Key Takeaways

• Coinsurance is a percentage-based cost-sharing obligation that applies after you meet your deductible—and it can quickly escalate your out-of-pocket expenses, especially during serious or prolonged medical care.

• Most PSHB enrollees underestimate coinsurance until they receive their first large bill. Knowing how your plan calculates coinsurance and where it applies is critical to avoid budget shocks.

What Coinsurance Means Under PSHB in 2025

Coinsurance under the Postal Service Health Benefits (PSHB) Program is a form of cost-sharing where you, the enrollee, are responsible for a fixed percentage of the covered healthcare costs after your annual deductible has been met. This cost-sharing structure is separate from copayments, which are flat fees.

In 2025, PSHB plans continue to offer different coinsurance levels depending on the type of service and whether you stay within your plan’s network. The typical coinsurance rates for in-network services range from 10% to 30%, while out-of-network services can go as high as 40% to 50%.

This percentage might seem modest at first glance. But once it applies to something like hospitalization, advanced imaging, or surgery, it can snowball into a hefty financial responsibility.

When Coinsurance Kicks In

Coinsurance doesn’t apply immediately. It comes into effect after you’ve met your annual deductible. Here’s a simplified sequence of what happens:

1. You pay the full cost of care until you hit your deductible ($350–$2,000+ depending on plan type).

2. Coinsurance begins: For most services, you’re now responsible for a percentage of the remaining costs.

3. You continue paying coinsurance until you hit your plan’s out-of-pocket maximum (as high as $7,500 for Self Only, $15,000 for Self Plus One or Family).

It’s a gradual progression, but one that can accelerate with a single hospital stay or series of treatments.

Why It Often Gets Overlooked

Coinsurance tends to be overshadowed by more visible numbers like monthly premiums or annual deductibles. But it’s the most volatile cost because it depends on how much care you need and what it costs.

Here’s why many PSHB enrollees overlook coinsurance:

• It’s percentage-based, so it doesn’t register as a concrete amount.

• It’s conditional, kicking in only after you’ve met your deductible.

• It’s cumulative, meaning it adds up fast, especially for complex care.

• It’s inconsistent, varying by service type, provider, and location.

You might breeze through a year without paying much in coinsurance—or you might face thousands in bills from one unexpected event.

Key Services Where Coinsurance Applies

Coinsurance doesn’t apply equally to all services. Under PSHB plans in 2025, you’re more likely to encounter coinsurance for:

• Specialist visits (especially if out-of-network)

• Outpatient surgery

• Hospital admissions

• Skilled nursing facilities

• Diagnostic tests and imaging (like MRIs and CT scans)

• Durable medical equipment (like wheelchairs or CPAP machines)

• Certain prescription drugs (especially specialty tiers)

Each of these services can carry steep base costs—so your coinsurance share, even if it’s just 20%, can quickly add up.

What Changes in 2025 Matter Most

If you’re still thinking of PSHB like the FEHB plans of the past, it’s important to note key distinctions in 2025:

• Integration with medicare is mandatory for many annuitants. If you’re enrolled in Medicare Part B, your coinsurance under PSHB may be reduced, waived, or absorbed by your secondary plan.

• Prescription coverage is now fully integrated with Medicare Part D through EGWP plans. You may face coinsurance on specialty drugs until you hit the new $2,000 cap on out-of-pocket drug spending.

• Plan structures differ more significantly than in prior years. Some PSHB plans offer lower coinsurance in exchange for higher premiums and vice versa.

These changes mean your coinsurance exposure in 2025 is not just about percentages—it’s also about how your other coverages (like Medicare) interact with your PSHB plan.

Coinsurance vs. Copayments: Know the Difference

Many PSHB members confuse coinsurance with copayments, but they function very differently:

• Copayment is a flat fee (e.g., $30 per doctor visit).

• Coinsurance is a percentage of the total charge (e.g., 20% of $1,000 = $200).

While copayments are predictable, coinsurance is inherently uncertain. The more expensive the service, the more you pay—without an upfront understanding of the final bill.

Out-of-Pocket Maximums: Your Safety Net, But Not Your Shield

In 2025, PSHB plans continue to place an annual cap on your out-of-pocket spending. Once you hit this limit—often $7,500 for Self Only plans or $15,000 for Self Plus One and Self & Family—you no longer owe coinsurance for covered services.

However, there are a few caveats:

• Not all services count toward the limit, especially if out-of-network.

• You still pay premiums, even after reaching your out-of-pocket maximum.

• Certain excluded expenses (like balance billing) might not count toward this limit.

Your out-of-pocket max provides a ceiling, but you can still hit that ceiling faster than expected—especially if hospitalized, diagnosed with a chronic illness, or require high-cost medications.

What You Can Do to Prepare

Understanding coinsurance is about preparation, not panic. Here’s what you can do right now:

• Review your plan’s Summary of Benefits to see coinsurance rates for key services.

• Compare in-network vs. out-of-network rates, as out-of-network coinsurance is often higher.

• Consider how Medicare enrollment may help, especially if you’re turning 65 or are already eligible.

• Track your care usage throughout the year using your insurer’s member portal.

• Budget for coinsurance, especially if you have ongoing health needs or anticipate procedures.

The more you anticipate your exposure, the better you can manage both care and cost.

Medicare and Coinsurance: A Helpful Ally

For Medicare-eligible PSHB enrollees, enrolling in Part B can significantly reduce your coinsurance burden in 2025. Most PSHB plans coordinate with Medicare to:

• Waive deductibles and coinsurance for covered services

• Reimburse some or all of your Medicare Part B premium

• Reduce copayments and drug costs through EGWP Part D integration

This coordination is not automatic—you must enroll in both Medicare and a PSHB plan that offers these benefits. But for eligible retirees and annuitants, it’s often worth it.

Timing Matters: Coinsurance Costs Add Up Fast

Coinsurance is not a monthly expense—it’s event-driven. You might go months with little or no coinsurance, then face thousands in charges after a single major event.

That’s why your coinsurance exposure is best evaluated over a 12-month timeline, not month-to-month. Annual planning—not just reactive budgeting—can make the difference between a manageable healthcare year and a financially stressful one.

Avoid Surprises by Reading the Fine Print

Coinsurance can hide in plain sight. To avoid unwanted surprises, be sure to:

• Review the Plan Brochure: Every PSHB plan publishes detailed coinsurance tables.

• Look for service-specific coinsurance: Some services may have tiered or unique rates.

• Verify provider network status before care to avoid out-of-network charges.

• Check for pre-authorization rules: Services without prior approval may not be covered—or may be covered at a higher coinsurance rate.

The clearer you are on how your plan works in 2025, the less likely you are to be caught off guard when the bills arrive.

Think Beyond Premiums—Think Total Cost of Care

When comparing PSHB plans during Open Season or after a qualifying life event, it’s tempting to choose based solely on premiums. But in 2025, the smarter strategy is to look at total cost of care, which includes:

• Monthly premium

• Deductibles

• Coinsurance

• Copayments

• Prescription drug costs

• Out-of-pocket maximums

A plan with lower premiums but higher coinsurance might end up costing more in a year where you need significant care.

Protecting Your Budget Starts with Understanding Your Plan

It’s easy to overlook coinsurance until the charges start appearing. But once you understand how and when it applies, you can make smarter choices about care, budgeting, and plan selection.

Use your PSHB benefits to their fullest by:

• Choosing in-network providers whenever possible

• Planning ahead for major services

• Coordinating with Medicare Part B if eligible

• Reading your plan documents thoroughly

Need help understanding your coinsurance costs or choosing a PSHB plan that fits your health needs and financial goals? Speak with a licensed agent listed on this website for professional guidance tailored to your situation.