Key Takeaways

• Even if your monthly PSHB premium looks affordable, your total yearly healthcare costs could still be rising due to higher deductibles, coinsurance, and service utilization.

• Understanding how PSHB plans shift costs beyond premiums is essential to making a financially sound health coverage decision, especially if you are Medicare-eligible.

Monthly Contributions Don’t Tell the Whole Story

Looking only at your Postal Service Health Benefits (PSHB) monthly premium can be misleading. While your contribution might appear manageable, what matters more is the full financial picture that includes your deductible, coinsurance, copayments, and prescription costs throughout the year. In 2025, as healthcare expenses rise across the board, this broader view becomes even more critical for evaluating affordability.

Premiums are just one component of your healthcare costs. Depending on the plan you choose, you could end up spending far more out-of-pocket for the care you actually use. And if you’re assuming low premiums mean low total costs, you might be overlooking some of the most impactful expenses.

What Out-of-Pocket Costs Are Included?

Out-of-pocket costs refer to what you pay for medical services beyond your monthly premium. These include:

• Deductibles: The amount you must pay before your plan starts covering most services. In PSHB plans, this can range from $350 to $2,000 depending on whether you’re in a low- or high-deductible plan.

• Coinsurance: A percentage of the cost you pay for services after meeting your deductible. For example, many PSHB plans require 10% to 30% coinsurance for in-network services.

• Copayments: Fixed amounts you pay for specific services such as $20 for a primary care visit or $60 for a specialist.

• Prescription drug costs: These can vary by formulary tier, whether you use a preferred pharmacy, and whether you are Medicare-eligible.

• Out-of-network care: If you receive care outside your plan’s network, costs can be significantly higher, often with coinsurance up to 50%.

Why These Costs Are Rising in 2025

Several factors are contributing to the increase in out-of-pocket costs, even for plans with relatively low premiums:

1. Rising Medical Service Prices

In 2025, healthcare providers are charging more for services, driven by inflation, labor shortages, and rising supply chain expenses. Even with negotiated rates, plans must share these costs with members, often through higher deductibles or coinsurance.

2. Higher Utilization Rates

As more enrollees return to routine screenings, chronic disease management, and elective procedures that were deferred in prior years, overall usage of healthcare services has surged. This uptick results in higher collective costs for plans, which in turn are shared with you through copays and coinsurance.

3. Shifts Toward High-Deductible Plan Designs

To keep monthly premiums in check, many PSHB plans are shifting toward high-deductible structures. While these plans can seem attractive due to lower contributions, they expose you to higher financial responsibility when you actually need care.

4. Medicare Integration Requirements

If you are Medicare-eligible in 2025, certain rules require you to enroll in Medicare Part B to maintain your PSHB plan. This adds another monthly premium and affects how your out-of-pocket costs are split between Medicare and your PSHB plan. While some plans reduce deductibles for Medicare enrollees, others may not offer the same level of cost-sharing relief.

How Much Are You Really Paying?

If you’re enrolled in a Self Only plan with what seems like an affordable monthly contribution, you could still be paying significantly more over the course of the year due to:

• A $500 deductible

• $30 copays for specialists

• 20% coinsurance on lab tests or imaging

• Prescription drug copays that increase by tier

It’s not uncommon for total out-of-pocket spending to approach your plan’s annual maximum of $7,500 (Self Only) or $15,000 (Self Plus One or Self and Family), especially if you or a family member have ongoing care needs.

The Role of Prescription Drug Costs

In 2025, the PSHB program integrates prescription drug coverage for Medicare-eligible members through an Employer Group Waiver Plan (EGWP). While this includes protections such as a $2,000 annual out-of-pocket cap and a $35 insulin limit, you still need to account for:

• The plan deductible (up to $590 in 2025)

• Copayments for brand-name drugs

• Tiered pricing for generics, preferred brands, and specialty medications

If you are not Medicare-eligible, your drug coverage still comes with tiered pricing and no federally capped out-of-pocket maximum. That means if you or your family rely on high-cost medications, your total spending could be much higher than anticipated.

Understanding the Out-of-Pocket Maximum

Each PSHB plan includes an out-of-pocket maximum, which caps the amount you pay for covered services in a calendar year. For 2025, the caps are:

• $7,500 for Self Only

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

However, not all services count toward this maximum. Out-of-network services, non-covered treatments, and some prescription drug costs may fall outside this limit. That means you could still face unexpected bills, even after reaching your maximum in-network cost limit.

Medicare Coordination Doesn’t Always Mean Lower Costs

If you’re a Postal Service annuitant aged 65 or older, you’re likely required to enroll in Medicare Part B to maintain your PSHB coverage. Some plans offer:

• Lower deductibles for Medicare enrollees

• Waived or reduced coinsurance

• Premium reimbursements or incentives

But others may not provide meaningful cost savings, especially if your plan does not coordinate well with Medicare. Your out-of-pocket costs could actually increase due to the added burden of paying for Medicare Part B while still managing cost-sharing from your PSHB plan.

Comparing Plans Based on Total Costs

When evaluating PSHB plans during Open Season or after a Qualifying Life Event, don’t just compare premiums. Instead, consider:

• Deductibles: How much do you pay before coverage begins?

• Coinsurance and copays: What is your share for each service?

• Prescription tiers: How much will you pay for your medications?

• Network access: Are your providers in-network, or will you face higher out-of-network fees?

• Out-of-pocket maximums: Are they realistic for your expected healthcare usage?

Use available plan comparison tools and benefit brochures to estimate your annual costs based on expected usage, not just the lowest monthly contribution.

Tips to Control Out-of-Pocket Costs

You can take specific steps to reduce the impact of out-of-pocket spending:

• Choose generic drugs when possible to avoid brand-name copays

• Stay in-network for all services to reduce coinsurance rates

• Take advantage of preventive care to catch health issues early

• Use telehealth when appropriate to reduce specialist visit fees

• Coordinate Medicare enrollment carefully and understand your plan’s Medicare integration rules

Why Low Premiums May Cost You More Long-Term

Plans with the lowest monthly contributions often come with the highest deductibles and cost-sharing. While you might save upfront each month, a single illness or hospitalization could wipe out those savings quickly. If you or a family member have ongoing health needs, it’s often more cost-effective to pay a slightly higher premium for more comprehensive coverage.

This is especially important in 2025 as the cost of both medical services and prescription drugs continues to rise. Choosing a plan that protects you from unpredictable, high-cost events may be the smarter long-term financial decision.

Staying Informed During Open Season

The PSHB Open Season from November to December gives you the opportunity to reassess your health coverage. Review plan brochures thoroughly and consider using:

• OPM’s plan comparison tool

• PSHB Navigator Helpline

• Benefit summary charts

If you’re unsure how a specific plan might affect your out-of-pocket expenses in 2025, it’s a good idea to seek guidance.

Total Cost Awareness is the Real Strategy

Your monthly contribution is just one part of the equation. Rising out-of-pocket expenses in 2025 are largely driven by broader cost-sharing, not just higher premiums. To protect your budget, you need to consider all components of your health spending:

• Deductibles

• Coinsurance

• Copays

• Prescription drug costs

• Out-of-pocket maximums

Work with a licensed agent listed on this website to review your plan options in detail. The right choice isn’t always the cheapest upfront. It’s the one that aligns with your healthcare needs while protecting you from financial surprises down the road.