Key Takeaways

  • Medicare Supplement (Medigap) plans often duplicate benefits that are already included in your Postal Service Health Benefits (PSHB) plan, especially if you’re enrolled in Medicare Part B.

  • You may end up paying for coverage you don’t need if you hold both a PSHB plan and a Medicare Supplement plan simultaneously.

Understanding What PSHB Offers in 2025

The Postal Service Health Benefits (PSHB) Program, launched officially in 2025, is tailored specifically for Postal Service employees and retirees. This program replaces prior Federal Employees Health Benefits (FEHB) coverage for the USPS population and brings with it several enhanced features, especially for those who are Medicare-eligible.

If you are enrolled in Medicare Part A and Part B, many PSHB plans offer:

  • Waived or reduced deductibles

  • Lower copayments and coinsurance

  • Broad access to in-network providers

  • Prescription drug coverage integrated with Medicare Part D through an Employer Group Waiver Plan (EGWP)

This integration allows PSHB to function almost like a combination of a traditional health plan and a Medicare Supplement plan. For many enrollees, this eliminates the need to buy an additional Medigap policy.

What Medicare Supplement Plans Were Originally Designed For

Medicare Supplement plans, often referred to as Medigap policies, were created to cover the gaps left by Original Medicare. These gaps include:

  • Medicare Part A coinsurance and hospital costs beyond 60 days

  • Part B coinsurance and copayments

  • First three pints of blood

  • Hospice coinsurance

  • Skilled nursing facility coinsurance

These policies were particularly useful before integrated coverage options, like those found in PSHB, became standard for retirees. But in 2025, the redundancy of having both PSHB and Medigap is more apparent than ever.

1. Dual Coverage Could Mean Paying Twice for the Same Benefit

If you’re already enrolled in a PSHB plan that coordinates with Medicare Part B, you’re likely receiving reduced out-of-pocket costs already. Adding a Medigap policy may result in:

  • Duplicate coverage for hospital and doctor visits

  • Additional monthly premiums without additional value

  • Confusing claims processes and overlapping benefits

The PSHB plan acts as secondary to Medicare once Part A and Part B are active. This means it already picks up costs that Medicare leaves behind—just like Medigap would. But unlike Medigap, PSHB also includes prescription drug coverage, provider networks, preventive care incentives, and broader health management services.

2. Medigap Doesn’t Add Value to PSHB Prescription Coverage

PSHB plans for Medicare enrollees include a Medicare Part D prescription drug benefit through an EGWP. This plan comes with:

  • A $2,000 out-of-pocket cap on drug expenses for 2025

  • Access to national pharmacy networks

  • Coverage for common medications, including insulin ($35 monthly cap)

  • Catastrophic phase elimination (now fully covered after reaching the cap)

Medigap policies do not include any prescription drug coverage. So, if your goal is medication access and affordability, PSHB is far more robust in this regard, making a separate Medigap plan ineffective for drug-related costs.

3. Claims Coordination Is More Complex with Medigap + PSHB

Medicare is always the primary payer when you’re eligible for it and have enrolled in Part A and B. With Medigap, Medicare sends the remaining claim amount to your supplement plan.

If you also hold PSHB coverage:

  • It’s not always clear which plan is secondary

  • You may experience delays or denials due to overlapping benefits

  • You’ll need to manage multiple insurance cards, Explanation of Benefits (EOBs), and providers who may be unsure how to bill

PSHB plans are already structured to work smoothly with Medicare. Adding a third party into the mix can create administrative headaches for both you and your providers.

4. PSHB Plans Often Incentivize Medicare Enrollment with Added Benefits

Unlike in previous FEHB years, most PSHB plans in 2025 offer specific incentives to encourage you to enroll in Medicare Part B. These incentives might include:

  • Part B premium reimbursement (partial or full, depending on the plan)

  • Waived cost-sharing when Medicare is primary

  • Access to expanded networks or services

Medigap plans cannot offer similar incentives. These PSHB extras may significantly reduce your out-of-pocket costs and should be carefully considered before adding a supplement plan.

5. Enrollment Timing and Eligibility Differences

PSHB and Medigap plans follow different enrollment rules:

  • Medigap: You must enroll during a six-month period after you turn 65 and enroll in Medicare Part B. After that, you may be subject to underwriting.

  • PSHB: You can make changes during the annual Open Season (typically November to December) or after a qualifying life event.

If you miss your Medigap enrollment window and later realize it doesn’t add value to your PSHB benefits, dropping it could leave you unable to get it back without medical underwriting.

6. You May Lose Out on PSHB Cost Savings by Splitting Coverage

Some PSHB plans waive hospital and medical deductibles entirely when you are enrolled in Medicare Parts A and B. However, if you use Medigap and decline to coordinate with your PSHB provider:

  • You may not receive these PSHB incentives

  • You might be ineligible for certain coordinated care programs

  • Your premiums may be higher than necessary for duplicated benefits

It’s crucial to verify whether your PSHB plan still applies all its Medicare coordination advantages when you hold a Medigap plan. Many do not.

7. The Value of a Single, Integrated Coverage Path

In 2025, simplicity in health coverage isn’t just a convenience—it’s a strategy. When you use your PSHB plan as your secondary insurance alongside Medicare, you benefit from:

  • Fewer claims issues

  • One-stop coordination for medical and drug services

  • Consistent customer service from one plan

This streamlining also reduces the risk of administrative errors, billing confusion, and benefit misapplication.

8. The Postal Service’s Medicare Integration Requirement Makes Medigap Unnecessary

For most USPS retirees and family members who are Medicare-eligible, enrolling in Medicare Part B is now required to maintain PSHB coverage. This integration makes Medigap practically irrelevant for your situation. PSHB plans already provide secondary coverage after Medicare, handling:

  • Hospital coinsurance

  • Outpatient copays

  • Emergency care costs

Since PSHB plans are specifically built with Medicare coordination in mind, they fulfill the very role Medigap was designed for—without needing to pay for an additional policy.

Why You Should Think Twice Before Buying a Supplement

When evaluating whether to purchase a Medicare Supplement plan in 2025, it’s critical to look at what your PSHB plan already provides. In many cases, PSHB offers the same or better coverage, with integrated Medicare coordination and prescription drug protection.

If you’re already paying a PSHB premium and a Medicare Part B premium, adding a third plan with overlapping benefits often brings no added value—just another bill.

You’re better off reviewing your PSHB plan brochure and speaking with a licensed agent listed on this website to confirm your options before purchasing any supplemental policy.

Get the Most Out of What You Already Have

The PSHB Program is built to offer broad, Medicare-coordinated benefits to Postal Service retirees. Adding a Medicare Supplement plan may not improve your coverage—it may just complicate it and cost you more. Make sure to:

  • Understand what your PSHB plan offers alongside Medicare

  • Check if you already receive the same benefits a Medigap policy provides

  • Avoid unnecessary expenses by working with a licensed agent listed on this website

If you’re uncertain, don’t guess. Contact a licensed agent listed on this website today and ensure your choices align with your actual healthcare needs.