Key Takeaways

• Coinsurance may appear to be a small percentage, but when applied to major medical services, it can result in thousands of dollars out-of-pocket.

• Understanding how coinsurance is calculated under your PSHB plan in 2025 is essential for planning, especially for hospital care, surgeries, and specialist treatments.

Understanding Coinsurance in the PSHB System

If you’re enrolled in the Postal Service Health Benefits (PSHB) Program in 2025, you’ve likely heard of coinsurance. It’s a term that seems simple enough: you split the cost of covered services with your health plan after you’ve met your deductible. But the true cost impact of that percentage isn’t always obvious. The percentages can seem low at first glance, but the actual dollar amounts they represent can be surprising depending on the type of care you’re receiving.

What Coinsurance Really Means in 2025

In the PSHB program, coinsurance is the portion of a medical bill that you are responsible for after meeting your annual deductible. Most plans under PSHB offer varying coinsurance rates based on the type of service and whether the provider is in-network or out-of-network.

Typical in-network coinsurance rates under PSHB in 2025 include:

• 10% to 30% for hospital and surgical services

• 20% to 40% for outpatient diagnostics or therapies

• 40% to 50% for out-of-network services

The exact rate depends on the plan you’ve chosen, but what matters more is how those percentages play out in actual dollar amounts.

How Coinsurance Is Calculated: The Math Behind the Percentage

Let’s break it down. Say your plan has:

• A $500 deductible

• A 20% coinsurance rate for in-network hospital services

• An in-network hospital charges $12,000 for a procedure

Once you’ve paid the $500 deductible, the coinsurance kicks in. You’re then responsible for 20% of the remaining $11,500. That’s $2,300 out of pocket just from coinsurance alone.

So while 20% sounds manageable, the math tells a different story.

Comparing Coinsurance to Copayments

It’s easy to confuse coinsurance with copayments, but they function very differently. Copayments are flat fees you pay upfront (like $40 for a specialist visit), while coinsurance is a percentage of the total cost after your deductible is met.

Here’s how they differ in practical terms:

• Copayments offer cost predictability

• Coinsurance fluctuates depending on the total charge for the service

That means your share of the cost can balloon quickly if you need surgery, an ER visit, or advanced imaging.

The Deductible Comes First

Before coinsurance even applies, you must meet your deductible. In 2025, most PSHB plans have in-network deductibles ranging from $350 to $2,000. Until you’ve met that amount, you’re responsible for 100% of the covered medical expenses.

Once you’ve met your deductible, then the shared cost model begins with coinsurance. Your plan covers the majority of the cost, and you pay the remaining percentage.

Out-of-Pocket Maximums: Your Safety Net

Fortunately, there’s a limit to how much coinsurance you’ll pay annually. In 2025, PSHB plans cap out-of-pocket maximums at around:

• $7,500 for Self Only coverage

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

This maximum includes:

• Deductibles

• Coinsurance

• Copayments

Once you hit your plan’s out-of-pocket maximum, the plan pays 100% for covered services for the rest of the year. But keep in mind, until you reach that ceiling, coinsurance remains an active cost.

Why Hospital Care Triggers the Highest Coinsurance Costs

Hospitalizations are where coinsurance becomes most noticeable. Services involved in hospital care include:

• Room and board

• Surgical fees

• Anesthesia

• Lab tests

• Radiology

• Specialist consultations

Each of these has an associated charge, and if your coinsurance is 20% across the board, the costs pile up quickly. Even a short hospital stay can lead to $3,000 to $5,000 in coinsurance expenses.

In out-of-network situations, the impact is even greater. You may be on the hook for up to 50% of the total costs, and out-of-network bills often exceed in-network rates.

Specialist Care and Therapies: Often Overlooked Coinsurance Triggers

Another area where coinsurance takes people by surprise is ongoing specialist care or therapies like:

• Physical therapy

• Chemotherapy

• Dialysis

• Mental health therapy

These services often occur weekly or biweekly. Even a 20% coinsurance can become a burden over several months. If one therapy session costs $400, you’re paying $80 per session. Over time, that adds up substantially.

Imaging and Diagnostics: High Ticket, High Coinsurance

MRI, CT scans, and advanced lab work also come with significant costs. Even with in-network discounts, a single MRI might cost $1,500. With a 30% coinsurance, you’ll owe $450 after the deductible.

When multiple tests are ordered—especially in complex diagnostic cases—you could face thousands in coinsurance within a short time frame.

Emergency Room Visits: Costly Even Before Hospitalization

Emergency care often involves multiple services billed separately:

• Facility fee

• ER physician fee

• Imaging (X-ray, CT, MRI)

• Labs

Each comes with its own charge and coinsurance percentage. A single ER visit without hospitalization can still result in hundreds or even thousands in coinsurance costs.

Out-of-Network Services: A Different Equation

Using providers outside your PSHB plan’s network changes the coinsurance math significantly. You’re not only paying a higher percentage (typically 40% to 50%) but also risk being billed the difference between the provider’s charges and what your plan allows (balance billing).

Here’s how that can look:

• In-network: 20% coinsurance on $1,000 = $200

• Out-of-network: 50% coinsurance on $1,500 (plus balance billing) = $750 or more

That difference in network status can dramatically change what you owe.

Annual Planning and Budgeting Tips

To manage coinsurance effectively, you should:

• Review your plan brochure to understand your coinsurance percentages

• Know your deductible and how close you are to reaching it

• Track your out-of-pocket maximum to anticipate when coverage shifts to 100%

• Stay in-network whenever possible

• Ask for cost estimates before procedures or services

• Use preventive care benefits which are often covered at 100% without coinsurance

medicare and PSHB: How Coinsurance Changes After 65

If you’re eligible for Medicare and enroll in Part B, your coinsurance under PSHB may be reduced significantly in 2025. Many PSHB plans coordinate with Medicare to lower or even eliminate cost-sharing for services covered by both programs.

Some PSHB plans waive deductibles or coinsurance entirely when Medicare is the primary payer. This can provide major financial relief during retirement, especially for those needing frequent care.

However, Medicare coordination benefits vary by PSHB plan. Always check how your specific plan integrates with Medicare.

The Psychology of Small Percentages

Why do people underestimate coinsurance? Because percentages mask absolute costs. A 10% or 20% coinsurance rate feels small, but when applied to high-cost services, the totals are anything but. It’s a psychological blind spot that can lead to financial strain if you’re not prepared.

Understanding the math behind coinsurance helps you:

• Budget more accurately

• Choose the right plan during Open Season

• Avoid unexpected financial stress during health events

Rethink Your Coverage Strategy During Open Season

From November to December each year, you have a chance to reassess your PSHB plan. If you anticipate needing:

• Surgery

• Hospital care

• Ongoing therapies

Then prioritize plans with lower coinsurance rates, lower out-of-pocket maximums, and good Medicare coordination if you’re eligible.

Open Season is the best time to run the numbers. A few percentage points of difference in coinsurance can mean hundreds or even thousands in savings over the course of a year.

Why You Can’t Afford to Ignore Coinsurance

In 2025, healthcare costs continue to rise. While premiums and deductibles get a lot of attention, coinsurance quietly remains one of the biggest out-of-pocket expenses for PSHB members. It’s not fixed, it scales with your usage, and it can rapidly become unaffordable without proper planning.

If you’re not looking closely at your coinsurance responsibilities, you may be underestimating your real exposure.

The Real Cost Is in the Fine Print

Take time to read your PSHB plan documents carefully. Look beyond just monthly premiums and deductibles. Understand where coinsurance applies, which services it affects most, and how quickly it adds up.

A licensed agent listed on this website can walk you through your options, clarify your coverage, and help you compare coinsurance structures across different PSHB plans. Whether you’re planning for a procedure, managing a chronic condition, or simply being proactive, understanding coinsurance could be the difference between financial stability and surprise medical debt.