: the integration of PSHB with Medicare in 2025 makes understanding those tradeoffs more important than ever.

How Medicare Advantage Looks Good—At First Glance

At first, Medicare Advantage (Part C) plans might seem like an all-in-one solution. These plans are offered by private companies approved by Medicare and typically combine Parts A and B into a single package. They often advertise additional features—dental, vision, hearing, wellness benefits—which Original Medicare doesn’t cover.

But as you weigh your PSHB options in 2025, it’s critical to understand that these perks often come with hidden costs and restrictions. That’s where many enrollees get caught off guard.

The Illusion of Simplicity

Medicare Advantage plans are often marketed as simple alternatives to coordinating Original Medicare and a supplemental plan. However, what seems like simplicity can result in:

• Limited provider networks

• Strict prior authorization rules

• Complex cost-sharing structures

If you don’t fully understand how these factors work, you may find yourself struggling to get care approved or being forced to pay unexpected out-of-pocket costs.

The Network Trap: Access Isn’t as Broad as You Think

One of the most consequential tradeoffs with Medicare Advantage is access to care. Unlike Original Medicare, which lets you see nearly any provider nationwide who accepts Medicare, Medicare Advantage plans typically rely on restricted networks.

Network Types and Their Restrictions

• Health Maintenance Organizations (HMOs): Require referrals and limit you to in-network providers, except in emergencies.

• Preferred Provider Organizations (PPOs): Offer slightly more flexibility, but you’ll pay much more if you go out-of-network.

In both cases, you risk:

• Losing access to trusted specialists or local hospitals

• Paying more out of pocket for out-of-network services

• Facing coverage denials if you move or travel extensively

In the PSHB context, this could be a serious limitation, especially if you’re accustomed to the nationwide provider access FEHB plans previously offered.

Prior Authorization Can Delay—and Deny—Care

Another common frustration with Medicare Advantage plans is the requirement for prior authorization. This means the plan must approve certain procedures or services before they’re performed. While this is intended to control costs, it can sometimes restrict or delay access to necessary care.

What Requires Prior Authorization?

It varies by plan but often includes:

• Advanced imaging (MRI, CT scans)

• Physical therapy

• Home healthcare services

• Skilled nursing facility stays

• Durable medical equipment

The issue isn’t just the delay—it’s that requests can be denied. If your provider disagrees with the denial, they must appeal the decision. Meanwhile, your treatment is stalled.

This creates a disconnect between the care your provider recommends and what your Medicare Advantage plan allows.

Emergency Coverage Is Not Universal

Many enrollees assume that Medicare Advantage plans cover emergencies wherever you are. While emergency care is supposed to be covered anywhere in the U.S., some situations blur the lines between emergency and urgent care—and the definition can vary by plan.

For example:

• Out-of-network emergency care may require retroactive approval

• Urgent care while traveling may not be reimbursed without pre-authorization

• Coverage abroad is typically minimal or nonexistent

As a PSHB enrollee, this is critical to understand—especially if you travel often or move between states.

Out-of-Pocket Costs Add Up Fast

While Medicare Advantage plans often market lower monthly premiums than supplemental plans, the overall out-of-pocket costs can be substantial. In 2025, plans are allowed to set their own cost-sharing amounts, as long as they don’t exceed the maximum out-of-pocket limit set by CMS.

Key Cost Components

• Copayments: Common for doctor visits, emergency rooms, and urgent care.

• Coinsurance: A percentage of costs for hospital stays, surgeries, or specialist visits.

• Deductibles: Some plans may have them, especially for drug coverage.

• Out-of-pocket maximums: These can go as high as $9,350 for in-network services in 2025.

Once you reach the maximum, the plan covers 100% of covered services—but until then, your bills could climb quickly, especially with a serious illness or hospitalization.

PSHB participants need to be especially cautious here. If you choose a Medicare Advantage plan that doesn’t coordinate well with your PSHB coverage—or doesn’t participate in the federal program’s premium reimbursement benefits—you may miss out on the financial protection available through better-aligned options.

Prescription Drug Costs and Coverage Gaps

Medicare Advantage plans almost always include Part D drug coverage. However, just like standalone Part D plans, they come with formularies (lists of covered drugs) and tiers that affect what you’ll pay.

2025 Prescription Drug Changes to Know

• There’s a $2,000 cap on out-of-pocket drug costs under Part D starting in 2025.

• A new Medicare Prescription Payment Plan allows you to spread those costs over the year.

Even so, Medicare Advantage enrollees need to verify that their medications are on the plan’s formulary. Drug tiers may change annually, and high-tier prescriptions can still be expensive.

For PSHB retirees, prescription benefits are integrated with Part D through an EGWP (Employer Group Waiver Plan). If you opt for a Medicare Advantage plan outside of your PSHB offering, you may lose access to this integrated benefit—and face higher drug costs as a result.

Supplemental Benefits: They’re Not All They’re Promised to Be

Dental, vision, hearing, and other supplemental benefits are often highlighted in Medicare Advantage advertising. However, these benefits vary widely in scope and usefulness.

Examples of limitations include:

• Annual dental caps that are too low to cover major procedures

• Vision benefits that cover only basic exams and a small allowance for eyewear

• Hearing benefits with limited choices or providers

Some plans include over-the-counter (OTC) allowances, transportation help, or meal delivery, but these extras are not standardized. You’ll need to read the plan’s Summary of Benefits carefully to see what’s included—and what’s excluded.

For PSHB members, it’s important to note that many of these benefits are already included through your federal benefits. Relying solely on supplemental Medicare Advantage offerings may result in less comprehensive or more fragmented care.

Annual Plan Changes Can Catch You Off Guard

Every year, Medicare Advantage plans can change their:

• Premiums

• Provider networks

• Drug formularies

• Cost-sharing rules

• Covered benefits

The Annual Notice of Change (ANOC) letter is sent each fall to inform you of what’s different. If you overlook it or don’t compare it to your current needs, you could be locked into a plan that no longer serves you well.

For PSHB enrollees, this is particularly relevant during Open Season (held each November to December). This is your opportunity to reassess your plan—especially if it’s a Medicare Advantage option that may have changed significantly from the previous year.

PSHB-Specific Considerations for 2025

The 2025 transition to PSHB introduces new rules for Medicare-eligible retirees:

• You must enroll in Medicare Part B to keep your PSHB coverage, unless exempt.

• Most PSHB plans automatically coordinate with Medicare to reduce your costs.

• If you decline PSHB’s Medicare coordination and opt for a Medicare Advantage plan that doesn’t participate in PSHB, you could lose access to cost-saving features like:

  • Part B premium reimbursements

  • Lower deductibles and copays

  • Integrated Part D drug coverage

That’s why the stakes are higher than ever this year. Choosing the wrong type of Medicare Advantage plan—or misunderstanding how it interacts with your PSHB benefits—can cost you in coverage, convenience, and cash.

What You Can Do to Avoid Regret Later

To make the most of your PSHB and Medicare benefits:

• Evaluate your current healthcare needs and expected usage.

• Read the Summary of Benefits and the Evidence of Coverage documents.

• Confirm provider and pharmacy networks before enrolling.

• Compare plans during Open Season, especially those offered under PSHB.

• Ask questions—don’t rely on surface-level advertising claims.

You can also speak with a licensed agent listed on this website who understands PSHB and Medicare integration. Getting expert help can ensure you don’t miss details that can make a major difference later.

Understand the Real Costs Before You Choose

The tradeoffs involved with Medicare Advantage plans may not be clear in brochures—but they become painfully obvious when coverage is denied, costs skyrocket, or care is delayed. As a PSHB enrollee, you have a valuable opportunity in 2025 to align your health coverage wisely. Take the time to understand how Medicare Advantage interacts with your PSHB benefits, and don’t assume more benefits always means better protection.

If you’re unsure which path is right for you, talk to a licensed agent listed on this website for personalized guidance tailored to your situation.