Key Takeaways

• Medigap plans are not required for most Postal retirees enrolled in PSHB with Medicare Part B. Your PSHB plan already fills in many of the same coverage gaps.

• In 2025, PSHB plans often offer lower out-of-pocket costs and better prescription drug integration than traditional Medigap and Part D pairings.

Why People Consider Medigap in the First Place

Medigap, also known as Medicare Supplement Insurance, is designed to fill the gaps in Original Medicare—covering things like deductibles, coinsurance, and copayments. This is appealing if you’re enrolled in Medicare Part A and Part B but want protection from high out-of-pocket costs.

But what many Postal retirees don’t realize is that PSHB, especially when paired with Medicare Part B, already fills most of those same gaps—often more efficiently and at a better value.

How PSHB Functions With Medicare in 2025

Starting in 2025, the Postal Service Health Benefits (PSHB) program replaces FEHB for all Postal retirees. If you’re eligible for Medicare, you’re expected to enroll in Part B unless you meet certain exemption criteria. Once you do, PSHB becomes secondary coverage.

Here’s what that means:

• Medicare pays first for covered services.

• PSHB pays second, often covering the deductibles, coinsurance, and copays that Medicare doesn’t.

• Out-of-pocket costs are capped by the PSHB plan.

• Prescription drug coverage is provided through an integrated Medicare Part D EGWP.

This combination makes Medigap redundant for most Postal retirees.

Medigap Coverage vs. PSHB Secondary Coverage

Medigap is meant to do what PSHB already does once you’re enrolled in both Medicare Part A and B:

• Pay your Medicare Part A deductible (PSHB does this)

• Cover the 20% that Medicare doesn’t for Part B services (PSHB does this)

• Protect against high out-of-pocket costs (PSHB has annual limits)

So while Medigap policies are designed for people relying solely on Original Medicare, you aren’t. With PSHB acting as a wraparound plan, you’re not in the same situation as the typical Medigap shopper.

Key Reasons Medigap May Be Unnecessary With PSHB

1. PSHB Has Annual Out-of-Pocket Maximums

Original Medicare alone doesn’t cap your spending. That’s why Medigap is attractive. But in 2025, PSHB plans include clear in-network out-of-pocket limits:

• Self Only: $7,500

• Self Plus One or Family: $15,000

Many plans fall below these thresholds, depending on the option you select. Once you hit this limit, you stop paying for covered services.

2. Integrated Prescription Drug Coverage

Unlike Medigap, which doesn’t include drug coverage, PSHB plans automatically provide prescription drug benefits through Medicare Part D Employer Group Waiver Plans (EGWPs). These include:

• The $2,000 annual out-of-pocket drug cap introduced in 2025

• Access to the expanded national pharmacy network

• Low insulin costs capped at $35 per month

This is far more comprehensive than a Medigap + standalone Part D plan combo.

3. Part B Coordination Boosts PSHB Value

When you enroll in Medicare Part B, many PSHB plans offer extra savings:

• Waived deductibles

• Lower copayments

• Increased access to specialists and hospitals

These cost reductions make Medigap redundant—especially when you’re already receiving excellent value from your PSHB premiums.

4. Medigap Doesn’t Work With PSHB Drug Coverage

If you try to add Medigap to PSHB and Part B, you might face unnecessary complications:

• Medigap can’t be bundled with the PSHB drug plan.

• You’d be paying for drug coverage you don’t need or risking penalties if you drop the PSHB-integrated Part D.

• There is no added value—only added cost.

5. Medigap Enrollment Rules Are Strict

Outside your initial enrollment window or certain guaranteed issue periods, you may be denied Medigap coverage or charged more based on health status. PSHB plans don’t impose these conditions. You qualify based on eligibility, not underwriting.

But What About Having “Extra Protection”?

It’s understandable to want peace of mind. Medigap promises to eliminate most out-of-pocket costs—but so does PSHB, once Medicare pays its share.

If you’re enrolled in both Medicare A and B, your PSHB plan takes over just like a Medigap plan would. In fact, many PSHB plans:

• Have equal or better coinsurance coverage

• Offer dental, vision, and hearing benefits Medigap doesn’t

• Provide care coordination and wellness perks

In short, the so-called “extra protection” of Medigap is often already built into your PSHB benefits.

What About People Who Still Buy Medigap?

Some Postal retirees still consider Medigap for a few reasons:

• They don’t understand that PSHB becomes secondary to Medicare.

• They moved to PSHB from FEHB and are used to layering plans.

• They believe more coverage always means better coverage.

But in most cases, those extra premiums go unused because PSHB is already picking up the bills after Medicare does its part. So you’re paying twice without gaining additional benefits.

When Medigap Might Still Have a Role

There are rare scenarios where Medigap could theoretically serve a purpose:

• You’re enrolled in Medicare but opt out of PSHB, which is generally inadvisable.

• You’re living abroad, and your PSHB or Medicare coverage is limited.

• You’re transitioning plans during a QLE and need temporary coverage.

Even then, it’s best to consult a licensed agent listed on this website to explore whether a short-term solution is truly necessary—or if your PSHB plan already has you covered.

Summary: Your PSHB Plan Probably Covers You Better

If you’re a Postal retiree with Medicare Part B, your PSHB plan becomes the safety net that Medigap was originally designed to be. You’re covered on all sides:

• Hospital stays (Part A + PSHB)

• Doctor visits (Part B + PSHB)

• Prescription drugs (Part D EGWP through PSHB)

• Out-of-pocket limits (included in PSHB)

And you get more—like dental and vision—without juggling multiple policies.

Before you pay for something you likely won’t use, ask yourself whether Medigap is truly adding value. In 2025, for most Postal retirees, the answer is no.

Why This Matters Now More Than Ever

The 2025 PSHB transition brings new clarity—and opportunities. But it also introduces confusion for those used to the FEHB system or private Medigap shopping.

Take a step back and review your full coverage picture:

• Are you enrolled in Medicare A and B?

• Is your PSHB plan working as your secondary insurer?

• Are you already benefiting from reduced cost-sharing?

If so, Medigap is likely unnecessary—and could become a source of extra premiums with no practical return.

To make sure your choices are tailored to your actual needs—not marketing myths—speak with a licensed agent listed on this website. They can walk you through how PSHB coordinates with Medicare, confirm what’s covered, and help you avoid doubling up on costs you don’t need to carry.