Key Takeaways

• While Medicare Advantage plans in 2025 appear comprehensive, many come with coverage restrictions, out-of-pocket costs, and limitations that can be particularly impactful for Postal retirees relying on PSHB.

• Understanding these coverage gaps is essential to making an informed decision about your PSHB and Medicare coordination before and during Open Season.

What Medicare Advantage Really Offers in 2025

Medicare Advantage, also known as Medicare Part C, combines Medicare Parts A and B and often includes drug coverage and supplemental benefits. On the surface, this sounds like an all-in-one solution for your healthcare needs in retirement. But if you’re eligible for or already enrolled in the Postal Service Health Benefits (PSHB) program, you need to be cautious before assuming this path is fully secure.

In 2025, these plans may still look attractive due to their streamlined structure, additional benefits, and promises of coordination. But what often gets overlooked are the limitations that can cost you more than you expect, especially when paired with PSHB coverage.

Coordination with PSHB Is Not Automatic

Many Medicare Advantage plans are not fully integrated with PSHB, meaning your plan could lack alignment with the benefits you receive as a Postal retiree. This lack of integration can lead to complications, such as:

• Duplicate premiums with limited additional value

• Confusing claim processing across providers

• Missed opportunities for cost-sharing reductions available under PSHB with Original Medicare

PSHB plans that integrate with Original Medicare usually waive or reduce certain out-of-pocket costs. When you enroll in a Medicare Advantage plan instead, those benefits may no longer apply, leaving you exposed to higher expenses.

Network Restrictions Are Tighter Than You Might Think

One of the most common issues Medicare Advantage enrollees face is network restriction. Unlike Original Medicare, which allows you to see any provider who accepts Medicare nationwide, most Medicare Advantage plans operate with:

• Local or regional networks

• Prior authorization requirements

• Referral obligations for specialists

If you travel often or live in a rural area, these limitations can create major access problems. PSHB plans generally offer wider provider access, particularly when paired with Original Medicare. Switching to a Medicare Advantage plan may shrink your options without significantly lowering your costs.

Prior Authorizations Create Delays in Care

In 2025, prior authorization remains a critical point of friction in Medicare Advantage plans. This process requires providers to seek approval from the insurer before delivering specific tests, procedures, or treatments. While the system is intended to control unnecessary costs, it can lead to:

• Delayed medical treatment

• Denied claims for essential services

• Increased administrative burden on you and your providers

Postal retirees with complex health needs or chronic conditions may find that the delays caused by prior authorizations could significantly affect their health outcomes.

Out-of-Pocket Limits Can Still Add Up

All Medicare Advantage plans are required to cap in-network out-of-pocket expenses. In 2025, the maximum out-of-pocket (MOOP) limit for in-network services is $9,350, while combined in- and out-of-network expenses can reach $14,000.

These limits may appear like safety nets, but if your plan has:

• High coinsurance (e.g., 20% or more for some services)

• Frequent copayments for specialist visits or urgent care

• High cost-sharing for out-of-network services

…you may reach that MOOP quickly during a year of serious illness or hospitalization. PSHB plans that coordinate with Original Medicare often reduce or eliminate these burdens, making them more predictable for budgeting.

Prescription Drug Coverage Has Gaps Too

Most Medicare Advantage plans include prescription drug coverage, but this coverage is not always as broad or affordable as you might expect. In 2025, Medicare Part D features a $2,000 out-of-pocket cap, a positive development. However, in many Medicare Advantage plans:

• Formularies may be more restrictive

• Prior authorization or step therapy is often required

• Pharmacy networks are more limited

Postal retirees covered under PSHB and enrolled in Medicare Part B often receive prescription drug benefits through an integrated Medicare Part D Employer Group Waiver Plan (EGWP), which may offer more flexibility and better cost control than many Advantage plans.

Supplemental Benefits May Be Limited in Real Use

Extra benefits like dental, vision, hearing aids, transportation, and over-the-counter allowances are commonly used as selling points for Medicare Advantage plans. But as of 2025:

• Only 73% of plans offer over-the-counter benefits (down from 85% in 2024)

• Just 30% of plans include transportation benefits (down from 36% in 2024)

• Many benefits are offered as quarterly or annual caps with limits on usage and provider choice

You may be surprised to find these “extras” are not always accessible or useful. If you’re relying on these benefits, it’s critical to check how they actually work in your specific plan before enrolling.

Plan Coverage Varies Widely by Region

Unlike FEHB or PSHB, which offer consistent coverage across the country, Medicare Advantage plans are highly localized. In 2025, plan availability varies by zip code, and the benefits and provider networks differ significantly even within the same state.

This means your neighbor might have a plan with a robust network and excellent cost-sharing, while your options might be more limited. For Postal retirees living in areas with few Advantage plans, PSHB paired with Original Medicare might be a more consistent option.

Your Provider Might Not Accept the Plan

Before switching to a Medicare Advantage plan, you must confirm that all your current doctors, hospitals, and specialists are in-network. Otherwise, you may face:

• Denied visits or out-of-network penalties

• Higher copayments or full charges

• Disruptions in your care continuity

Many Postal retirees maintain long-term relationships with specific providers. Medicare Advantage plans can disrupt that continuity, especially if network changes occur mid-year.

Emergency Coverage Might Be Less Robust

In theory, Medicare Advantage plans must cover emergency services anywhere in the U.S. In practice, some retirees report confusion, billing disputes, or network-related issues after receiving emergency care out-of-area. While these may eventually be resolved, the stress and financial uncertainty can be substantial.

By contrast, Original Medicare and PSHB plans generally provide seamless emergency care reimbursement without concern for plan network limitations.

Enrollment Is Not Always Reversible

One key risk with Medicare Advantage is that switching back to Original Medicare isn’t always simple. If you disenroll from a Medicare Advantage plan and want to return to Original Medicare with a Medigap policy (if PSHB is no longer available), you may:

• Face medical underwriting for Medigap

• Be denied coverage due to pre-existing conditions

This is a crucial point for Postal retirees who are thinking of leaving PSHB entirely in favor of Medicare Advantage. Rejoining later might not be possible with the same protections or costs.

Medicare Advantage Plans and PSHB in 2025: What to Remember

The PSHB program is new in 2025, and its structure is designed to work with Medicare—especially Original Medicare. If you are Medicare-eligible and choose a PSHB plan that integrates with Medicare Part B, you may benefit from:

• Reduced out-of-pocket costs

• Part B premium reimbursement (in some cases)

• Drug coverage through an enhanced EGWP

But choosing a separate Medicare Advantage plan outside PSHB could cause you to lose these advantages. You need to understand that PSHB does not coordinate with all Medicare Advantage plans unless explicitly stated.

You are automatically enrolled in a PSHB plan if you had FEHB in 2024 and meet eligibility. However, you have the option during the Open Season (held from November to December each year) to select a different plan or explore other Medicare options. Use this opportunity wisely.

Weighing the Risks and Rewards

Medicare Advantage plans are not inherently bad, but they come with tradeoffs that may not be suitable for everyone, especially Postal retirees under the new PSHB system. What may sound like an all-inclusive plan could include:

• Hidden costs

• Reduced provider access

• Complex administrative hurdles

It’s essential to balance the potential perks against the real limitations these plans can bring. In most cases, PSHB plans coordinated with Original Medicare may offer better overall protection, predictability, and access to care.

Talk to Someone Who Understands the Details

As you explore your PSHB and Medicare options for 2025, don’t go it alone. The rules have changed, and the stakes are high. Your decision affects not only your healthcare quality but also your financial security in retirement.

Speak with a licensed agent listed on this website who understands the PSHB program and the nuances of Medicare Advantage. A short conversation can save you from a year of frustration and unexpected bills.