Key Takeaways:

1. Understanding coinsurance is crucial to managing your healthcare costs effectively under the Postal Service Health Benefits (PSHB) program.

2. Knowing how coinsurance applies to hospital stays, surgeries, and medications can help you plan for potential out-of-pocket expenses.

Breaking Down Coinsurance

Coinsurance is a percentage of the costs you pay for medical services after meeting your deductible. Unlike copayments, which are fixed amounts, coinsurance shares costs between you and your health plan. For example, under PSHB, you might pay 20% of the service cost while the plan covers 80%. This shared-cost structure means your out-of-pocket expenses can vary significantly depending on the type of service.

Why Coinsurance Matters

Understanding your coinsurance responsibilities helps you:

• Budget for healthcare costs beyond premiums.

• Make informed decisions about using in-network versus out-of-network providers.

• Avoid surprise bills by knowing when coinsurance applies.

Coinsurance and Hospital Stays

Hospital stays can be one of the most significant healthcare expenses, and coinsurance plays a major role in your final bill. Let’s dive into how it works.

Inpatient Services

For inpatient hospital stays, coinsurance typically kicks in after you’ve met your annual deductible. Under PSHB, your coinsurance rate might be 10%-30% for in-network hospitals and 40%-50% for out-of-network facilities. These percentages can result in substantial costs, particularly for extended stays.

Daily Coinsurance Rates

Some plans include daily coinsurance rates for hospital stays beyond a certain number of days. For example, you may have no cost for the first 5 days but pay a fixed daily amount starting on day 6. Understanding these thresholds is essential to managing costs during longer hospitalizations.

Skilled Nursing Facilities

Coinsurance also applies to skilled nursing care following a hospital stay. Similar to hospital stays, in-network care costs less than out-of-network services. Be sure to verify what portion of these services is covered and plan for your share of the expenses.

Coinsurance and Surgeries

Surgical procedures can quickly become expensive, making it critical to understand how coinsurance applies.

Pre-Surgery Costs

Coinsurance often starts with pre-surgery consultations, imaging tests, and lab work. These services are subject to your plan’s coinsurance rates, so it’s important to verify coverage and determine your out-of-pocket share before scheduling procedures.

During Surgery

For the surgery itself, coinsurance applies to:

• The surgeon’s fees.

• Anesthesiologist charges.

• Operating room and equipment costs.

Your share depends on whether the facility and providers are in-network. Choosing in-network surgeons and facilities can significantly reduce your financial burden.

Post-Surgery Follow-Ups

Coinsurance may also extend to follow-up visits and physical therapy. Keep in mind that these costs can add up over time, especially for major surgeries requiring long-term recovery.

Coinsurance and Medications

Prescription medications are another area where coinsurance can impact your healthcare budget.

Tiered Formulary System

Many PSHB plans use a tiered formulary system, where medications are categorized into different tiers based on cost. Coinsurance rates are often higher for non-preferred or specialty drugs, while generic options may have lower rates.

Specialty Medications

Specialty drugs for chronic or rare conditions typically come with high price tags and higher coinsurance percentages. Some PSHB plans include a cap on out-of-pocket costs for these medications, so review your benefits to understand your limits.

Mail-Order Pharmacy Options

Using mail-order pharmacy services for maintenance medications can help lower costs. These services often offer extended supplies (e.g., 90 days) at a lower coinsurance rate compared to retail pharmacies.

Strategies to Minimize Out-of-Pocket Costs

Navigating coinsurance doesn’t have to be overwhelming. Here are some practical tips to help you manage your expenses:

Maximize In-Network Services

Always aim to use in-network providers and facilities. Out-of-network care typically comes with higher coinsurance rates and additional costs that your plan may not cover.

Review Your Plan Documents

Your PSHB plan documents outline coinsurance rates for various services. Reviewing these details can help you anticipate costs and avoid surprises.

Budget for Your Deductible and Maximum Out-of-Pocket Limit

Coinsurance applies only after you meet your annual deductible. Once you hit your maximum out-of-pocket limit, your plan covers 100% of eligible expenses for the rest of the year. Setting aside funds to cover these amounts can prevent financial strain.

Take Advantage of Preventive Services

Many preventive services, such as annual check-ups and screenings, are fully covered under PSHB plans without requiring coinsurance. Using these services can help detect issues early and avoid more costly treatments later.

Explore Flexible Spending Accounts (FSAs)

If you’re eligible, consider using an FSA to pay for coinsurance expenses. FSAs allow you to set aside pre-tax dollars for healthcare costs, reducing your taxable income and saving money overall.

Understanding Annual Caps

In 2025, the PSHB program includes annual out-of-pocket caps that limit your total spending on covered services. For example:

• In-Network Caps: These limits apply to in-network care and can significantly reduce your financial risk.

• Out-of-Network Caps: These are usually higher than in-network caps, reflecting the increased costs of out-of-network care.

Knowing these caps and tracking your expenses throughout the year can help you plan effectively.

What to Watch Out For

Coinsurance is just one piece of the puzzle. Here are additional factors to consider:

Balance Billing

Out-of-network providers may bill you for the difference between their charges and what your plan covers. This practice, known as balance billing, can lead to unexpected expenses. Always verify whether a provider is in-network to avoid these charges.

Coordination of Benefits

If you have multiple insurance plans, such as Medicare and PSHB, ensure you understand how coinsurance applies. Coordination of benefits rules determine which plan pays first and how costs are shared.

The Bigger Picture: Coinsurance in PSHB

Coinsurance is a fundamental aspect of your PSHB plan. While it may seem complex at first, understanding its role can empower you to:

• Make informed healthcare decisions.

• Reduce out-of-pocket expenses.

• Take full advantage of your benefits.

By staying proactive and informed, you can turn coinsurance from a source of stress into a manageable part of your healthcare strategy.

Planning Ahead for Smarter Healthcare Choices

Coinsurance affects many aspects of your healthcare, from hospital stays to medications. By understanding how it works under the PSHB program, you can better anticipate costs and make choices that align with your financial goals and health needs.