Key Takeaways

• Medicare Advantage may not coordinate as seamlessly with PSHB as traditional Medicare does, leading to unexpected coverage limitations or disruptions.

• While PSHB plans are built to integrate with Original Medicare, adding Medicare Advantage into the mix could create duplications, higher out-of-pocket costs, or loss of certain PSHB benefits.

Why This Conflict Matters More Than You Think

Now that the Postal Service Health Benefits (PSHB) Program is fully in effect in 2025, many annuitants and eligible family members are reviewing how their Medicare coverage integrates. While Medicare Part B is often required to maintain full PSHB coverage, some enrollees consider enrolling in a Medicare Advantage plan instead of sticking with Original Medicare. That choice, however, can create unexpected issues. You might believe you’re expanding your coverage—only to discover that certain PSHB benefits could be limited, delayed, or denied.

Medicare Advantage plans (Part C) are administered by private companies, not the federal government. They replace Original Medicare (Parts A and B) entirely. While they often include added features like dental or vision benefits, the trade-off is that your PSHB plan may no longer serve its original purpose effectively if you go this route.

How PSHB Was Designed to Work With Medicare

The PSHB system, which officially replaced FEHB for USPS retirees and employees starting January 1, 2025, was built with Medicare in mind—specifically Original Medicare. Here’s how the structure fits together:

• Medicare Part A (Hospital Insurance): Most enrollees receive this premium-free. PSHB plans assume you’re covered by Part A when you turn 65.

• Medicare Part B (Medical Insurance): This comes with a monthly premium. Many PSHB plans in 2025 waive certain cost-sharing elements like deductibles or copayments if you are enrolled in Part B.

• Medicare Part D (Prescription Drug Coverage): PSHB plans automatically enroll Medicare-eligible members into an Employer Group Waiver Plan (EGWP), offering generous drug coverage with a $2,000 annual out-of-pocket maximum.

If you stick with Original Medicare and your PSHB plan, you often get the best of both worlds. But when you choose Medicare Advantage instead, the integration breaks down.

What Actually Happens When You Pick Medicare Advantage

By enrolling in a Medicare Advantage plan, you are opting out of Original Medicare. That decision can have consequences:

• Your PSHB plan becomes secondary to the Medicare Advantage plan—or may not coordinate at all.

• You might lose the EGWP drug coverage that comes with your PSHB plan.

• You could be paying for two plans without added benefit—leading to duplicated costs.

Unlike Original Medicare, Medicare Advantage plans typically have restrictive provider networks. So if your PSHB plan covers certain services nationwide but your Medicare Advantage plan doesn’t, you might face denial of service or need to switch providers.

PSHB Plans Reward You for Keeping Original Medicare

The 2025 PSHB system encourages enrollees to stick with Original Medicare. Why? Because the cost-sharing coordination is clearer and more predictable. Here are some direct benefits you get by pairing PSHB with Original Medicare:

• Lower deductibles: Many PSHB plans waive or reduce deductibles if you have Medicare Part B.

• Smaller copays: You often pay less for doctor visits and other services.

• Broader provider choice: No network limitations like those imposed by Medicare Advantage.

• Automatic EGWP drug coverage: With a $2,000 annual out-of-pocket cap.

These benefits are often voided when you switch to Medicare Advantage, since those plans bundle drug coverage and medical coverage under one private plan.

Drug Coverage Conflicts Can Cause Major Issues

One of the most confusing areas is prescription drug coverage. As of 2025, PSHB plans include automatic enrollment into an EGWP plan for retirees with Medicare. However, if you enroll in Medicare Advantage—most of which come bundled with drug coverage—you typically cannot also have a separate EGWP.

This means:

• Your PSHB EGWP drug coverage may be terminated.

• You may lose out on the $2,000 annual drug cost cap exclusive to EGWP.

• You could face gaps or delays in coverage if your Medicare Advantage drug formulary differs from your old plan.

In short, it’s not just duplication—it’s possible disruption.

Medicare Part B Enrollment Requirement Doesn’t Change

A major misunderstanding is thinking that enrolling in Medicare Advantage somehow replaces the Part B requirement under PSHB. It doesn’t. If you’re subject to the 2025 Part B enrollment mandate (for example, if you retired after January 1, 2025), you must still be enrolled in Part B—whether you choose Original Medicare or Medicare Advantage.

And even if you pick Medicare Advantage:

• You still pay the standard Part B premium, currently $185 per month in 2025.

• You must continue paying your PSHB premium.

In effect, you may find yourself funding three layers of coverage with limited value-added.

Provider Networks Can Get Narrow—Fast

PSHB plans offer nationwide access to care. But Medicare Advantage plans operate through private networks. While some Medicare Advantage plans claim to be PPOs or offer national access, they still have limitations:

• Out-of-network care can be denied or only partially covered.

• Prior authorization is more common, delaying treatments.

• Provider availability fluctuates yearly, which means your current doctor may not stay in-network.

If you pair PSHB with Medicare Advantage, you risk losing the reliability and access PSHB was meant to preserve.

Timing Matters—Especially During Enrollment Periods

Understanding Medicare enrollment windows is critical to avoid unintended gaps. For example:

• Open Enrollment for Medicare: Runs October 15 to December 7 each year. This is when you can switch between Original Medicare and Medicare Advantage.

• PSHB Open Season: Occurs each year from November to December. This is when you can review and make changes to your PSHB plan.

If you coordinate changes poorly—such as enrolling in a Medicare Advantage plan during Medicare’s open enrollment but forgetting to adjust your PSHB selection—you may find yourself with mismatched or even conflicting coverage.

You Can’t Always Just Switch Back Easily

Some assume that if Medicare Advantage doesn’t work out, they can easily go back to Original Medicare and restore full PSHB coordination. Not necessarily.

While you can return to Original Medicare during open enrollment, regaining your PSHB EGWP prescription drug benefits may not be automatic. If you missed the correct timing or were dropped from the drug plan, re-enrollment could be delayed or denied until the next year.

And if your health status changes during this time, any gap in care or coverage could carry significant consequences.

What You Should Be Thinking About Now

If you’re Medicare-eligible and enrolled in PSHB, ask yourself the following:

• Am I subject to the Medicare Part B enrollment requirement under PSHB?

• Will my current plan offer better coordination if I stick with Original Medicare?

• What are the out-of-pocket implications of switching to Medicare Advantage?

• Will I lose my EGWP drug coverage—and with it, the $2,000 annual cap?

• Do I want to risk losing access to providers currently covered under my PSHB plan?

If any of those answers concern you, it’s worth reassessing whether Medicare Advantage aligns with your long-term health and financial needs.

The Trade-Offs Can Be Subtle—But Expensive

The PSHB program was developed with integration in mind. That integration starts to fall apart the moment you introduce Medicare Advantage. It’s not just about costs. It’s about coordination, consistency, and care continuity.

By sticking with Original Medicare and your PSHB plan, you maintain a structure that’s designed to work together. When you swap one piece out for something built on a separate system, even if it seems attractive on the surface, the back-end effects can be disruptive—and costly.

Speak With a Licensed Agent Before You Decide

Navigating the complexities of Medicare and PSHB isn’t something you should tackle alone. Before you commit to any change in your Medicare coverage—especially one as significant as choosing Medicare Advantage—make sure you fully understand the implications for your PSHB plan.

Get in touch with a licensed agent listed on this website who can walk you through your options, explain your plan’s specific provisions, and help you determine the right path forward based on your current eligibility, health status, and financial goals.