Key Takeaways

• Premiums alone don’t capture the full cost picture of Postal Service Health Benefits (PSHB) plans—deductibles, coinsurance, and Medicare integration significantly affect what you actually pay.

• Evaluating PSHB against the Federal Employees Health Benefits (FEHB) Program means understanding service rules, eligibility changes, and how benefits shift over time—especially in retirement.

Why You Can’t Just Compare Premiums

If you’re trying to decide between FEHB and PSHB, premiums might seem like the obvious place to start. But in 2025, that approach is far too limited. You need a deeper look at how both programs function, how they support you in different phases of your life, and what hidden or long-term costs could surprise you later.

The Premium May Be Lower—But Are You Paying More Later?

The monthly premium is only one part of the total cost of your health coverage. PSHB premiums may appear more attractive on the surface, but other costs could offset the savings:

• Deductibles: Many PSHB plans in 2025 have in-network deductibles ranging from $350 to over $1,500 depending on the type of plan.

• Coinsurance: For certain services, you could be paying 20%–30% out of pocket for in-network care and up to 50% for out-of-network.

• Copayments: The range of copays—especially for specialists and urgent care—adds up fast if you or your dependents need frequent visits.

When comparing FEHB with PSHB, look at the total cost of care over a year based on your likely medical usage. Don’t let the monthly price tag distract you from what really comes out of your wallet.

Medicare Integration: A Critical Factor in Retirement

One of the biggest differences between FEHB and PSHB shows up when you turn 65 and become eligible for Medicare.

PSHB Requires Medicare Part B Enrollment (With Exceptions)

Under the PSHB system in 2025, Medicare-eligible annuitants and their family members must enroll in Medicare Part B to keep their full PSHB benefits. Exceptions apply if:

• You retired on or before January 1, 2025

• You were age 64 or older on January 1, 2025

• You live abroad or are covered by VA/Indian Health Services

Coordination Between Medicare and PSHB

PSHB plans integrate more closely with Medicare than FEHB plans traditionally have. This means:

• Lower out-of-pocket costs when both Medicare Part B and PSHB are active

• Waived deductibles and reduced copayments in some plans

• Automatic enrollment into a Medicare Part D drug plan through your PSHB provider

This coordination can bring real savings—but only if you’re enrolled in Medicare. Otherwise, you risk losing key PSHB benefits.

Coverage Rules That May Impact You Differently

You may be surprised by how much plan administration can vary between FEHB and PSHB. These differences affect everything from network access to claim approvals.

Provider Networks

PSHB plans sometimes have narrower or more regional networks compared to their FEHB predecessors. Before switching, check:

• Are your current doctors included?

• Are there enough specialists and hospitals in your area?

• Will you have access to care while traveling?

Preauthorization Requirements

PSHB plans tend to enforce stricter preauthorization policies for high-cost services, procedures, and specialty drugs. These rules can:

• Delay care

• Add stress to complex health situations

• Require extra paperwork on your part

Understanding these administrative nuances is just as important as comparing cost.

Eligibility and Enrollment Nuances

In 2025, many USPS employees and retirees are automatically enrolled in a PSHB plan that mirrors their former FEHB coverage. But automatic enrollment doesn’t mean automatic understanding.

What Carries Over, What Doesn’t

• Dependent eligibility rules mostly remain consistent, but check if your specific plan has changed age cutoffs or documentation needs.

• Plan names may be similar to FEHB counterparts, but coverage can vary.

• Prescription benefits under PSHB often use a Medicare EGWP model, which could change how your medications are approved and dispensed.

Take time to review your plan’s 2025 PSHB brochure—what looks the same at a glance may carry new restrictions or changes in scope.

Retiree Contribution Rates: What You Actually Pay

The annuitant share of PSHB premiums in 2025 can surprise those who assume their costs stay flat in retirement. Although the government still covers about 70% of the plan’s total cost:

• You’ll pay the remainder—monthly amounts ranging from the low $200s for Self Only to over $500 for Self Plus One or Self & Family plans.

• You’re responsible for the full Part B premium (now $185/month in 2025) if required to keep your PSHB benefits.

Even if your plan has a modest base premium, these added costs make budgeting for retirement health care a more complex equation than under FEHB.

Out-of-Pocket Maximums and Catastrophic Limits

While PSHB plans include annual out-of-pocket maximums to protect you from extreme expenses, those limits can be higher than what you may be used to in FEHB.

• In 2025, in-network out-of-pocket maximums are often $7,500 for Self Only and $15,000 for family coverage.

• Out-of-network caps are generally much higher, if they exist at all.

If you have a year with major medical needs, that difference can be financially significant.

Long-Term Care, Vision, and Dental: What’s Not Included

Neither FEHB nor PSHB automatically includes long-term care benefits, and both offer limited vision and dental coverage unless you’re enrolled in FEDVIP separately. That hasn’t changed in 2025.

However, it’s worth noting:

• Some PSHB plans offer vision and dental discounts, but these are not substitutes for full coverage.

• FEDVIP enrollment must be handled separately, and coverage continues unchanged between FEHB and PSHB.

If you’re relying on your federal benefits for complete care, make sure you account for these blind spots.

Prescription Drug Costs Are Capped—But Details Matter

One welcome change in 2025 is the cap on out-of-pocket costs for prescription drugs under Medicare Part D.

• Once your total out-of-pocket drug spending reaches $2,000, your plan pays 100% for the rest of the year.

• This applies if you are enrolled in Medicare Part D through your PSHB plan’s EGWP (Employer Group Waiver Plan).

However, before you reach that cap, you may still face high tier-based copayments or coinsurance for non-generic or specialty drugs. Plan brochures outline these drug tiers in detail.

Annual Plan Review Still Matters More Than Ever

Open Season still runs from November to December, and it’s your only chance to:

• Switch PSHB plans

• Adjust coverage based on new health needs

• Compare costs as they change year to year

Even though you may be automatically enrolled in a plan, failing to review it annually could mean paying more—or losing access to services you use.

When Lower Premiums Aren’t Worth It

In 2025, the appeal of a lower monthly premium can be strong, especially for retirees on a fixed income. But if that lower premium comes with:

• Higher deductibles

• Stricter provider access

• Gaps in prescription coverage

…it may end up costing you more over time. Evaluate PSHB with the full year in mind, not just the monthly statement.

What This Means for You Now

If you’re deciding whether to stay with your automatically selected PSHB plan or make a change during Open Season, don’t just focus on the premium. Consider how the plan works with Medicare, how it handles provider networks, and whether your out-of-pocket maximum fits your financial situation.

Healthcare in retirement is one of your biggest expenses—and it’s one of the easiest to underestimate.

Make an Informed Choice with Help

Understanding the full cost and coverage picture between FEHB and PSHB isn’t always straightforward, especially with the new changes in 2025. If you’re unsure about how your plan fits into your budget or future needs, it’s worth speaking with someone who can help.

Get in touch with a licensed agent listed on this website to walk through your options and ensure your coverage aligns with your retirement goals.