Key Takeaways

• Your 2025 PSHB plan may already include benefits similar to what Medigap offers, making additional Medigap coverage unnecessary or even counterproductive.

• Understanding your PSHB benefits fully before considering a Medigap plan can help you avoid redundant costs and possible coverage conflicts.

PSHB Plans Already Provide Comprehensive Coverage

As of 2025, the Postal Service Health Benefits (PSHB) Program continues to offer extensive health coverage for eligible postal retirees. If you’re enrolled in Medicare and PSHB, your combined benefits already take care of most out-of-pocket medical costs. PSHB plans are specifically designed to coordinate with Medicare Part A and Part B, which minimizes your financial exposure and increases your peace of mind.

Your PSHB plan typically includes:

• Hospital care and inpatient services

• Medical services like doctor visits and outpatient care

• Prescription drug coverage through a Medicare Part D EGWP

• Preventive care and wellness screenings

• Emergency services and urgent care

• Out-of-pocket maximums to limit financial risk

These built-in features often overlap with the coverage Medigap is marketed to provide, particularly when it comes to deductibles, coinsurance, and copayments.

Understanding the Medigap Appeal

Medigap, or Medicare Supplement Insurance, is designed to fill the “gaps” in Original Medicare. It typically covers things like:

• Medicare Part A and B deductibles

• Coinsurance and copayments

• Hospital costs beyond Medicare limits

• Some emergency care during foreign travel

On the surface, this may sound like extra protection worth buying. But if you’re a PSHB enrollee, your existing plan may already cover many—if not all—of these areas. And since Medigap policies come with their own monthly premiums and limited provider flexibility, you could end up paying more without gaining meaningful benefits.

PSHB and Medicare Work Together Efficiently

In 2025, PSHB plans are structured to complement Medicare seamlessly. When you enroll in Medicare Part A and Part B, your PSHB plan generally becomes your secondary payer. This means:

• Medicare pays its share of covered services first.

• Your PSHB plan picks up most of the remaining costs, often eliminating the need for separate supplemental coverage.

The result is a strong two-layer system that reduces or eliminates many typical out-of-pocket expenses—precisely the kind of expenses Medigap is designed to handle.

How Drug Coverage Is Already Handled

One key benefit often overlooked is prescription drug coverage. PSHB automatically includes Medicare Part D drug coverage through an Employer Group Waiver Plan (EGWP). This means:

• You are enrolled automatically with no need to shop separately for drug plans.

• Your costs are capped with a $2,000 annual out-of-pocket maximum for prescriptions, introduced in 2025.

• Many plans offer enhanced pharmacy networks and low copayments.

Since Medigap doesn’t include drug coverage, you’d have to buy a separate Part D plan if you opted out of PSHB, which further complicates things. With PSHB, you already have the prescription support you need.

Medigap Isn’t Designed for Federal or Postal Plans

Medigap plans are primarily tailored for people with only Original Medicare and no other coverage. They are not designed to coordinate with employer-sponsored retiree coverage like PSHB. In fact, enrolling in both can result in confusion about who pays what—and in some cases, you may find yourself paying premiums for benefits you never use.

In addition, Medigap does not:

• Offer coverage for routine dental, vision, or hearing services

• Include long-term care benefits

• Provide wellness incentives or care coordination

Yet many PSHB plans already include access to these kinds of extra services. If you buy Medigap thinking it adds value, you could be duplicating services at your own expense.

Cost Overlap Is a Real Concern

PSHB enrollees pay monthly premiums based on the coverage option selected. For 2025, Self Only, Self Plus One, and Self & Family plans each have a defined premium contribution. If you add a Medigap plan, you’re stacking an entirely new premium on top of what you already pay.

That’s not the only financial concern. Medigap plans don’t include:

• An out-of-pocket maximum (something PSHB does)

• Dental, vision, or hearing coverage (which PSHB may offer)

• Prescription coverage (PSHB includes this automatically)

So while the cost of Medigap might seem justified at first glance, the combined financial and coverage value of PSHB and Medicare together typically surpass what Medigap offers on its own.

Medigap Enrollment Rules Can Be Limiting

Another reason to pause before enrolling in Medigap is that timing matters. While there’s a six-month Medigap Open Enrollment Period when you first become eligible for Medicare Part B, applying later can mean:

• Underwriting that could deny you coverage

• Higher monthly premiums due to age or health conditions

If you already have PSHB and decide years later that Medigap might be useful, you might face barriers to entry. And if you enroll in a Medigap plan now and later realize it was unnecessary, you may not be able to re-enroll in PSHB under the same terms if you drop it.

Coordinated Benefits Already Maximize Your Protection

By maintaining enrollment in both PSHB and Medicare Part B, you’re already creating a comprehensive safety net. This setup works because:

• Medicare pays first, reducing your out-of-pocket exposure

• PSHB pays second, often covering remaining costs

• Many PSHB plans include wellness programs and case management

• Drug coverage is automatically integrated with no separate enrollment

There’s little to no gap left for Medigap to fill.

Coordination Conflicts Can Cause Claims Issues

If you’re enrolled in Medigap and PSHB simultaneously, your providers may not know how to file your claims. Medigap insurers are used to working as the secondary payer to Medicare—not the tertiary payer after Medicare and PSHB.

This can result in:

• Claim denials

• Delays in reimbursement

• Confusion over which plan pays first

Because Medigap isn’t intended to follow PSHB as a third payer, this can create administrative hurdles that don’t exist with just Medicare and PSHB working together.

You May Lose Key PSHB Perks If You Rely on Medigap

Many PSHB plans offer incentives for maintaining both Medicare and PSHB coverage. These perks can include:

• Reimbursement of a portion of your Medicare Part B premium

• Waived deductibles and lower copayments

• Enhanced customer service and member programs

If you choose to drop PSHB in favor of a Medigap policy, you risk losing these valuable extras. Once you opt out of PSHB, re-enrollment may be restricted to qualifying life events or limited Open Season periods.

How to Review Your Coverage Before Considering Medigap

Before you make any changes, take time to:

• Review your PSHB plan brochure carefully

• Look at what your current coverage includes

• Consider how your Medicare Parts A and B are coordinating

• Evaluate your current and projected healthcare needs

• Calculate the total cost of adding Medigap—including premiums and potential loss of PSHB benefits

You can also speak with a licensed agent listed on this website to help you walk through the pros and cons of keeping your current setup versus adding or replacing with Medigap.

Your PSHB Coverage Likely Already Does the Job

You’re not required to buy Medigap just because you’re enrolled in Medicare. And if you already have PSHB, chances are you already have the kind of protection Medigap tries to provide—plus more.

It’s easy to think that more coverage equals better coverage, but with overlapping plans, more can sometimes mean waste. That’s why it’s critical to understand your existing benefits first.

Before making any decisions, get in touch with a licensed agent listed on this website who can help you make sure you’re not paying for coverage you don’t need.