Key Takeaways:

• Medigap plans can help fill gaps in Original Medicare, but they work differently for Postal Service Health Benefits (PSHB) enrollees.

• Understanding how Medigap premiums, PSHB coverage, and Medicare coordination interact is crucial to making informed healthcare decisions.

Understanding Medigap and PSHB: What You Need to Know

The Postal Service Health Benefits (PSHB) program brings new opportunities for postal retirees to manage healthcare costs effectively. If you’re considering Medigap (Medicare Supplement Insurance) as an option, understanding how it works alongside your PSHB plan is key. While Medigap is designed to cover expenses like copays, coinsurance, and deductibles, its role in PSHB coverage is unique. Let’s break down the essentials so you can make the right choice for your healthcare needs.

1. Medigap Plans Aren’t Always Necessary for PSHB Retirees

How PSHB and Medicare Coordinate Benefits

As a PSHB enrollee, your benefits are structured to work seamlessly with Medicare. Once you’re enrolled in Medicare Part A and Part B, your PSHB plan acts as secondary insurance, covering costs that Medicare doesn’t. Because PSHB plans already help with cost-sharing, you may not need Medigap coverage at all.

Medigap policies are primarily designed for people with Original Medicare who lack secondary coverage. Since PSHB enrollees already have a built-in Medicare coordination feature, adding a Medigap plan may lead to redundant coverage. Paying for extra insurance that you might not fully use isn’t always the best financial move.

What Medigap Covers That PSHB Might Not

Although PSHB plans coordinate with Medicare, they don’t always cover everything. Medigap can help with:

• Certain out-of-pocket costs not fully covered by your PSHB plan.

• Emergency healthcare services while traveling abroad.

• Additional expenses related to Medicare Part B coinsurance.

If your PSHB plan leaves significant gaps in coverage, Medigap might be worth considering, but be sure to review the specifics of your PSHB plan first.

2. Medigap Premiums Vary Based on Enrollment Timing and Location

When Should You Enroll in Medigap?

Your Medigap enrollment period begins when you turn 65 and enroll in Medicare Part B. This is a six-month window when you have guaranteed issue rights, meaning insurers can’t deny coverage or charge higher rates based on health conditions. If you miss this window, you may face underwriting and higher premiums, depending on your health.

For PSHB retirees, this means carefully assessing whether Medigap is truly necessary during your initial enrollment period. If your PSHB plan provides adequate coverage, you may not need to enroll in Medigap right away.

How Your Location Affects Medigap Costs

Unlike PSHB premiums, which are determined by the government’s contribution structure, Medigap premiums vary based on your state and insurer pricing methods. Some states offer community-rated pricing, where everyone pays the same premium, while others use age-based pricing, meaning your premiums increase as you get older.

This is important to consider if you relocate after retirement. Moving to a different state could impact your Medigap costs or availability, so always check how rates are structured where you live.

3. Medigap Doesn’t Cover Prescription Drugs, But PSHB Might

Why Medigap Isn’t a Substitute for Drug Coverage

Medigap plans no longer cover prescription drugs, so you’d need separate coverage through Medicare Part D or a PSHB plan with drug benefits. This is where PSHB plans can be advantageous—many offer integrated prescription drug coverage, eliminating the need for a standalone Part D plan.

If your PSHB plan includes drug coverage that meets your needs, there’s no need to pay extra for a separate Medicare Part D plan. However, if your plan has limited prescription benefits, you might want to compare the cost of a Part D plan against the savings it could provide.

The Impact of Medicare’s New Out-of-Pocket Cap

In 2025, Medicare Part D introduces a $2,000 out-of-pocket cap on prescription drug costs. This change significantly reduces financial risk for those with high medication expenses. If you rely on expensive prescriptions, this cap makes Medicare Part D a more attractive option than ever before.

PSHB enrollees should review their plan’s prescription drug coverage to determine whether it’s sufficient or if additional coverage is needed. If your PSHB plan doesn’t fully cover your medications, pairing it with a Part D plan may be a better solution than relying on Medigap.

How to Decide If Medigap Is Right for You

If you’re enrolled in PSHB and Medicare, Medigap may not be necessary. However, here are key factors to consider:

• Current PSHB Plan Coverage: Does your plan cover most out-of-pocket Medicare expenses?

• Travel Needs: Do you need emergency medical coverage outside the U.S.?

• Budget: Can you afford an additional premium for supplemental coverage?

• Medical Expenses: Do you anticipate high out-of-pocket costs for healthcare services?

Before enrolling in Medigap, weigh your options carefully. It’s important to avoid paying for unnecessary coverage, but also to ensure you have adequate protection against unexpected medical expenses.

Get Expert Guidance for Your PSHB and Medicare Choices

Making the right decision about Medigap and PSHB coverage isn’t always easy. With different plans, premiums, and benefits to evaluate, having expert guidance can help ensure you choose the best option for your needs. To get personalized advice, reach out to a licensed agent listed on this website who can walk you through your choices and answer any questions you may have.