Key Takeaways

1. Medicare Supplement Plans (Medigap) may not always provide significant value if you’re already covered under the Postal Service Health Benefits (PSHB) program, which offers robust coverage.

2. Understanding how Medicare, PSHB, and Supplement Plans work together can help you avoid unnecessary costs and overlapping benefits.

What You Need to Know About PSHB and Medicare

The Postal Service Health Benefits (PSHB) program is a significant part of healthcare coverage for USPS employees and retirees. As you approach retirement or become eligible for Medicare, it’s natural to wonder whether you need additional coverage, such as a Medicare Supplement Plan (Medigap). These plans are designed to cover costs that Original Medicare doesn’t, but how does that stack up against the comprehensive benefits offered by PSHB? Let’s take a closer look.

How PSHB Works Alongside Medicare

When you retire from the USPS, PSHB continues to offer coverage for medical, vision, and prescription needs. For those who are eligible for Medicare, PSHB acts as a secondary payer. Medicare becomes your primary coverage, paying first, while PSHB picks up much of what Medicare doesn’t cover, like coinsurance, copayments, and deductibles. This coordination can be quite advantageous and may eliminate the need for additional coverage.

In 2025, PSHB plans include specific benefits for enrollees who have Medicare Part A (hospital insurance) and Part B (medical insurance). These include reduced out-of-pocket costs, waived deductibles, and lower prescription drug costs. With this integration, PSHB already fills many of the gaps that a Medicare Supplement Plan would typically address.

What Medicare Supplement Plans Offer

Medicare Supplement Plans, or Medigap, are standardized policies sold by private insurers to help cover Medicare’s out-of-pocket costs. These include:

• Medicare Part A coinsurance and hospital costs beyond what Medicare covers.

• Part B coinsurance or copayments.

• Blood transfusions (the first three pints).

• Hospice care coinsurance or copayments.

While these features sound appealing, they may not add much value for PSHB participants. Many of these expenses are already covered under your PSHB plan when Medicare is your primary insurance.

Comparing Costs: PSHB vs. Medicare Supplement Plans

In deciding whether to add a Medicare Supplement Plan, costs play a significant role. PSHB participants already pay premiums for their health coverage, which the federal government subsidizes by about 70%. These premiums include comprehensive benefits that reduce your financial burden significantly.

Adding a Medicare Supplement Plan means paying an additional premium—often on top of your Medicare Part B premium. If PSHB already covers your out-of-pocket expenses, this could result in paying for duplicate coverage without gaining any additional benefits.

Let’s not forget about the timeline of Medicare costs in 2025:

• Medicare Part A deductible: $1,676 per benefit period.

• Medicare Part B premium: $185 monthly.

• Medicare Part B deductible: $257 annually.

With PSHB, many of these costs are reduced or fully covered when Medicare acts as the primary payer. This strong coordination between PSHB and Medicare means you may already have most of your bases covered.

Understanding Overlapping Coverage

One key issue with adding a Medicare Supplement Plan is the risk of overlapping coverage. PSHB already coordinates with Medicare to cover many out-of-pocket costs. Adding Medigap on top could lead to paying for coverage that duplicates what PSHB already offers. For example:

• If Medicare covers 80% of a Part B service, your PSHB plan typically picks up the remaining 20%, leaving you with little to no cost.

• Medicare Supplement Plans are designed to fill the same gaps that PSHB already covers, making them redundant in most cases.

To avoid unnecessary expenses, evaluate whether your current PSHB benefits meet your healthcare needs before considering Medigap.

When Might a Medicare Supplement Plan Make Sense?

Although PSHB provides comprehensive coverage, there are rare cases where a Medicare Supplement Plan might still be worth considering. These include:

1. Frequent Out-of-Network Care: If you often seek medical care outside of your PSHB network, a Medicare Supplement Plan might offer additional support for costs that PSHB may not fully cover.

2. High-Risk Health Conditions: If you have ongoing, expensive medical needs that might exceed the coordination between PSHB and Medicare, Medigap could provide additional peace of mind.

3. Uncovered Services: Medigap may cover certain services that are excluded by both Medicare and PSHB, though these situations are uncommon.

Even in these cases, carefully assess the costs and benefits of adding a Medigap plan, as PSHB’s coverage is often sufficient for most healthcare needs.

The Role of Prescription Drug Costs

PSHB participants with Medicare are automatically enrolled in a Part D Employer Group Waiver Plan (EGWP) for prescription drugs. This specialized Part D plan is included with your PSHB coverage and provides significant savings. In 2025, this includes:

• A $2,000 annual out-of-pocket cap for prescription drug costs.

• Reduced copayments for generic and brand-name medications.

• Streamlined coordination with Medicare Part D benefits.

Since Medigap does not cover prescription drugs, adding a standalone plan for drug coverage would be redundant. PSHB’s integrated prescription drug benefits further diminish the need for additional coverage.

Making an Informed Decision

Before deciding whether to add a Medicare Supplement Plan, it’s essential to:

1. Review Your PSHB Benefits: Understand the extent of your current coverage and how it integrates with Medicare. Pay close attention to out-of-pocket maximums, coinsurance rates, and prescription drug benefits.

2. Compare Costs: Calculate how much you’re paying for PSHB and Medicare premiums versus the added cost of a Medigap plan. Factor in potential savings from PSHB’s integration with Medicare.

3. Assess Your Healthcare Needs: Consider whether your current coverage meets your medical and financial needs. If PSHB and Medicare already cover most of your expenses, a Medigap plan may not be necessary.

4. Avoid Overlapping Coverage: Be cautious about paying for duplicate benefits. PSHB already fills many gaps in Medicare coverage, reducing the value of Medigap.

Key Timelines to Keep in Mind

Here are some important dates to consider when evaluating your coverage:

• PSHB Open Season: November 11 to December 13, 2025. This is the time to review or change your PSHB plan.

• Medicare General Enrollment Period: January 1 to March 31 each year. Coverage starts July 1.

• Special Enrollment Periods: Triggered by qualifying life events, allowing changes to your Medicare coverage outside of standard enrollment periods.

By aligning your decisions with these timelines, you can ensure that you’re making the most of your healthcare coverage without unnecessary expenses.

Why PSHB Alone May Be Enough

For most PSHB participants, the comprehensive benefits provided in coordination with Medicare are sufficient to meet their healthcare needs. PSHB’s cost-sharing features, prescription drug coverage, and integration with Medicare minimize out-of-pocket expenses, making additional coverage through Medigap unnecessary in many cases.

The key to maximizing your benefits is understanding how PSHB and Medicare work together. By reviewing your current plan and evaluating your healthcare needs, you can make an informed decision without paying for redundant coverage.