Key Takeaways

• Adding a Medicare Supplement (Medigap) plan to your Postal Service Health Benefits (PSHB) coverage may result in unnecessary overlap, especially if you are already enrolled in Medicare Part B.

• Most PSHB plans coordinate benefits with Medicare, and adding a separate supplement plan could lead to higher premiums without providing additional value.

Understanding the Role of PSHB and Medicare

The Postal Service Health Benefits (PSHB) program, fully in effect as of January 1, 2025, replaces the Federal Employees Health Benefits (FEHB) program for USPS employees and retirees. PSHB plans are specifically designed to integrate with Medicare for those aged 65 or older. This integration often makes additional supplemental insurance unnecessary, but many enrollees still consider adding a Medicare Supplement (Medigap) plan.

Let’s walk through how this redundancy happens—and how you can avoid paying more for coverage you may not need.

What Medicare Supplements Are Designed to Do

Medicare Supplement Insurance (often called Medigap) is intended to fill the “gaps” in Original Medicare (Parts A and B). These gaps include:

• Deductibles and coinsurance under Part A and Part B

• Limited hospital days or extended skilled nursing care

• Emergency care abroad (depending on the plan)

However, Medigap plans are not designed to coordinate with group health plans like PSHB. Their primary role is to pair with Original Medicare alone.

PSHB Plans Already Coordinate With Medicare

If you’re Medicare-eligible and enrolled in Medicare Part B, most PSHB plans will automatically become your secondary payer after Medicare. This coordination reduces or eliminates many of the out-of-pocket costs that Medigap plans are meant to cover.

Here’s what your PSHB plan may offer in 2025 when paired with Medicare:

• Lower copayments and coinsurance

• Waived or reduced deductibles

• Enhanced prescription drug coverage through an integrated Part D Employer Group Waiver Plan (EGWP)

So when PSHB acts as secondary coverage, it fills many of the same gaps as a Medigap plan—without the extra premium.

Overlapping Coverage Can Lead to Redundant Costs

Adding a Medigap policy to a PSHB plan often means you’re paying two premiums for benefits that don’t coordinate. This overlap isn’t just inefficient—it’s also costly.

In most cases, Medigap policies do not coordinate benefits with other group health plans, including PSHB. That means your supplemental plan may:

• Deny claims because another insurer (your PSHB plan) is already paying secondary

• Refuse to reimburse you for costs that are already covered

• Charge a premium without delivering additional benefits

The result? You’re left footing the bill for a product that doesn’t serve its intended purpose.

The 2025 PSHB Landscape: Stronger Integration Than Before

The new PSHB program is structured to provide better integration with Medicare than the former FEHB system. Here’s what sets it apart in 2025:

• Medicare Part B Requirement: Medicare-eligible annuitants and family members must enroll in Part B to maintain PSHB coverage (with certain exceptions).

• Integrated Drug Benefits: Prescription drugs are covered through EGWP plans under PSHB, aligning with Medicare Part D rules.

• Simplified Coordination: The PSHB plan becomes secondary to Medicare automatically. You don’t need to manage claims between plans.

Because of this alignment, the gaps that used to require Medigap coverage are now handled internally between Medicare and PSHB.

Why You Might Still Be Considering a Supplement

Even with full Medicare and PSHB coverage, you may have been told that a Medicare Supplement plan is necessary. Common reasons include:

• Concerns about high out-of-pocket costs

• Advice from agents unfamiliar with PSHB

• General misunderstanding about how coordination works

But in most cases, PSHB fills in those coverage gaps automatically once you’re enrolled in both Medicare Parts A and B. There is no benefit in paying for a third layer of coverage.

Special Cases Where It Could Be Different

There are a few scenarios where reviewing your situation more carefully makes sense:

• You’re living abroad: Some PSHB plans may have limited international coverage, and certain Medigap plans include emergency care overseas.

• You’ve opted out of Medicare Part B: If you’re not enrolled in Part B, PSHB becomes your primary coverage—and gaps may exist.

• You’re in a high-deductible PSHB plan: If your plan has high cost-sharing even after Medicare pays, then additional coverage might seem appealing. But even here, a Medigap plan may not coordinate properly.

Still, these are exceptions—not the rule. Most retirees with Medicare Part B and PSHB are already well covered.

What You Should Review Before Adding a Supplement

Before deciding to add a Medigap policy alongside your PSHB plan, evaluate the following:

• Check your current PSHB plan brochure: Look at the section about Medicare coordination. Most plans clearly outline how they cover costs when you have both Medicare and PSHB.

• Review your actual healthcare spending: Are you already paying very little out-of-pocket? A supplement may not be worth the premium.

• Speak with a licensed agent listed on this website: They can help you analyze whether you truly have gaps that need filling.

What Happens If You Already Have a Supplement?

If you already signed up for a Medigap plan and have since transitioned to PSHB with Medicare Part B, you might be duplicating coverage unnecessarily. In this situation, consider:

• Reevaluating during your Medigap open enrollment or guaranteed issue period

• Dropping the Medigap plan after confirming your PSHB and Medicare coverage are complete

• Avoiding new enrollments unless there’s a coverage shortfall

Keep in mind that if you disenroll from Medigap, you may not be able to reenroll later without medical underwriting depending on state laws and the timing.

Coordinated Coverage Offers Strong Protection Already

In 2025, the typical PSHB + Medicare pairing is already a highly efficient and effective combination. You get:

• Primary coverage from Medicare

• Secondary protection from PSHB

• Low or no additional out-of-pocket costs for many services

• Prescription drug coverage under the Part D EGWP structure

There is little room left for a supplemental plan to improve this structure—especially at the added cost.

Make Sure Your Money Is Working for You

Adding a Medicare Supplement plan to PSHB might sound like playing it safe, but it often results in wasted money and duplicated coverage. If you’re already enrolled in Medicare Parts A and B, your PSHB plan likely closes the gaps without needing an extra policy.

If you’re unsure about your current coverage or are considering adding a supplement, speak with a licensed agent listed on this website. They can review your situation and help you make the right decision.