Key Takeaways

• Medigap might duplicate benefits already offered under the Postal Service Health Benefits (PSHB) program, especially when Medicare Part B is also active.

• Adding a Medigap plan could lead to unnecessary costs without providing meaningful additional coverage, depending on your PSHB plan’s coordination with Medicare.

Why Some Consider Medigap in Retirement

As you approach retirement or begin receiving Medicare, you may hear about Medigap (also called Medicare Supplement Insurance). It’s designed to help cover the out-of-pocket costs that Medicare Parts A and B do not—such as deductibles, coinsurance, and copayments.

For most Americans, Medigap becomes attractive because:

• Original Medicare doesn’t include an out-of-pocket cap.

• Unexpected hospital stays or specialist visits can result in significant costs.

• Medigap fills those gaps and offers predictable cost-sharing.

But for you—as a Postal Service retiree or annuitant enrolled in PSHB and Medicare—there’s a critical distinction: PSHB already works in tandem with Medicare and reduces or even eliminates many of those same out-of-pocket expenses.

What PSHB Covers When Combined With Medicare

In 2025, the PSHB program offers coordinated benefits with Medicare Part B that closely mirror or surpass Medigap protection in many ways. Once you enroll in both Medicare Part A and B, your PSHB plan typically becomes the secondary payer, meaning it picks up where Medicare leaves off.

Here’s what PSHB often includes when you have Medicare:

• Reduced or Waived Deductibles: Many PSHB plans eliminate their medical deductible when Medicare Part B is active.

• Lower Copayments: You may see significantly lower costs for physician visits, hospital stays, and outpatient care.

• Prescription Drug Coverage: PSHB includes integrated Medicare Part D coverage under a special plan, which Medigap does not.

• Annual Out-of-Pocket Maximum: Unlike Original Medicare alone, PSHB plans impose a yearly out-of-pocket limit, providing financial protection.

These features make PSHB with Medicare functionally similar to having a Medigap policy—often with better coordination and at a potentially lower cost.

What Medigap Adds—And Where It Overlaps

Medigap policies are standardized by the federal government, but each plan (Plan G, Plan N, etc.) offers a different level of cost-sharing support. They typically cover:

• Medicare Part A coinsurance and hospital costs

• Medicare Part B coinsurance or copayment

• First 3 pints of blood

• Part A hospice care coinsurance or copayment

Some plans also help with:

• Skilled nursing facility care

• Part A and B deductibles (depending on plan)

• Foreign travel emergency costs

However, if you already have Medicare Part B and PSHB, many of these gaps are already closed. For instance:

• Coinsurance is often paid in full by your PSHB plan

• Your PSHB plan likely provides blood and hospice coverage without additional plans

• Skilled nursing care is usually fully covered with both Medicare and PSHB working together

Adding Medigap to this combination results in overlapping coverage that adds cost but little value.

Financial Impact of Keeping Both

Medigap plans come with a monthly premium that you pay in addition to:

• Your Medicare Part B premium

• Your PSHB premium

Even if general Medigap premiums are not astronomical, paying for what your PSHB plan already covers is typically unnecessary. You’d be spending hundreds—if not thousands—of dollars each year for redundant protection.

Also, Medigap policies don’t cover:

• Prescription drugs (you’d need a separate Part D plan if you didn’t have PSHB)

• Vision, dental, or hearing services

• Long-term care or custodial services

Your PSHB plan may include some or all of these additional benefits. Therefore, switching to a Medigap plan could leave you less protected overall if you were to drop PSHB in favor of it.

Medicare Coordination Requirements for PSHB

As of 2025, the PSHB program requires that certain annuitants and eligible family members enroll in Medicare Part B to keep their health coverage.

Specifically, you must enroll in Medicare Part B unless you:

• Retired on or before January 1, 2025 and are not already enrolled in Part B

• Were 64 years old or older as of January 1, 2025

• Reside overseas

• Are enrolled in Indian Health Service or the VA

This requirement enhances your coordination of benefits and eliminates most cost-sharing responsibilities that would otherwise justify buying Medigap. When Medicare is your primary and PSHB is your secondary, there’s usually no need for third-layer support like a Medigap plan.

What About the Medicare Part B Premium?

The 2025 Medicare Part B standard monthly premium is $185. PSHB plans recognize that and often offer cost savings to help offset it. Some PSHB plans:

• Reimburse a portion of your Part B premium

• Waive your PSHB deductible

• Reduce your coinsurance or copayments to minimal amounts

Medigap plans don’t offer any such reimbursements or coordination benefits. They simply supplement Medicare—but they don’t collaborate with it in the way PSHB does. That’s a major difference.

The Burden of Managing Multiple Plans

Maintaining three layers of coverage—Medicare, PSHB, and Medigap—adds administrative hassle. You may need to:

• Juggle billing statements from different entities

• Understand coordination of benefits from three perspectives

• Monitor which plan paid what

• Submit claims to Medigap if PSHB doesn’t pay automatically

This effort is rarely justified, especially when Medicare and PSHB already settle nearly all claims efficiently between themselves.

Timeline Considerations and Enrollment Periods

If you are newly eligible for Medicare or switching PSHB plans, timing is crucial.

• Initial Enrollment Period (IEP) for Medicare starts 3 months before the month you turn 65 and ends 3 months after.

• General Enrollment Period (GEP) runs from January 1 to March 31 every year for those who missed IEP.

• Open Season for PSHB occurs from November to December each year, during which you can select or change your plan.

Medigap enrollment also has a protected window:

• Your Medigap Open Enrollment Period lasts for 6 months starting when you are both 65 or older and enrolled in Medicare Part B.

Outside of that period, you may face medical underwriting and possibly be denied coverage. This adds another layer of concern for those thinking about Medigap later.

When Medigap Might Still Be Considered

There are limited scenarios where Medigap might still appeal to a PSHB retiree:

• You plan to drop PSHB entirely, though that’s generally not advisable

• You move to an area where PSHB plan networks are weak, and you want nationwide flexibility

• You value simplicity and prefer to interact with only Medicare and one supplement

However, even in these rare situations, you’d likely lose access to dental, vision, and integrated prescription drug coverage provided by PSHB. The trade-off is almost never worth it unless you have a very specific reason and a clear financial comparison in hand.

What You Actually Gain by Sticking with PSHB + Medicare

When enrolled in both Medicare and PSHB, you often enjoy:

• Extensive medical coverage with minimal out-of-pocket expenses

• Integrated prescription drug benefits through Medicare Part D EGWP plans

• Access to national provider networks

• Supplemental benefits like dental, vision, and hearing

• Annual cost protection via out-of-pocket maximums

• Support for Medicare Part B premium costs from some PSHB plans

This combination reduces financial risk, simplifies billing, and provides a more complete healthcare experience.

Don’t Overpay for What You Already Have

If you’re currently covered by both Medicare and a PSHB plan, adding a Medigap policy is almost always unnecessary. In fact, it may work against you—costing you more and offering fewer benefits overall.

Unless you’re planning a significant change in your retirement health strategy, like dropping PSHB altogether (which requires serious consideration), Medigap doesn’t bring enough to the table to justify its cost or complexity.

For clarity on your personal situation, speak with a licensed agent listed on this website. They can help you evaluate your current coverage and ensure you’re not paying for benefits you already receive through PSHB and Medicare.