Key Takeaways

• Coinsurance can significantly impact your healthcare bills, especially if you’re unaware of your plan’s specifics.

• Understanding how your PSHB plan calculates coinsurance can help you avoid unexpected expenses and manage your healthcare budget effectively.

The Hidden Truth About Coinsurance

As a USPS employee or retiree, you’ve likely navigated the transition to the Postal Service Health Benefits (PSHB) program in 2025. You’ve seen terms like copays, deductibles, and coinsurance repeatedly, but coinsurance often remains the most confusing—and costly—aspect. Let’s face it; coinsurance isn’t usually a concern until you receive an unexpected medical bill. But why wait for that surprise?

Here’s what you probably didn’t realize about coinsurance—and what you should know to prevent future sticker shock.

Fact #1: Coinsurance Isn’t the Same as a Copay

Many USPS employees and retirees use the terms “copay” and “coinsurance” interchangeably, but they’re quite different. Understanding this difference could save you from an unwanted financial surprise.

• Copay: This is a fixed amount you pay every time you receive certain medical services—like a $30 fee for a specialist visit or a $20 charge at your primary care doctor’s office. Once you pay the copay, your plan usually covers the rest.

• Coinsurance: Unlike copays, coinsurance is a percentage of the total cost of a medical service you must pay after meeting your deductible. For example, if your coinsurance rate is 20% and your medical bill totals $1,000 after the deductible, you’re responsible for $200.

Because coinsurance is percentage-based, your share of the cost rises with the total expense of your medical care, which can lead to significantly larger bills than the predictable copay.

Why Understanding This Matters

Knowing whether your PSHB plan uses coinsurance, copays, or a mix of both helps you anticipate and budget for medical expenses. Check your plan details carefully during the November–December Open Season to know exactly what you’re signing up for.

Fact #2: Coinsurance Kicks in After Your Deductible is Met

A critical point many USPS employees and retirees overlook is when coinsurance actually begins. Coinsurance doesn’t kick in until you’ve paid your full deductible for the year.

Let’s break this down:

• Deductible: This is the fixed amount you must pay for healthcare services each year before your insurance begins covering its portion. Deductibles can range significantly, commonly between $350 to $2,000 annually, depending on your PSHB plan choice.

• Coinsurance Begins: After you’ve met your deductible, your coinsurance responsibilities begin. From that point forward, you’re responsible for a percentage of medical costs until you hit your annual out-of-pocket maximum.

Why Timing Matters

Understanding your deductible and coinsurance timelines ensures you’re prepared for higher medical bills early in the calendar year. Always track your deductible payments closely, so you know when coinsurance charges will start to impact your healthcare costs.

Fact #3: Coinsurance Rates Vary Based on Network Use

Another surprise many USPS employees face is the variability in coinsurance rates depending on whether they receive care from in-network or out-of-network providers.

Here’s what to consider:

• In-Network Providers: Typically offer lower coinsurance rates, often ranging from 10% to 30%. These providers have contracts with your insurance company, meaning you’ll generally pay less.

• Out-of-Network Providers: Usually come with higher coinsurance rates, commonly between 40% and 50%. Receiving care from these providers can significantly increase your out-of-pocket expenses.

Why Network Matters

To minimize your coinsurance costs, verify that your preferred healthcare providers and specialists are in your PSHB plan’s network. Double-check network coverage during Open Season and periodically throughout the year, as provider networks can change.

Fact #4: Your Out-of-Pocket Maximum Protects You from Endless Coinsurance Charges

While coinsurance can lead to large medical bills, your PSHB plan includes an essential financial safety net: the annual out-of-pocket maximum.

Here’s how it works:

• Out-of-Pocket Maximum: This is the absolute maximum you’ll pay each year for covered healthcare services. For 2025, PSHB plans generally set this limit around $7,500 for Self Only coverage and up to $15,000 for Self Plus One and Self and Family coverages. Once you hit this cap, your insurance covers 100% of eligible expenses for the remainder of the year.

• Coinsurance and Your Maximum: Coinsurance payments count toward this out-of-pocket maximum. After reaching this cap, you’ll no longer owe coinsurance or copayments for covered services.

Why the Maximum is Crucial

Knowing your out-of-pocket maximum helps you budget appropriately for major medical events. Regularly tracking your healthcare expenses throughout the year ensures you know exactly when you’re nearing this critical financial limit.

Tips to Manage Coinsurance Costs Wisely

Now that you understand these lesser-known aspects of coinsurance, let’s cover some practical tips to manage these costs effectively:

• Regularly Review Your PSHB Coverage: During the November–December Open Season, reassess your health plan carefully. Look specifically at coinsurance percentages, deductible levels, and your out-of-pocket maximum.

• Stay In-Network: Always prioritize in-network providers. If you must go out-of-network, check with your insurance first to understand your coinsurance liability clearly.

• Maintain an Emergency Fund: Set aside funds specifically for potential coinsurance expenses. This financial cushion can ease the stress of unexpected medical bills.

• Track Your Spending: Keep careful records of healthcare expenses, particularly as they apply to your deductible and out-of-pocket maximum. Many plans offer online tracking tools to simplify this.

What to Do if You Get a Higher-than-Expected Bill

If you find yourself facing a surprisingly high coinsurance charge:

• Verify Accuracy: Always confirm the bill’s accuracy with both your provider and your insurance company. Mistakes happen, and you could save hundreds or even thousands of dollars by catching errors early.

• Negotiate Payment Plans: If a large coinsurance bill is accurate but challenging to pay immediately, contact your healthcare provider directly. Most providers are willing to establish payment plans to spread out costs.

• Understand Appeals Process: If you believe your insurance plan incorrectly handled a claim, don’t hesitate to use your right to appeal. The PSHB program offers an appeal process, allowing you to dispute coverage decisions or billing errors.

Taking Charge of Your Coinsurance Costs

Navigating coinsurance doesn’t have to be confusing or intimidating. By clearly understanding your responsibilities, you can proactively manage your healthcare expenses and prevent unpleasant billing surprises. Coinsurance will always be part of your PSHB plan, but knowing how to manage it effectively makes all the difference.

Don’t hesitate to reach out to a licensed agent listed on this website who can offer professional guidance tailored to your situation.