Key Takeaways

• Medicare Supplement (Medigap) coverage can duplicate benefits already provided through your PSHB plan, leading to unnecessary costs and confusion.

• In 2025, coordination between Medicare, PSHB, and any additional coverage must be understood clearly to avoid overlapping policies that don’t offer extra value.

Why Overlap Happens More Often Than You Think

Many postal retirees believe that adding a Medicare Supplement plan to their PSHB coverage will create a more robust safety net. But in reality, these plans often cover the same services. Since PSHB plans are specifically designed to integrate with Medicare Part B, they already fill many of the coverage gaps you might expect Medigap to address.

Medicare Supplement plans are designed to work with Original Medicare (Parts A and B), not with employer-sponsored or group health plans like PSHB. This means when you have both, you’re essentially paying for a second plan that duplicates what PSHB already handles.

Understanding How PSHB Coordinates With Medicare

As of 2025, PSHB plans automatically coordinate with Medicare Part A and Part B. Here’s how that works:

• Medicare pays first for eligible services.

• PSHB pays second, often covering most or all of the remaining cost, including deductibles and coinsurance.

• Some PSHB plans waive deductibles entirely if you’re enrolled in Part B.

This automatic coordination means there’s usually no need for a third payer. Adding Medigap to this mix introduces an unnecessary layer that could even cause claim-processing delays.

What Medicare Supplement Insurance Typically Covers

Medicare Supplement (Medigap) policies typically cover:

• Part A coinsurance and hospital costs

• Part B coinsurance or copayment

• Blood (first 3 pints)

• Part A hospice care coinsurance

• Skilled nursing facility coinsurance

• Part A and B deductibles (varies by plan)

• Foreign travel emergency care

However, your PSHB plan already covers most of these expenses when Medicare is your primary coverage. In some cases, your PSHB plan may even offer better terms than standard Medigap policies, especially when it comes to provider networks and prescription drug benefits.

Prescription Drug Coverage: A Crucial Distinction

In 2025, PSHB plans for Medicare-eligible enrollees include prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This benefit is fully integrated and provides:

• A $2,000 annual out-of-pocket cap on drug costs

• A broad pharmacy network

• A $35 cap on insulin (if applicable)

Medicare Supplement plans do not include drug coverage. If you purchase a Medigap plan, you must separately enroll in a Part D plan—often from a private insurer—and pay an additional premium.

This redundancy means that holding both a PSHB plan and Medigap (plus a separate Part D plan) leads to triple-layered coverage and extra costs with minimal extra benefit.

When Having Both Might Hurt You Financially

Although having multiple layers of coverage might seem safe, it often results in:

• Paying unnecessary premiums: Medigap premiums can be significant and aren’t reduced just because you already have PSHB.

• Denial of claims: Some Medigap providers may deny claims when they realize you already have secondary coverage through PSHB.

• Confusion during medical billing: Your providers might struggle with determining which plan pays first, which can delay care or billing resolution.

And since PSHB coverage is already comprehensive—especially when paired with Medicare—it’s difficult to justify the additional cost of a Medicare Supplement plan.

Why It’s Especially Risky After the PSHB Transition in 2025

As of January 1, 2025, all Medicare-eligible postal retirees must be enrolled in Medicare Part B to maintain their PSHB coverage, unless they meet certain exceptions. The new PSHB program has:

• Built-in coordination with Medicare

• Integrated prescription coverage through Part D

• Out-of-pocket maximums that make Medigap less relevant

This design leaves very little room where Medigap adds any extra value. It’s also worth noting that the Medicare rules discourage having both a group health plan and Medigap.

You May Lose Eligibility or Protections With Medigap

If you enroll in a Medicare Supplement plan and later decide to drop it, you may not be able to get it back under the same terms. Here’s why:

• Medigap open enrollment lasts only 6 months after you first enroll in Part B.

• After this period, you may be subject to medical underwriting.

• Some states allow insurers to deny coverage based on health history outside the open enrollment window.

This means if you pick up a Medigap policy thinking it’ll help—and later realize you don’t need it—you could be left in a worse position if you try to re-enroll years later.

Common Misunderstandings That Lead to Overlapping Coverage

Several misconceptions lead retirees to buy redundant coverage:

• “Medigap is required with Medicare.” — It’s not. PSHB fills most gaps already.

• “More coverage equals more protection.” — Overlapping plans don’t double your benefits.

• “Everyone I know has Medigap.” — That may be true, but they may not have PSHB.

It’s important to assess your own needs and coverage, rather than follow what friends or neighbors are doing.

What You Actually Need Once You Retire With PSHB

Here’s a simplified look at what you generally need to ensure strong health coverage in retirement under PSHB:

• Enroll in Medicare Part A (usually premium-free)

• Enroll in Medicare Part B (mandatory for most PSHB retirees)

• Stay enrolled in your PSHB plan

That combination typically covers:

• Hospital care

• Doctor visits

• Preventive services

• Lab tests and imaging

• Prescription drugs

• Emergency care

Unless you have highly specialized healthcare needs not addressed by your PSHB plan, adding a Medigap policy is more likely to add cost than value.

How to Evaluate Your Situation Before Enrolling in Medigap

Before enrolling in a Medicare Supplement policy alongside PSHB, ask yourself:

• Does my PSHB plan already pay my Medicare Part A and B coinsurance?

• Does it cap my out-of-pocket expenses?

• Does it include prescription drug coverage?

• Have I reviewed the Summary Plan Description from OPM?

If the answers are yes, then Medigap likely adds little or no value.

When to Reconsider If You Already Have Both

If you’re already paying for both a PSHB plan and a Medigap policy, now is a good time to reconsider. Review the coverage breakdown and compare it to your current needs:

• Are you duplicating benefits?

• Are you paying multiple premiums for the same services?

• Are your providers having issues with claim processing?

If so, you may want to cancel the Medigap policy. Contact a licensed agent listed on this website to explore whether dropping Medigap will affect your access to care or financial protections.

What This Means for Your Retirement Planning

Health coverage in retirement should offer peace of mind, not complexity and confusion. In 2025, PSHB plans—when paired with Medicare—offer one of the most integrated and cost-effective health coverage combinations available to postal retirees. Introducing a third layer of coverage through a Medigap plan often adds unnecessary costs and administrative headaches.

You deserve a setup that works for you, not against you.

Make Smarter Coverage Decisions—Avoid Overlap

Now that you understand how Medicare Supplement coverage can duplicate what your PSHB plan already provides, you can make a clearer decision about what to keep—and what to skip. If you’re unsure about your specific situation, speak with a licensed agent listed on this website who can help you review your current plan and future needs.