Key Takeaways

• Enrolling in a Medicare Part C (Medicare Advantage) plan can create conflicts with your Postal Service Health Benefits (PSHB) coverage, especially when coordination of benefits and prescription drug coverage come into play.

• Before enrolling in Part C, it’s essential to understand how PSHB already integrates with Medicare Part A and B to avoid duplicate premiums, reduced benefits, or accidental disenrollment from PSHB prescription drug benefits.

Understanding What PSHB Covers

The Postal Service Health Benefits (PSHB) Program is specifically designed for Postal Service employees, retirees, and their families. Starting in 2025, PSHB replaces FEHB for eligible Postal participants and provides:

• Comprehensive medical coverage, including hospital, physician, and outpatient services

• Access to nationwide provider networks

• Integrated prescription drug coverage for Medicare-eligible enrollees through a Part D Employer Group Waiver Plan (EGWP)

• Cost-sharing benefits, such as reduced deductibles and copayments, when Medicare Part B is in effect

PSHB plans are structured to work hand-in-hand with Medicare Parts A and B. Once you enroll in both, many PSHB plans waive or reduce deductibles and lower copays. The system is optimized for this pairing, not for pairing with Medicare Part C.

What Medicare Part C Actually Offers

Medicare Part C, also known as Medicare Advantage, is a private insurance alternative to Original Medicare. These plans typically bundle Parts A and B, and often include:

• Prescription drug coverage (PDP)

• Vision, dental, and hearing benefits

• Wellness perks or fitness programs

Medicare Advantage plans require beneficiaries to use the insurer’s provider network. While that may work for some people, it introduces limitations and overlaps for those who already have robust PSHB coverage.

Where the Overlap Happens

When you enroll in a Medicare Advantage plan, you are essentially replacing Original Medicare with a private version. For PSHB enrollees, this creates conflicts in several areas:

1. Prescription Drug Coverage

Medicare Advantage plans that include drug coverage (MAPD) often conflict with PSHB’s automatic enrollment into a Medicare Part D EGWP. The PSHB program provides this EGWP coverage as an enhancement to your plan when you are enrolled in Medicare Part B.

The problem is that you cannot be enrolled in two Medicare Part D drug plans at the same time. If you enroll in a Medicare Advantage plan with drug coverage, your PSHB EGWP enrollment is terminated, and your prescription drug benefits under PSHB are dropped. Re-enrollment is limited and may not be guaranteed.

2. Premium Duplication

Both PSHB and Medicare Advantage plans charge monthly premiums. PSHB premiums are already comprehensive and often offer premium subsidies from the federal government. Adding a Medicare Advantage plan means paying another set of premiums, often for redundant coverage.

You could end up:

• Paying a PSHB premium for benefits you no longer fully use

• Paying a Medicare Advantage premium for coverage that may not coordinate with your PSHB plan

This duplication offers little financial value and may actually cost you more.

3. Provider Network Conflicts

PSHB plans often offer wide provider access and national coverage. Medicare Advantage plans, however, generally operate with narrower networks. Enrolling in a Medicare Advantage plan means you might have to switch providers or seek referrals, even though your PSHB plan already allows broader access.

If your Medicare Advantage plan does not contract with the same providers as your PSHB plan, you risk:

• Losing access to your preferred physicians

• Receiving out-of-network penalties

• Complicating coordination between your PSHB and Medicare Advantage providers

4. Claims and Coordination of Benefits

PSHB plans coordinate directly with Original Medicare Parts A and B. They have longstanding mechanisms for payment processing, shared claims data, and seamless coverage integration.

Medicare Advantage plans, on the other hand, manage claims independently. They do not coordinate with Original Medicare because they replace it. That means PSHB can no longer act as a secondary payer, and your coverage becomes fragmented.

As a result:

• Your PSHB plan may no longer offer the same cost-sharing reductions

• Claims may be denied or delayed due to coordination issues

• You may lose access to PSHB plan perks and benefits that rely on integration with Medicare Parts A and B

What PSHB Requires When You’re Medicare-Eligible

As of 2025, many Medicare-eligible annuitants and their dependents must enroll in Medicare Part B to maintain full PSHB benefits. This requirement does not extend to enrolling in Medicare Part C.

Medicare Part B is required because:

• PSHB plans waive or reduce costs when coordinated with Part B

• It enables automatic enrollment in the EGWP drug coverage

By contrast, enrolling in Part C disqualifies you from EGWP coverage. Therefore, it is not only unnecessary but potentially harmful to your PSHB experience.

Exceptions to the Medicare Part B Requirement

You are exempt from the Part B requirement if:

• You retired on or before January 1, 2025

• You were aged 64 or older on January 1, 2025

• You reside overseas

• You receive healthcare benefits through Veterans Affairs (VA) or Indian Health Services (IHS)

However, even if you fall under an exemption, you should still carefully review how Part C may interfere with PSHB coordination.

How the Timing Affects Your Coverage

Enrollment periods matter. Here’s what you need to keep in mind:

• Initial Enrollment Period for Medicare Advantage: Starts three months before the month you turn 65 and lasts for seven months total.

• Open Enrollment Period: October 15 to December 7 every year, for switching between Medicare Advantage and Original Medicare.

• General Enrollment Period for Part B: January 1 to March 31 each year, for those who missed their initial enrollment.

If you switch to a Medicare Advantage plan during the fall Open Enrollment, your enrollment takes effect January 1 of the following year. This could interrupt your PSHB drug coverage if you’re not careful.

What Happens If You Drop PSHB Instead

Some retirees may consider dropping PSHB entirely in favor of Medicare Advantage. While this might seem appealing due to bundled benefits or regional provider networks, it has significant downsides:

• You permanently forfeit your PSHB coverage unless you qualify for a re-enrollment opportunity through a Qualifying Life Event

• You lose the value of employer premium contributions (which cover about 72% of your PSHB premium)

• You become fully dependent on a private Medicare Advantage plan, with no access to federal protections or plan consistency guaranteed by PSHB

In most cases, PSHB plus Medicare Parts A and B offers more reliable long-term security than replacing it with Medicare Advantage.

Cost Comparisons Can Be Misleading

It’s common to compare premiums and cost-sharing when evaluating Medicare Advantage plans, but this misses a crucial point: PSHB premiums already reflect substantial government contributions and coordination with Medicare.

PSHB annuitants in 2025 pay approximately:

• $241.07 monthly for Self Only

• $521.06 monthly for Self Plus One

• $567.02 monthly for Self and Family

These rates already assume that Medicare Part B is in play and that you’re accessing reduced cost-sharing, waived deductibles, and prescription drug coverage through EGWP. Adding a Medicare Advantage plan will not eliminate these premiums; it simply adds more layers of cost and complexity.

Key Recommendations Before Making a Decision

Before enrolling in a Medicare Part C plan, ask yourself:

• Are you currently satisfied with your PSHB provider network and coverage?

• Have you compared out-of-pocket costs under PSHB with Medicare Parts A and B versus a Medicare Advantage plan?

• Do you understand that Medicare Advantage enrollment will cancel your EGWP drug benefits under PSHB?

• Have you spoken with a licensed agent listed on this website to review all your options?

Failing to ask these questions can result in:

• Unexpected prescription drug costs

• Disenrollment from PSHB drug benefits

• Duplicate coverage that increases your monthly premiums

The Safer Route for Most Postal Retirees

For the majority of annuitants, staying with PSHB and enrolling in Original Medicare Parts A and B is the most effective, financially sound option. This setup gives you:

• Lower deductibles and copays under PSHB

• Automatic drug coverage through EGWP

• Continued access to wide provider networks

• Federal oversight and stability

Medicare Advantage plans may look attractive on the surface, but when layered on top of PSHB, they create overlap, confusion, and in many cases, a net loss of value.

Protect Your PSHB Benefits with the Right Medicare Strategy

The PSHB system is structured to work best when paired with Medicare Parts A and B. Adding a Medicare Advantage plan disrupts that structure and may interfere with your drug coverage, increase your costs, and reduce access to federal employee protections. Before making any changes to your coverage, it’s vital to evaluate your entire benefits picture.

Get in touch with a licensed agent listed on this website to make an informed decision. Your benefits are too important to leave to guesswork.