Key Takeaways

• Medicare Supplement (Medigap) coverage is generally unnecessary for Postal Service Health Benefits (PSHB) enrollees who already have comprehensive health coverage, especially when paired with Medicare Parts A and B.

• Purchasing a Medigap plan alongside PSHB may lead to redundant benefits and additional out-of-pocket costs without improving your actual coverage.

Understanding the Purpose of Medicare Supplement Insurance

Medicare Supplement Insurance, also known as Medigap, is designed to fill the “gaps” in Original Medicare. These gaps include deductibles, copayments, and coinsurance. Medigap policies are standardized and offered by private companies, and they are only available to people enrolled in Medicare Part A and Part B.

The primary audience for Medigap plans are individuals who do not have other forms of secondary coverage, such as employer-sponsored plans or retiree health benefits. For example, someone relying solely on Medicare may purchase a Medigap policy to reduce out-of-pocket medical expenses.

However, if you are enrolled in the Postal Service Health Benefits (PSHB) Program, you are already covered under a robust federal health insurance system that is intended to work with Medicare. In most cases, PSHB makes Medigap unnecessary.

How PSHB Coordinates with Medicare Parts A and B

If you are retired and enrolled in Medicare Part A and Part B, your PSHB plan becomes your secondary payer. Medicare pays first, and your PSHB plan typically covers much of what Medicare does not, including:

• Deductibles

• Coinsurance

• Additional services like vision, hearing, and preventive care not always covered by Medicare

PSHB plans also often include out-of-pocket maximums, providing financial protection even if you need extensive care. Medigap plans, while they help with cost-sharing, do not include this kind of cap on spending.

Why Some PSHB Enrollees Still Buy Medigap

Despite the overlap in coverage, some Postal Service retirees still enroll in Medigap plans. This may happen due to:

• Lack of awareness about how PSHB coordinates with Medicare

• Advice from agents or third parties who are unfamiliar with federal benefits

• Concern over specific benefits or cost-sharing details in a PSHB plan

Unfortunately, adding a Medigap policy when you already have PSHB can often result in higher monthly premiums without added value. Since Medigap cannot be used in combination with Medicare Advantage plans and does not coordinate well with PSHB, the result is usually a duplication of benefits.

Financial Implications of Carrying Medigap and PSHB

Carrying both a Medigap policy and a PSHB plan can significantly increase your monthly premium costs. While you may assume you are adding protection, in most cases, the Medigap plan simply pays for what your PSHB plan would have covered anyway.

Here are a few examples of duplicative costs:

• Medigap plans may cover the Part A hospital deductible, but PSHB plans often do as well.

• Medigap may pay for Part B coinsurance, but your PSHB plan usually covers that portion after Medicare pays.

• Some PSHB plans waive deductibles entirely when Medicare is your primary payer.

Given that the average monthly premium for PSHB is already a significant expense, adding another premium for a Medigap plan often results in avoidable spending.

What Happens When You Use Medigap with PSHB

Technically, Medicare Supplement plans are not structured to coordinate with employer-sponsored plans like PSHB. Medigap assumes that you have no other secondary coverage beyond Original Medicare. If you file a claim, the Medigap plan may process it based on its terms, without taking your PSHB plan into account.

This can lead to:

• Confusing claims processing

• Delayed reimbursements

• Denied duplicate claims

Most importantly, Medigap plans do not recognize PSHB as a secondary or tertiary payer, which means they may not integrate properly with your claims. Your PSHB plan, on the other hand, is built to work alongside Medicare, giving you smoother coordination of benefits.

When Might Medigap Seem Appealing to a PSHB Retiree?

In rare cases, a Postal Service retiree may believe that a specific Medigap plan offers a better deal on coverage than their current PSHB plan. This could be due to:

• A PSHB plan with higher out-of-pocket costs

• Limited access to providers under PSHB plan networks

• Specific preferences in how care is delivered or covered

But even in these cases, the right solution is typically to compare PSHB plan options during Open Season—not to layer on Medigap. Open Season runs annually from November to December, allowing you to switch to a different PSHB plan that may better suit your needs.

If you feel your current PSHB plan is not ideal, a licensed agent listed on this website can help you explore other available options during Open Season.

Regulatory Limits and Enrollment Rules

If you’re enrolled in Medicare Advantage (Part C), you cannot purchase a Medigap plan at all. But since PSHB plans are not considered Medicare Advantage plans, some retirees mistakenly think Medigap can be used to supplement their benefits.

Be aware of the following regulations:

• Medigap cannot be used to supplement Medicare Advantage plans

• Medigap plans do not offer prescription drug coverage

• Medigap must be enrolled in within six months of enrolling in Medicare Part B to receive guaranteed issue rights

These timelines matter. If you enrolled in Medicare Part B more than six months ago, you may be subject to medical underwriting for Medigap, increasing the likelihood of higher premiums or denial.

In contrast, PSHB plans do not require medical underwriting, and your enrollment is tied to your federal retirement eligibility.

PSHB Already Includes Key Supplemental Benefits

Unlike Medigap, which focuses only on cost-sharing under Medicare, PSHB plans often include additional supplemental benefits that make Medigap unnecessary, including:

• Vision and dental coverage

• Hearing aid benefits

• Wellness and preventive care programs

• International emergency care

These benefits are not part of standard Medigap policies and must be purchased separately. With PSHB, these features are integrated and can be retained for life if you meet eligibility and continue premium payments.

Don’t Confuse Part D Drug Coverage with Medigap

Another source of confusion is drug coverage. Medigap plans do not include prescription drug benefits. For PSHB enrollees, drug coverage is handled through an integrated Medicare Part D Employer Group Waiver Plan (EGWP).

If you opt out of the EGWP, you may lose drug coverage under PSHB. Choosing a standalone Part D plan can interfere with your eligibility or coordination, depending on the timing.

This is another reason why adding a Medigap plan—especially one without prescription coverage—can disrupt the well-structured balance of Medicare and PSHB.

Considerations Before Making a Change

Before deciding to purchase or retain a Medigap plan while enrolled in PSHB, ask yourself:

• Does my PSHB plan already cover the costs that Medigap would?

• Am I paying extra for overlapping benefits?

• Is my claims process being delayed or complicated?

• Can I adjust my PSHB plan during Open Season to better meet my needs?

You may find that switching to a different PSHB plan or coordinating better with Medicare Parts A and B offers more value than paying for Medigap.

If you’re unsure, speak with a licensed agent listed on this website to walk through your options.

What You Gain by Sticking with PSHB and Medicare Alone

Sticking with your PSHB plan in combination with Medicare Parts A and B can often give you all the coverage you need without unnecessary costs. Here’s what you maintain:

• Coordinated benefits

• Lower or no deductibles when Medicare is primary

• Drug coverage via PSHB EGWP

• Extra benefits not found in Medigap

• Lifetime eligibility (as long as premiums are paid and you meet retirement criteria)

PSHB is tailored for retired postal employees. It’s designed to work efficiently with Medicare and protect you from large out-of-pocket expenses. Medigap, while useful in other contexts, is not intended for this audience.

Your Next Step Should Be an Informed One

It’s understandable to want the best possible protection for your health and finances. But more coverage does not always mean better coverage, especially if you’re duplicating benefits.

Before enrolling in a Medicare Supplement plan while already enrolled in PSHB, take the time to compare your current coverage with what Medigap offers. In most cases, you’ll find that PSHB, especially when paired with Medicare Parts A and B, already does the job—often better.

If you’re evaluating your options or considering changes during the upcoming Open Season, get in touch with a licensed agent listed on this website to review what makes the most sense for your unique situation.