Key Takeaways

• PSHB plans in 2025 come with a variety of costs beyond monthly premiums, including copayments, coinsurance, deductibles, and out-of-pocket maximums that can significantly affect your total yearly expenses.

• Understanding each component of your PSHB plan can help you avoid surprise charges, make more informed choices during Open Season, and better align your healthcare budget with your retirement goals.

Monthly Premiums: Only the Beginning

Many postal workers and retirees focus on the monthly premium when choosing a Postal Service Health Benefits (PSHB) plan. While this is a fixed and visible cost, it’s only part of the story.

Premiums vary based on the type of enrollment—Self Only, Self Plus One, or Self and Family—and the plan you select. The federal government typically covers around 70% of the total premium cost, leaving you responsible for the remaining 30%. For retirees, the annuitant portion is deducted from your annuity each month unless otherwise arranged.

But once your premium is paid, your healthcare expenses are far from over. That’s where cost-sharing structures come in.

Deductibles Set the Stage

Before your PSHB plan starts covering services, you may have to meet a deductible. This is the amount you must pay out of pocket each year before your plan begins to share in the costs.

• In-network deductibles for 2025 typically range from $350 to $500 for low-deductible plans.

• High-deductible plans can run from $1,500 for Self Only to $3,000 or more for family coverage.

Understanding how your plan applies the deductible—whether it includes prescription drugs, preventive care, or only applies to certain services—can help you plan ahead.

Copayments: Flat Fees That Add Up

Copayments are fixed fees you pay for specific services. These are due at the time of service and vary based on the type of provider and visit.

• Primary care visits: Usually $20 to $40

• Specialist visits: Typically $30 to $60

• Urgent care: Often $50 to $75

• Emergency room: Generally $100 to $150

If you or your family members use healthcare services frequently, these copays can quietly build into hundreds or even thousands of dollars a year.

Coinsurance: A Percentage-Based Surprise

Coinsurance is a cost-sharing structure where you pay a percentage of the cost of a service after meeting your deductible.

In-network coinsurance typically ranges from 10% to 30%, while out-of-network coinsurance can rise to 40% or 50%. This means that for a $2,000 in-network procedure, you might owe anywhere from $200 to $600 out of pocket—even after the deductible.

These charges are less predictable than copayments, making them harder to budget for without understanding the full scope of your plan’s benefits.

Prescription Drug Costs and the New Part D Cap

If you’re Medicare-eligible, your PSHB plan includes integrated prescription drug coverage through Medicare Part D.

• In 2025, Medicare Part D includes a $2,000 out-of-pocket cap, eliminating the coverage gap that previously led to high mid-year drug expenses.

• You can also opt into a monthly payment plan that spreads your prescription costs across the year, making them easier to manage.

Even without Medicare, PSHB prescription tiers usually follow a structure:

• Generic drugs: Lowest copayment

• Preferred brand-name drugs: Moderate copayment

• Non-preferred drugs: Higher copayment or coinsurance

• Specialty drugs: Often subject to coinsurance

Out-of-Pocket Maximums: Your Safety Net

Every PSHB plan has an annual out-of-pocket maximum. Once you hit this limit with qualifying expenses (deductibles, copayments, and coinsurance), the plan covers 100% of further in-network costs for the rest of the year.

• In 2025, Self Only out-of-pocket maximums typically range from $5,000 to $7,500.

• For Self Plus One or Self and Family, the cap can range from $10,000 to $15,000.

This ceiling protects you financially during a serious illness or injury but reaching it means you’ve already paid thousands out of pocket.

Hidden Costs Many People Overlook

Several indirect expenses can catch you off guard:

• Out-of-network care: Even if your plan includes out-of-network benefits, the cost-sharing is steeper, and balance billing may apply.

• Non-covered services: These vary by plan and could include alternative treatments, experimental procedures, or cosmetic services.

• Billing surprises: Especially common when services are rendered by out-of-network providers at in-network facilities.

• Coordination with Medicare: If you’re not enrolled in Medicare Part B, some PSHB plans reduce their coverage or charge higher out-of-pocket fees.

Medicare Enrollment Matters More Than Ever

Starting in 2025, many postal retirees are required to enroll in Medicare Part B to maintain full PSHB benefits, unless they qualify for specific exemptions.

If you’re Medicare-eligible and not enrolled in Part B:

• Your PSHB plan may not cover certain services at the same rate.

• Prescription drug benefits could be impacted.

• You may face a late enrollment penalty if you decide to enroll in Part B later.

The combination of PSHB and Medicare typically results in lower out-of-pocket costs, reduced deductibles, and waived copayments—especially in plans designed to work with both.

Cost Comparison: Reviewing Your Plan Each Year

Open Season—from November to December each year—is your window to:

• Compare premiums and cost-sharing features

• Switch plans if your current one no longer meets your needs

• Ensure Medicare integration is aligned

Given the shift from FEHB to PSHB, reviewing your plan annually isn’t just recommended—it’s essential. Even small changes in copays or coinsurance can affect your yearly costs by thousands of dollars.

Resources and Tools to Help You Estimate Costs

To better understand your expected expenses:

• Use the OPM plan comparison tool to break down premiums, copays, and maximums.

• Review your plan brochure for coverage examples.

• Estimate how often you expect to use different services.

• Consider unexpected events—hospitalization, specialist visits, or high-cost prescriptions—and how your plan would respond.

Making Smart Health Plan Choices Starts with Awareness

Being proactive about your health plan is one of the most effective ways to protect your finances in retirement. PSHB offers valuable coverage, but only when you understand what you’re really paying for.

You owe it to yourself—and your budget—to dig deeper than the monthly premium. Analyze your plan’s full cost structure, align it with your Medicare status if applicable, and compare it to your actual healthcare usage.

If you’re unsure about which plan structure suits you best, it’s a good time to speak with a licensed insurance agent listed on this website. They can walk you through cost scenarios based on your current health and future needs.