Key Takeaways

• PSHB premiums and out-of-pocket costs have risen in 2025, largely driven by increased healthcare service costs and regulatory shifts.

• Knowing how your contributions are divided—between premiums, cost-sharing, and administrative expenses—helps you make informed choices during Open Season.

Understanding the Total Cost of Your PSHB Plan in 2025

The Postal Service Health Benefits (PSHB) Program marks a major change for USPS employees and retirees, replacing FEHB coverage starting January 1, 2025. While many focus on premiums, that monthly deduction only tells part of the story. To fully grasp how much you’re actually spending—and why your costs are rising—you need to look at the total cost breakdown.

This article will help you unpack where every dollar goes, what’s behind the steady increases, and what you should watch for when evaluating your plan.

What Makes Up the Total Cost of PSHB Coverage?

Your PSHB expenses can be divided into several components:

• Premiums: Your monthly or biweekly contribution toward the cost of your health insurance plan.

• Deductibles: The amount you must pay before your plan starts covering services.

• Copayments: Fixed amounts you pay for certain services like doctor visits or prescriptions.

• Coinsurance: A percentage of the cost you share with your plan after meeting the deductible.

• Out-of-Pocket Maximum: The most you’ll pay in a year for covered services.

• Non-covered Services: Expenses for services not included in your plan, often paid entirely by you.

Premium Contributions in 2025

In 2025, your premium remains the most visible and consistent cost. For active USPS employees, the federal government typically covers about 70% of the premium, while retirees pay a share that depends on their enrollment type (Self Only, Self Plus One, or Self and Family).

The premiums have increased compared to 2024, reflecting broader inflation in medical costs and the structural changes involved in launching the PSHB system. Unlike under FEHB, PSHB plans are exclusively for Postal Service members, which slightly alters the risk pool dynamics.

Rising Deductibles and Out-of-Pocket Maximums

In 2025, many PSHB plans come with higher deductibles than they did under FEHB, especially if you’ve selected a High Deductible Health Plan (HDHP). For traditional plans, you might see:

• In-network deductibles ranging from $350 to $500 for Self Only.

• Self and Family or Self Plus One deductibles double that amount or more.

Out-of-pocket maximums for in-network care are now typically:

• $7,500 for Self Only coverage

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

These caps protect you from catastrophic financial loss, but reaching them means you’ve already paid thousands out of pocket.

Copayments: Frequency Matters More Than Amount

You might look at a $30 or $40 specialist copay and think it’s reasonable. But if you need multiple visits per month or multiple medications, those fixed fees add up fast. Here’s where PSHB costs can quietly pile up:

• $20 to $40 for primary care visits

• $30 to $60 for specialist visits

• $50 to $75 for urgent care

• $100 to $150 for ER visits

Even low copays can result in hundreds of dollars monthly if you’re managing chronic conditions or seeing multiple providers.

Coinsurance: The Percentage You Can’t Ignore

Many PSHB plans in 2025 use coinsurance rates between 10% and 30% for in-network services, and much higher for out-of-network care—often 40% to 50%.

Coinsurance kicks in after you meet your deductible and applies to services like:

• Imaging and diagnostics

• Outpatient surgeries

• Hospital stays

A 20% coinsurance on a $2,000 service means you’ll pay $400 out-of-pocket—on top of other expenses.

Prescription Drug Costs and the New Part D Cap

One of the biggest changes in 2025 is the introduction of a $2,000 annual out-of-pocket cap for prescription drug costs under Medicare Part D. This change benefits Medicare-eligible PSHB enrollees whose plans integrate with Part D.

If you’re not Medicare-eligible or opt out of the integrated Part D drug plan, your drug costs may continue to climb. Copays or coinsurance for non-preferred or specialty drugs remain high in some plans.

Administrative and Overhead Expenses

Not all of your PSHB contribution goes directly toward healthcare services. A portion covers:

• Administrative costs (billing, claims processing)

• Plan marketing and compliance

• Risk management and reserves

These aren’t often itemized for you, but they play a role in the total cost of coverage. As healthcare becomes more regulated and data-intensive, these back-end costs tend to rise.

Why Costs Keep Rising in 2025

Several trends are contributing to the continued rise in PSHB costs this year:

• Medical Inflation: Healthcare costs are increasing faster than general inflation, due to higher prices for procedures, hospital stays, and medications.

• Plan Reconfiguration: The PSHB shift required administrative overhaul and technology upgrades, which may have short-term cost impacts.

• Utilization: More frequent use of healthcare services drives up both plan costs and your share of the expenses.

• Aging Workforce: Retirees typically use more healthcare services, increasing overall claim payouts.

• Specialty Drug Prices: Biologics and advanced therapies continue to push prescription spending upward.

What Happens If You Don’t Have Medicare?

If you’re eligible for Medicare Part B but don’t enroll, you may lose out on cost-saving features built into your PSHB plan. In 2025, many PSHB plans waive deductibles, reduce coinsurance, and cap drug expenses for enrollees who are also signed up for Part B.

Failing to enroll in Medicare Part B can leave you exposed to higher cost-sharing amounts, especially for hospital and specialist care. Some plans may even limit coverage or increase your out-of-pocket burden without Medicare coordination.

Cost Awareness During Open Season

When Open Season comes around (typically November to December), don’t just compare premiums. Review the entire cost structure:

• What is the deductible, and how often do you expect to meet it?

• Are copayments manageable based on how often you see a doctor?

• Is the coinsurance affordable for major procedures?

• What is the out-of-pocket max, and can you budget for it?

Use plan brochures and tools provided on the OPM website or through USPS portals to estimate your true annual cost—not just the monthly deduction.

Tips to Stay Ahead of Rising Costs

To better manage your PSHB expenses in 2025, consider the following strategies:

• Coordinate with Medicare: Enrolling in both PSHB and Medicare Part B can significantly reduce your cost-sharing obligations.

• Choose a Plan Based on Your Usage: If you use few services, a lower-premium HDHP may work. If you need frequent care, a plan with lower copays and deductibles may cost less overall.

• Use Preventive Care: Most plans fully cover preventive services like screenings and annual checkups, which can help catch problems early.

• Track Your Out-of-Pocket Spending: Know when you’re approaching your deductible or out-of-pocket maximum, so you can plan larger procedures accordingly.

• Review Every Year: Even if your plan worked last year, changes in benefits, costs, or your health needs can mean it’s no longer the best fit.

Looking Closely at What You’re Really Paying For

The PSHB program may appear simple on the surface, but each component of cost adds up—and fast. What seems like a decent premium could hide expensive coinsurance or a sky-high deductible. Don’t underestimate how quickly small costs like copays or prescriptions can eat into your budget.

As you make health decisions in 2025, understanding the full breakdown of your PSHB costs will give you the clarity to avoid surprises. If you’re unsure which option best suits your medical and financial needs, it’s worth reaching out for guidance.

For personalized help comparing PSHB plans or coordinating with Medicare, get in touch with a licensed agent listed on this website today.