Key Takeaways

• While Medigap can help cover the costs that Original Medicare doesn’t, it’s not available alongside PSHB plans, which are already designed to fill those gaps.

• If you’re eligible for Medicare and enrolled in a PSHB plan, you must evaluate whether a Medigap policy is even necessary—or allowed—in your situation.

Understanding the Appeal of Medigap Plans

Medigap, also known as Medicare Supplement Insurance, exists to help cover costs that Original Medicare leaves behind. These costs include:

• Coinsurance

• Copayments

• Deductibles

For many Medicare beneficiaries, especially those enrolled only in Original Medicare (Parts A and B), Medigap can provide predictable costs and peace of mind. The plans are standardized and labeled with letters (A through N), each offering a different level of coverage.

But if you’re a Postal Service annuitant or retiree covered by a Postal Service Health Benefits (PSHB) plan, your coverage landscape looks very different.

Why Medigap and PSHB Usually Don’t Mix

As of 2025, PSHB plans are designed to integrate with Medicare. If you’re enrolled in Medicare Part A and Part B, your PSHB plan acts as secondary coverage. This means it already pays much of what Medigap would cover:

• Remaining coinsurance

• Out-of-pocket costs

• Some deductibles

Medigap policies are not designed to coordinate with employer or retiree health benefits like PSHB. In fact, if you’re enrolled in a PSHB plan and try to apply for a Medigap policy, you may be denied or find that it duplicates benefits you already have.

The Gaps You Think You Have

Many Medicare-eligible Postal retirees wonder if they need Medigap because of lingering worries about cost-sharing. After all, Medicare Parts A and B don’t cover:

• Prescription drugs

• Dental, vision, or hearing services

• Long-term care

While Medigap also doesn’t cover these services, PSHB plans often do. Your PSHB plan is built with these additional services in mind, especially when paired with Medicare.

Here’s what a typical PSHB and Medicare combination may cover in 2025:

• Reduced or waived deductibles

• Lower out-of-pocket maximums

• Comprehensive drug coverage through an integrated Part D plan

• Extra benefits such as dental and vision, depending on the plan

Because of this built-in protection, adding Medigap to the mix becomes redundant—and in most cases, not permitted.

Medigap Enrollment Isn’t Automatic—Timing Matters

For people who are eligible, the best time to enroll in a Medigap policy is during your Medigap Open Enrollment Period. This six-month period starts the month you’re both 65 or older and enrolled in Medicare Part B. During this window, you can buy any Medigap policy sold in your state without medical underwriting.

But again, if you’re already covered by a PSHB plan, there’s little benefit and potentially a disqualification issue. You generally can’t have both, and trying to do so might leave you with higher premiums or overlapping coverage that provides no additional value.

What You Can Control: Understanding PSHB + Medicare Integration

If you want to close gaps in coverage, your focus should shift from Medigap to fully understanding your PSHB plan’s integration with Medicare. When you are enrolled in both, your benefits may include:

• Waived deductibles and copayments when Medicare is the primary payer

• Lower prescription costs through an Employer Group Waiver Plan (EGWP) under Part D

• Access to a broader provider network than Medicare alone

• Vision, hearing, and dental benefits that aren’t covered by Medicare or Medigap

PSHB plans are structured to enhance your Medicare coverage—not replace it, and not require supplementation.

When Medigap Might Be Relevant (But Usually Isn’t)

There are a few rare cases where you might hear about Medigap among Postal retirees. For instance:

• If a Postal retiree drops PSHB coverage completely and enrolls only in Original Medicare, then a Medigap policy might be considered.

• If someone becomes ineligible for PSHB and still wants supplemental coverage.

These scenarios are uncommon, especially after the PSHB transition in 2025, which automatically enrolls eligible annuitants into a corresponding PSHB plan unless they opt out.

For most, the need for Medigap never materializes because your PSHB plan already fills those critical cost gaps.

What About Prescription Drug Costs?

One common motivator behind Medigap inquiries is prescription drug coverage. Medigap policies do not include drug coverage. Instead, people on Original Medicare typically add a standalone Part D plan. However, this doesn’t apply to PSHB annuitants.

In 2025, your PSHB plan automatically includes Part D drug coverage through an Employer Group Waiver Plan. This coverage:

• Is typically more generous than retail Part D plans

• Has an annual out-of-pocket cap of $2,000

• Covers a wide range of prescriptions, including insulin with a $35 cap per month

There’s no need to add standalone drug coverage—or Medigap—to handle your prescriptions. Your PSHB benefits are already aligned to provide that protection.

Questions You Should Ask Instead of “Do I Need Medigap?”

Rather than evaluating Medigap plans, consider asking the following:

• Does my PSHB plan integrate properly with Medicare Parts A and B?

• Have I enrolled in Medicare Part B to avoid coverage gaps under PSHB?

• Am I taking full advantage of my plan’s drug, dental, vision, and hearing benefits?

• Have I reviewed my plan’s out-of-pocket maximums and copayments?

These questions will yield more actionable results than trying to pair Medigap with a PSHB plan, which usually isn’t possible or practical.

Medigap Doesn’t Work with Medicare Advantage Plans Either

It’s worth noting that Medigap is also not compatible with Medicare Advantage plans. If you ever transition from PSHB to a Medicare Advantage plan in the future (a decision that would require dropping PSHB entirely), Medigap still wouldn’t be an option.

This reinforces the idea that Medigap works best only with Original Medicare—and only when you don’t have access to superior, employer-sponsored plans like PSHB.

If You’re New to PSHB in 2025

The 2025 transition to the Postal Service Health Benefits program has changed how coverage works for Postal retirees. Key facts to keep in mind:

• If you were already in a FEHB plan, you’ve been automatically moved to a corresponding PSHB plan

• If you’re Medicare-eligible, you must enroll in Part B to retain full PSHB benefits

• Your PSHB plan likely includes integrated prescription coverage under Part D

• You cannot enroll in both PSHB and Medigap

These changes mean your most important choices revolve around Medicare Part B enrollment and plan selection within PSHB—not supplemental Medigap policies.

Focus on What You Can Choose, Not What You Can’t

Instead of pursuing a Medigap plan you likely don’t need or can’t use, put your attention on optimizing your existing benefits:

• Review your Annual Notice of Change (ANOC) for PSHB updates

• Evaluate whether your PSHB plan offers premium reimbursements for Medicare Part B

• Understand how your PSHB plan coordinates with your local and national providers

• Use your Medicare and PSHB portals to track claims and plan benefits

Making informed decisions within your existing coverage structure will offer far more benefit than chasing outside plans that don’t align with PSHB.

Make Your Health Coverage Work Smarter in 2025

PSHB and Medicare work together to give you layered protection, manageable out-of-pocket costs, and access to services that Medicare alone would never cover. Trying to bring Medigap into that mix is like adding a spare tire to a vehicle that already has four new ones. It’s unnecessary, and in most cases, it’s not allowed.

If you’re unsure about the coverage you have—or the options available—get in touch with a licensed agent listed on this website for professional advice tailored to your situation.