Key Takeaways

• While Postal Service Health Benefits (PSHB) contributions may appear manageable at first glance, a deeper analysis reveals a wide range of associated costs that quietly accumulate over time.

• Understanding how premiums, copayments, deductibles, coinsurance, and prescription limits interact helps you identify the actual financial burden you’re responsible for in 2025.

Understanding the Basics of PSHB Contributions

The PSHB program, launched in 2025 as a replacement for FEHB for Postal Service employees and retirees, sets a new structure for healthcare contributions. While the federal government continues to cover roughly 70% of the premium cost, you are responsible for the remaining share. However, premiums are just the beginning.

Your total cost includes much more than your monthly contribution. To get a clear picture of where your money is really going, it’s essential to understand each component of your plan’s cost structure.

Monthly Premium Contributions

Each PSHB plan requires a monthly premium. The government pays a fixed percentage, and you pay the rest. Your share varies based on the type of coverage you choose:

• Self Only

• Self Plus One

• Self and Family

These premiums are deducted from your paycheck if you’re an active employee, or from your annuity if you’re retired. Though the monthly cost might feel affordable, it forms the foundation of your recurring out-of-pocket expenses.

What You Pay Annually

Even a moderate monthly premium adds up. If you’re paying $250 per month for your share, that equals $3,000 annually. And if you’re covering a family, that figure could easily exceed $5,000 a year.

Deductibles: The Cost Before Coverage Begins

A deductible is the amount you must pay each year before your plan begins to pay its share of your medical expenses. In-network deductibles for PSHB plans generally range from $350 to $2,000, depending on whether your plan is considered low- or high-deductible.

• Lower deductibles are common in traditional plans.

• Higher deductibles apply to high-deductible health plans (HDHPs), which may be paired with Health Savings Accounts (HSAs).

You must meet this threshold each calendar year—starting January 1—before your coinsurance or copay benefits kick in. Many enrollees overlook this figure when calculating their true annual cost.

Copayments: The Fixed Charges That Add Up

Every visit to a primary care doctor, specialist, urgent care clinic, or emergency room can involve a copayment. Typical ranges in 2025 include:

• $20 to $40 for primary care

• $30 to $60 for specialists

• $50 to $75 for urgent care

• $100 to $150 for emergency services

While these charges seem modest in isolation, they can compound quickly—especially if you or a covered family member manages a chronic condition or sees multiple providers throughout the year.

Coinsurance: A Percentage-Based Expense

After you meet your deductible, you may still owe a percentage of the cost for certain services. This is known as coinsurance. For in-network care, coinsurance usually ranges from 10% to 30%. For out-of-network services, you may be responsible for 40% to 50%.

If you undergo surgery or receive specialty care, your coinsurance cost can be substantial. A 20% coinsurance on a $10,000 bill means you owe $2,000—even after meeting your deductible.

Prescription Drug Costs Under PSHB in 2025

In 2025, prescription coverage under PSHB is integrated with a Medicare Part D Employer Group Waiver Plan (EGWP) for Medicare-eligible annuitants. Whether you’re Medicare-eligible or not, your PSHB plan includes:

• An annual prescription deductible (up to $590)

• Tier-based copayments for generic, brand-name, and specialty drugs

• A $2,000 annual out-of-pocket cap for prescription drugs (new in 2025)

This cap is a major improvement over past systems, but many beneficiaries still pay hundreds each year for their medications before reaching the cap—especially if they rely on brand-name or specialty drugs.

Out-of-Pocket Maximums: The Safety Net (and Its Limits)

Each PSHB plan comes with an annual out-of-pocket maximum, which limits the total amount you’re responsible for each year. For 2025, typical in-network maximums are:

• $7,500 for Self Only

• $15,000 for Self Plus One or Self and Family

These limits exclude monthly premiums, which means even if you hit the out-of-pocket max, you’re still paying premiums separately.

Once you reach your out-of-pocket max, the plan covers 100% of covered services for the rest of the calendar year. But most people don’t reach this ceiling unless they experience a major illness, surgery, or hospitalization.

How Medicare Impacts Your PSHB Costs

If you’re a Medicare-eligible annuitant, you must enroll in Medicare Part B to remain eligible for PSHB coverage unless you’re exempt. Many plans offer:

• Reduced or waived deductibles

• Lower coinsurance

• Lower copays for Medicare-enrolled members

Additionally, your plan may coordinate with Medicare to reduce your out-of-pocket costs, especially for hospital and physician services. Still, you must pay the Medicare Part B premium ($185/month in 2025), which adds to your overall healthcare expense.

Annual Spending Snapshot: How It Adds Up

Let’s look at a breakdown of where your healthcare dollars may go in a single year:

• Premiums (Self + One): $6,250

• Deductible: $500

• Copayments (Routine + Specialist Visits): $900

• Coinsurance (1 surgery): $2,000

• Prescriptions (Pre-cap): $800

Total Annual Cost: $10,450 (not including potential Medicare Part B premiums)

Of course, this is a general estimate and will vary based on the plan you select and your healthcare usage. However, it illustrates that the financial impact of PSHB extends well beyond the monthly premium.

Hidden Costs and Unexpected Charges

There are other variables to keep in mind that can influence your total out-of-pocket spending:

• Out-of-network care: May involve higher coinsurance and uncovered expenses

• Non-formulary drugs: May not be covered at all or carry higher cost-sharing

• Prior authorization delays: Can result in upfront payments if a service isn’t pre-approved

• Balance billing: If you use an out-of-network provider, you may receive a separate bill

These hidden charges often emerge when you least expect them—especially during medical emergencies or complex treatments.

What to Do During Open Season

The Open Season, held each year from November to December, is your primary opportunity to:

• Compare PSHB plan options

• Evaluate your current health needs

• Switch to a different plan if necessary

• Add or remove family members

Use this time wisely. Review your previous year’s expenses, and try to estimate your expected healthcare use in 2025. Pay attention not just to premiums but also to deductibles, coinsurance, prescription tiers, and out-of-pocket limits.

What Matters Most When Choosing a PSHB Plan

A truly cost-effective plan isn’t always the one with the lowest premium. Instead, weigh these factors:

• Does the plan coordinate with Medicare, if applicable?

• Are your doctors and hospitals in-network?

• What are the prescription coverage details?

• Are deductibles and coinsurance manageable for your budget?

• Is there a plan that caps your total spending more efficiently?

Remember, PSHB is not one-size-fits-all. Your best-fit plan depends on your health status, age, family size, and financial priorities.

Taking Control of Your Healthcare Budget in 2025

Understanding the full cost structure of PSHB empowers you to make more informed decisions. If you’re preparing for retirement or already retired, knowing what each element means in dollars helps you better predict your annual healthcare expenses.

You’re not just comparing plans—you’re budgeting for your life. Don’t underestimate the value of accurate planning.

Make Smart Choices with the Full Picture in Mind

If your only focus is on the premium, you might overlook how much you’re actually paying throughout the year. Every copay, every deductible, and every prescription cost contributes to your total financial burden. Use the Open Season each year to reassess your healthcare needs and update your plan accordingly.

If you’re unsure which PSHB plan best fits your situation, get in touch with a licensed agent listed on this website. They can help you interpret plan details and estimate your annual out-of-pocket costs more precisely.