Key Takeaways

• Medicare Part C plans often limit network flexibility and may exclude certain critical benefits that PSHB enrollees expect.

• If you rely on PSHB and enroll in Part C without understanding its limits, you may face high out-of-pocket costs or denied services—especially when it matters most.

What Medicare Part C Promises—and What It May Leave Out

Medicare Part C, also known as Medicare Advantage, is often presented as a consolidated alternative to Original Medicare (Parts A and B), with some plans bundling additional benefits. On the surface, it sounds ideal—one plan, simplified coverage. But for Postal Service retirees and employees who transition to Medicare while enrolled in a Postal Service Health Benefits (PSHB) plan, relying solely on a Medicare Advantage plan in 2025 may lead to underinsurance.

While these plans may offer perks such as dental or vision coverage, they also come with significant trade-offs. Chief among these is limited provider access, which can disrupt care continuity—especially for retirees who’ve relied on the broad provider networks of their PSHB plan.

1. Medicare Advantage Is Not a True Substitute for PSHB

PSHB plans are structured to work in coordination with Original Medicare, particularly Parts A and B. When you replace Original Medicare with a Part C plan, you may be stepping out of this coordination model altogether.

Your PSHB plan assumes you are enrolled in Parts A and B. This assumption influences how cost-sharing, coordination of benefits, and access to services are handled. If you substitute Part C for Original Medicare:

• Some PSHB plans will not coordinate benefits at all.

• Others may impose higher copayments or deductibles.

• You may lose access to specific services or enhanced benefits that are otherwise available when Part B is in place.

2. Network Restrictions Can Interrupt Your Care

Medicare Part C plans operate under managed care models—mostly HMOs or PPOs. This structure means:

• You may be required to use in-network doctors and facilities.

• Out-of-network services may not be covered or may cost significantly more.

• You typically need prior authorizations for certain treatments.

This can be a dramatic shift for those who’ve had freedom of choice under a PSHB plan. The result? A preferred specialist might suddenly be out-of-network, or a routine test may require additional hurdles—if it’s approved at all.

3. Coverage May Look Full—but Be Functionally Thin

Many Part C plans advertise bundled coverage, including extra benefits like gym memberships, transportation, or hearing aids. But that bundled structure often comes at the cost of medical flexibility.

Coverage under Part C is often subject to:

• Tight utilization review

• Annual plan changes without guaranteed renewal of specific benefits

• Limits on geographic coverage, which can be problematic for snowbirds or retirees who move frequently

In contrast, PSHB plans working alongside Original Medicare typically offer:

• Nationwide coverage

• Less restrictive pre-authorization rules

• More stable benefit structures from year to year

4. Emergency Situations Can Expose Hidden Gaps

Many Part C enrollees only discover the limitations of their plan during a medical emergency. For example:

• If you’re outside your plan’s service area, coverage for non-emergency care may be denied

• Emergency room visits often come with higher copays

• Follow-up care or specialist visits may be delayed or subject to tighter restrictions

When combined with a PSHB plan, Original Medicare helps cushion these surprises. But if you replace that coverage with a Part C plan, you’re relying on that single plan to do it all.

5. Lack of Integration with PSHB Drug Coverage

PSHB plans automatically include prescription drug coverage, often through an Employer Group Waiver Plan (EGWP) that coordinates with Medicare Part D. If you enroll in a Medicare Advantage plan that includes its own drug coverage, you may:

• Disenroll from your PSHB plan’s drug coverage unintentionally

• Face coordination issues that result in denied prescriptions or higher pharmacy costs

• Risk losing access to the more generous drug cost protections offered through your PSHB EGWP

In 2025, this issue is more critical than ever due to the new $2,000 out-of-pocket cap under Part D. The cap applies under PSHB’s EGWP drug coverage, but not necessarily under all Medicare Advantage plans.

6. Hidden Costs That Add Up Quickly

Even if your Part C plan offers low or no additional premiums, the hidden costs can be significant:

• Coinsurance and copayments for common services like specialist visits, durable medical equipment, or imaging

• Separate out-of-pocket maximums for medical and drug coverage

• Denied services requiring appeals

For retirees on fixed incomes, these variable costs can be destabilizing. In contrast, pairing PSHB with Original Medicare offers a more predictable cost-sharing experience.

7. Plan Changes That Occur Annually

Medicare Advantage plans are not static. They update benefits, networks, and costs every year. If you fail to review your Annual Notice of Change (ANOC), you may unknowingly lose access to critical services.

In 2025, many enrollees are discovering that previously covered services are no longer included or now require higher cost-sharing. If you’re coordinating PSHB with Medicare, this inconsistency may leave you without the protection you expected.

8. Coordination Confusion Can Delay or Deny Care

When your providers, Medicare, and PSHB plan are unclear on which coverage applies first—or how a service should be billed—delays can occur. Common points of confusion include:

• Who pays first: Medicare Advantage plan or PSHB?

• Which ID card should be used at appointments?

• Are referrals required, and if so, by whom?

When coordination breaks down, the result is often unpaid claims, incorrect billing, or gaps in treatment.

9. Part C Doesn’t Always Count Toward FEHB Creditable Coverage

For PSHB-eligible retirees, it’s important to maintain creditable coverage for drug benefits. While PSHB’s integrated Part D coverage meets this requirement, some standalone Medicare Advantage plans do not. This can have future consequences if you ever try to re-enroll in PSHB drug coverage or apply for standalone Part D coverage later.

You might also face:

• Late enrollment penalties if the coverage is not deemed creditable

• Gaps in drug coverage during plan transitions

10. Rejoining PSHB Isn’t Always Automatic

If you disenroll from PSHB while enrolled in Medicare Part C, returning later may require waiting until the next Open Season. This restriction can leave you without full coverage for months if your Medicare Advantage plan changes or underperforms.

In 2025, PSHB Open Season occurs from November to December. Outside of this window, you need a Qualifying Life Event (QLE) to make changes—which may not apply in your situation.

What This Means for Your 2025 Coverage Strategy

In 2025, the risk of underinsurance under Medicare Part C is heightened for PSHB enrollees. While the appeal of simplified, all-in-one coverage is strong, the trade-offs often go unnoticed until it’s too late. Relying on a Medicare Advantage plan in place of Original Medicare and a PSHB plan may:

• Reduce your provider access

• Increase your out-of-pocket costs

• Complicate your coordination of benefits

• Limit your access to drug cost protections

If you’re already Medicare-eligible or turning 65 this year, now is the time to evaluate whether Medicare Advantage is worth the risk.

Speak With Someone Who Knows Your Options

It’s not always obvious that a Medicare Advantage plan could leave you exposed to higher costs or denied care—especially if you assume it works like your PSHB plan. But the differences matter. If you’re unsure how to align your PSHB and Medicare benefits for 2025, speak with a licensed agent listed on this website. They can help you understand the fine print before you make a move that’s hard to undo.