Key Takeaways

• In 2025, understanding the difference between PSHB coinsurance and deductibles is essential if you want to avoid paying more out of pocket for your health care services.

• Your overall costs depend not just on your monthly premium, but also on how your plan uses deductibles and coinsurance to share the cost of care.

Why You Need to Understand Both

If you’re a United States Postal Service (USPS) employee or retiree, your health benefits have officially transitioned to the Postal Service Health Benefits (PSHB) Program as of January 1, 2025. While the plan names and providers might feel familiar, there’s a lot going on behind the scenes—especially when it comes to what you pay out of pocket.

The most overlooked cost-sharing features? Deductibles and coinsurance. These two can work together to create a payment structure that feels simple on paper but gets complex quickly in real life.

Understanding the difference between them isn’t just a financial literacy exercise—it could directly impact how much you’re spending on doctor visits, surgeries, prescriptions, and more.

What Is a Deductible?

A deductible is the amount you must pay out of your own pocket before your PSHB plan starts sharing the cost of most services. It resets every calendar year and applies to many types of care, especially hospitalizations, outpatient services, and diagnostic testing.

Here’s how it works:

• If your deductible is $500, you’re responsible for paying the full cost of covered services until you’ve paid that $500.

• Once you meet the deductible, your plan begins to pay a portion of covered expenses.

Key points about deductibles in 2025:

• Many PSHB plans use tiered deductible levels, depending on whether you’re enrolled in Self Only, Self Plus One, or Self and Family.

• In-network vs. out-of-network services may have separate deductibles.

• Preventive services are generally covered before you meet your deductible.

What Is Coinsurance?

Coinsurance is the percentage of the cost you pay for a covered health care service after you’ve met your deductible. It kicks in after the deductible is satisfied and continues until you hit your out-of-pocket maximum for the year.

For example:

• If your plan lists a 20% coinsurance for outpatient surgery and the total allowable cost is $1,000, you would pay $200, and your plan would pay $800—after you’ve met your deductible.

Coinsurance features to be aware of in 2025:

• Some services may have higher coinsurance (30% or more) depending on the type of care.

• Out-of-network services often come with significantly higher coinsurance rates.

• Coinsurance amounts can vary even among in-network providers.

How These Costs Work Together

The deductible and coinsurance work in tandem to determine how much you’ll pay for health care throughout the year.

The 2025 PSHB payment flow generally looks like this:

1. You pay 100% of medical costs until your deductible is met.

2. You pay coinsurance (a percentage of the cost) for services once your deductible is met.

3. You pay nothing after you reach your annual out-of-pocket maximum.

This means your total yearly costs are a combination of:

• Premiums (paid monthly regardless of usage)

• Deductibles (paid first)

• Coinsurance (paid after the deductible)

3 Ways You Might Be Paying More Than Expected

1. Underestimating Your Deductible’s Reach

In 2025, many PSHB plans have service-specific deductibles that apply only to certain categories like hospital care or outpatient services. Some enrollees assume the deductible applies across the board, but in reality, certain services might not count toward it. This can delay when coinsurance kicks in and result in higher bills.

2. Ignoring Out-of-Network Penalties

Even if your deductible is manageable, using an out-of-network provider can dramatically raise your coinsurance rate—from something like 20% in-network to 50% out-of-network. In addition, the allowed amount covered by the plan is often lower for out-of-network services, meaning you’re on the hook for the difference.

3. Forgetting About the Out-of-Pocket Maximum

While the out-of-pocket maximum offers a safety net, not all your spending counts toward it. For instance:

• Non-covered services

• Balance billing from out-of-network providers

• Premiums

None of these count toward your maximum limit, so even if you’re paying a lot, it may not reduce future costs.

What About Copayments?

You might be wondering where copayments fit into all of this. A copayment (or copay) is a fixed dollar amount you pay for specific services, like $30 for a doctor visit. In many PSHB plans, copays apply to routine services like:

• Primary care visits

• Generic prescriptions

• Urgent care visits

Copays often apply before you meet your deductible and are not the same as coinsurance, which is a percentage-based cost. It’s important not to confuse the two.

Comparing In-Network and Out-of-Network Costs

In-network care:

• Lower deductibles

• Lower coinsurance rates

• Predictable out-of-pocket limits

Out-of-network care:

• Higher or separate deductibles

• Higher coinsurance (can be double or more)

• Greater risk of balance billing

In 2025, PSHB enrollees are strongly encouraged to stay in-network for this reason. Choosing in-network providers can reduce your risk of unexpected charges.

Annual Reset and Timeline Awareness

One critical element to understand in 2025 is the annual reset of your deductible and out-of-pocket spending:

• January 1 of each year resets the clock. Even if you met your deductible in December, you start fresh in January.

• Out-of-pocket spending is also tracked per calendar year, not by your enrollment anniversary.

This is especially important when planning surgeries, diagnostic testing, or specialist care. Timing could impact how much you pay.

Coordination with Medicare

If you’re a USPS retiree enrolled in Medicare and PSHB, your coinsurance and deductible responsibilities may look different depending on how your benefits coordinate. In 2025:

• Many PSHB plans waive or reduce coinsurance and deductibles for retirees who are also enrolled in Medicare Part B.

• Medicare typically pays first, with PSHB acting as the secondary payer.

This setup can significantly lower your out-of-pocket costs, but only if you’re actively enrolled in both plans.

Smart Questions to Ask When Reviewing Your Plan

To avoid surprises, make sure you review your PSHB plan’s benefit brochure with the following questions in mind:

• What is my in-network and out-of-network deductible?

• What services are subject to coinsurance?

• Does coinsurance vary by service type or provider?

• What counts toward the out-of-pocket maximum?

• Are there separate deductibles for different services?

• How does the plan coordinate with Medicare if I’m retired?

You’re Not Alone in Figuring This Out

If you feel like this is more complex than expected—you’re not wrong. PSHB plans vary widely, and even two plans that look similar on the surface can have very different cost-sharing rules underneath.

To help protect your budget in 2025, you need to be proactive: read your plan documents, ask questions, and make sure you’re using in-network providers. When in doubt, speak with someone who understands the fine print.

Your Health coverage Costs Depend on the Details

Understanding how coinsurance and deductibles work under your 2025 PSHB plan isn’t optional—it’s essential. The more you understand, the better you can plan for medical expenses, avoid costly surprises, and choose the right timing for care.

For peace of mind, get in touch with a licensed agent listed on this website. They can help you walk through the specifics of your plan and make sure you’re getting the best value from your benefits.