Key Takeaways

• Dropping a Medicare Advantage plan after enrolling in PSHB may seem like a way to cut costs, but it can backfire depending on your specific circumstances.

• Medicare Advantage plans still offer unique protections and coordination options that PSHB enrollees should evaluate carefully before canceling.

Why Some Enrollees Drop Medicare Advantage After Joining PSHB

In 2025, many Medicare-eligible Postal Service Health Benefits (PSHB) members are trying to simplify or reduce healthcare costs. One decision that often arises is whether to keep or drop a Medicare Advantage (Part C) plan once you’re enrolled in a PSHB plan. On the surface, the answer may look obvious: why pay for two plans that seemingly offer overlapping benefits?

However, this assumption can lead to unintended financial or coverage-related consequences. The PSHB program is tailored for USPS employees and retirees, and while it integrates with Medicare Part B, it doesn’t replace everything Medicare Advantage offers.

What Medicare Advantage Offers That PSHB Doesn’t

Medicare Advantage plans offer more than just medical coverage—they often include integrated benefits such as:

• Annual out-of-pocket cost limits, typically lower than traditional Medicare

• Supplemental dental, vision, and hearing coverage

• Coordinated care through a primary care physician

• Prescription drug coverage

• Chronic condition management programs

Some of these features are partially covered under PSHB plans, but not to the same extent or under the same structure. If you’re accustomed to managed care under Medicare Advantage, dropping the plan can remove these added conveniences.

Understanding the 2025 Coordination Between Medicare and PSHB

PSHB plans now integrate closely with Medicare Part B. For most retirees who are eligible, enrolling in Part B is required to maintain full PSHB benefits. Many plans waive or reduce cost-sharing if you are enrolled in Part B. However, this coordination is focused primarily on Original Medicare.

Medicare Advantage plans are managed by private insurers and function as a replacement for Original Medicare. Because PSHB coordinates primarily with Part B and not with private Advantage plans, this creates a gray area that confuses enrollees.

In some cases, using both a PSHB and a Medicare Advantage plan can lead to:

• Provider confusion over billing priority

• Denied claims due to overlapping coverage

• Extra administrative steps to reconcile benefits

Reasons Some Enrollees Cancel Medicare Advantage Plans

The top reasons PSHB participants drop Medicare Advantage include:

• Redundancy concerns: Belief that PSHB covers everything already

• Cost-cutting: Avoiding the second premium associated with Medicare Advantage

• Billing complications: Frustration with coordination issues

• Perceived lack of added value: Underestimating Advantage plan benefits compared to PSHB alone

These reasons aren’t entirely unfounded. But they also miss key nuances about how coverage coordination works.

When Dropping Medicare Advantage Might Be a Mistake

You should be cautious about disenrolling from Medicare Advantage in these situations:

1. You rely on a local HMO network

Many Advantage plans are structured around HMO or PPO networks, which offer care coordination and lower out-of-pocket costs. If you’ve been using a specific local plan and drop it, you may find yourself:

• Paying higher copays for specialist visits

• Losing access to familiar in-network providers

• Facing higher deductibles and coinsurance under PSHB alone

2. You have chronic health conditions

Medicare Advantage often includes disease management services that PSHB plans may not match. This includes care managers, remote monitoring, and structured medication plans.

Losing these supports can lead to:

• Higher medical risks

• More frequent ER visits

• Disrupted medication routines

3. You value out-of-pocket maximums

PSHB plans include their own annual out-of-pocket maximums, but Advantage plans typically offer even lower caps. If your Advantage plan keeps your annual expenses well below what PSHB would alone, dropping it can lead to:

• Increased exposure to unexpected medical bills

• Higher costs if you undergo major procedures or hospitalizations

4. Your Advantage plan includes enhanced drug coverage

PSHB plans automatically integrate a Medicare Part D drug plan for eligible enrollees. However, some Advantage plans may have had more favorable formularies, copay structures, or network pharmacies.

Switching plans can mean:

• Losing access to preferred medications

• Higher pharmacy costs

• Stricter prior authorization or step therapy rules

5. You use routine dental, vision, or hearing services

Some PSHB plans offer these benefits, but not all, and often with limitations. Medicare Advantage plans often package these services more comprehensively.

Dropping an Advantage plan may mean:

• Out-of-pocket costs for services you previously had covered

• Needing to find separate standalone dental or vision plans

What PSHB Plans Expect of Medicare-Eligible Retirees

Under the 2025 rules, PSHB requires most Medicare-eligible annuitants and family members to enroll in Medicare Part B unless they qualify for specific exemptions. If you retired on or before January 1, 2025, you’re generally exempt. Otherwise, you’re expected to carry Part B to maintain full PSHB benefits.

However, the decision to keep a Medicare Advantage plan is separate—and entirely optional. But optional doesn’t always mean unnecessary.

Strategic Evaluation Before Making Changes

Before canceling any Medicare Advantage plan, ask yourself these key questions:

• Have you compared your current Advantage benefits with the PSHB plan? Review copays, out-of-pocket maxes, coverage for specialists, and prescription tiers.

• Are you managing any health conditions that require continuous care coordination? If yes, determine if PSHB alone offers equivalent support.

• Do you travel frequently or split residence between states? PSHB plans may offer broader nationwide networks than local Advantage HMOs.

• Are you eligible for any Medicare Advantage Part B premium reimbursements or cost-sharing reductions that would be lost?

The timing of when you disenroll also matters. If you leave a Medicare Advantage plan outside the standard Medicare Advantage Open Enrollment Period (January 1 – March 31), you may not be able to join a new one until the next annual period (October 15 – December 7).

Coordinating PSHB With Medicare the Right Way

To reduce overlap, some PSHB enrollees with Medicare Advantage choose to:

• Use PSHB primarily for coverage and opt out of Medicare Advantage altogether

• Keep Advantage for drug, dental, or supplemental benefits only if needed

• Schedule an annual plan comparison to determine if one plan outpaces the other in value

It’s not all-or-nothing—you can tailor the setup based on what gives you the best total benefit, both medically and financially.

What Happens If You Change Your Mind?

If you drop Medicare Advantage and later decide you want back in, the timing of your decision matters. You may have to:

• Wait until the next Medicare Advantage Annual Enrollment Period

• Re-enroll during the Medicare Advantage Open Enrollment Period

• Demonstrate a qualifying life event to trigger a Special Enrollment Period

Be aware that not all plans will be available again, and benefits can change annually.

Ask Before You Cancel Anything

Talk to a licensed agent listed on this website before making decisions about dropping or keeping Medicare Advantage. The combination of PSHB with either Original Medicare or Medicare Advantage is complex, and the wrong choice could affect your out-of-pocket costs, provider access, and medication affordability.

Making Informed Medicare Choices Under PSHB in 2025

Choosing the right mix of PSHB and Medicare coverage is no longer as simple as just picking one and dropping the other. The coordination of PSHB with Medicare Part B is mandatory for many, but the decision to keep or drop Medicare Advantage requires a careful cost-benefit analysis.

Dropping Medicare Advantage may save a monthly premium in the short run—but if you rely on its supplemental benefits, cost limits, or provider access, that decision may be costly over the long term.

For personalized guidance based on your health needs and financial goals, reach out to a licensed agent listed on this website. They can walk you through a side-by-side comparison tailored to your situation.