Key Takeaways

• The deductible is one of the largest out-of-pocket costs in your Postal Service Health Benefits (PSHB) plan, yet it often feels invisible until you need care.

• Understanding how and when your deductible applies can help you plan for medical expenses and avoid costly surprises at the beginning of the year.

What the Deductible Actually Means for You

In your PSHB plan, the deductible is the amount you pay out of pocket before your plan begins to share the cost of covered healthcare services. In 2025, this amount can range from $350 to $2,000 depending on whether you have a low- or high-deductible plan. But what matters more than the number on paper is how that amount impacts your healthcare experience.

Your deductible resets every January. That means every calendar year, your first healthcare expenses—lab tests, imaging, outpatient procedures, and even some specialist visits—may not be covered by your plan until you’ve paid your full deductible.

It’s Not Just a Number. It’s a Timing Issue

Let’s say your plan has a $500 deductible. It may not sound like much compared to your total yearly costs, but consider this: you’re likely to meet that deductible in the first few months of the year, especially if you experience a medical event early on.

This creates a financial crunch because you’re paying full price for services when you may least expect it. The start of the year is also when other expenses like holiday bills or tax prep fees pile up. For many enrollees, that $500 or $1,500 hits harder than anticipated.

When the Deductible Applies (and When It Doesn’t)

Not every service you use is subject to the deductible. Most preventive care, such as annual physicals, immunizations, and screenings, is covered with no cost to you, even before meeting your deductible.

However, for other common services, the deductible kicks in:

• Diagnostic blood tests or X-rays

• Non-preventive specialist visits

• Outpatient surgeries

• Hospital stays

• Emergency room services

• Durable medical equipment

Once you’ve paid enough to satisfy your deductible, your plan starts to cover a portion of the costs, usually through coinsurance or copayments. But until then, you are fully responsible for eligible expenses.

One Deductible or Two? Know Your Enrollment Type

In PSHB, there’s a difference between Self Only and Self Plus One or Self & Family coverage. If you’re enrolled in a family-level plan, you likely face both an individual deductible and a family deductible:

• Individual Deductible: Applies to each person covered.

• Family Deductible: Kicks in when combined family expenses hit the family threshold, which is often double the individual deductible.

The coordination between these two deductibles can affect who pays what and when. For example, if your child meets their individual deductible but you haven’t met yours, your own expenses may still be out of pocket until you hit your threshold.

How the Deductible Interacts with Other Costs

Once you meet your deductible, your plan typically switches to a cost-sharing model:

• Coinsurance: You pay a percentage of costs (e.g., 20%) for services.

• Copayments: Flat fees for certain visits or medications.

• Out-of-pocket maximum: A cap on how much you have to spend in a year, including the deductible.

That means your deductible is just the first layer of financial responsibility. It’s followed by months where you’re still paying coinsurance or copayments until your out-of-pocket maximum is met.

For High-Deductible Plans: The Hit Feels Bigger

High-deductible plans (HDHPs) come with lower monthly premiums but require you to pay more upfront when you receive care. In PSHB, these plans may have deductibles ranging from $1,500 to $2,000 or more.

These plans are paired with Health Savings Accounts (HSAs), which can help offset some of those early costs—but only if you’ve contributed enough to your HSA in advance. For Postal Service employees and annuitants who delay contributions or deplete their HSA early, the deductible can create a heavier burden.

The Timing of Care Matters

Because deductibles reset every January, the time of year you receive care affects how much you pay out of pocket. Here’s how:

• Early-Year Medical Needs: Any hospital stays, ER visits, or procedures in January through March are likely to be paid mostly out of pocket unless you met your deductible unusually early.

• Late-Year Treatment: If you’ve already satisfied your deductible earlier in the year, services in October, November, and December are much cheaper out of pocket.

This timing quirk makes some enrollees delay care until later in the year, but that can be risky if you’re dealing with a condition that needs prompt treatment.

Deductibles and Medicare Integration

If you’re a Medicare-eligible annuitant and enrolled in Medicare Part B, some PSHB plans offer significant cost-sharing relief. Your plan may:

• Waive the deductible entirely

• Lower or eliminate coinsurance

• Reduce copayments for services

However, these benefits only apply if you’re enrolled in both Medicare and a PSHB plan that integrates with it. If you opt out of Medicare Part B, you may be on the hook for the full deductible and related costs.

Understanding this interplay is essential as you decide whether to enroll in Medicare once eligible. The deductible may become far less painful if the plan waives it based on Medicare coordination.

Budgeting for the Deductible in 2025

The best way to avoid financial strain from the deductible is to plan for it. Whether your plan has a $500 or $1,500 deductible, it helps to:

• Set aside funds in advance, such as through an HSA or FSA

• Know which services count toward the deductible

• Track how much you’ve already paid toward it during the year

In 2025, the carryover limit for health FSAs is $660, and the HSA contribution limit is $4,300 for individuals and $8,550 for families. Using these accounts smartly can turn a deductible from a surprise expense into a manageable one.

Avoiding Surprises at the Pharmacy or Clinic

Another common source of confusion comes from prescription drugs and outpatient visits. Some PSHB plans apply the deductible to certain tiers of prescription drugs or specialist visits.

You may think a drug is covered with a flat copay, only to find out that it’s subject to the deductible first. Or you may expect to pay $30 for a specialist, only to get a bill for the full price if the deductible hasn’t been met yet.

To avoid this:

• Review your plan brochure or summary of benefits

• Look at the plan’s tier structure for medications

• Confirm with the provider’s office whether your visit will be subject to the deductible

What Happens If You Don’t Hit Your Deductible?

Not every enrollee meets their deductible every year. If you’re generally healthy and don’t use many services, you may not reach the full amount.

That’s why it’s important to understand the deductible as a potential cost. Just because you don’t reach it this year doesn’t mean you won’t hit it early next year.

Additionally, preventive care remains covered regardless of deductible status, so be sure to take full advantage of that. Skipping preventive services just to avoid triggering deductible charges is counterproductive.

Why the Deductible Feels Worse for Annuitants

If you’re a Postal Service annuitant, the deductible can feel more significant for two reasons:

1. You’re typically on a fixed income.

2. Your premium contributions tend to be higher than active employees.

That means you’re already paying more out of pocket monthly, and the deductible adds another layer of cost early in the year. If you didn’t plan for it, the impact can be jarring.

That’s why annuitants should strongly consider:

• Choosing plans that coordinate well with Medicare Part B

• Using HSA or FSA dollars when available

• Reviewing PSHB plan options each November to see if a lower-deductible plan may suit your needs

Making Your Deductible Work for You

Rather than viewing the deductible as just a setback, you can think of it as a budgeting checkpoint. You’re likely to face this cost at least once each year. Planning around it means:

• Less financial shock

• Smarter use of healthcare services

• More informed plan selection during Open Season

Track your deductible status throughout the year using your plan’s member portal. Knowing how close you are to hitting your deductible can help you decide when to schedule elective procedures or screenings.

Be Proactive About Healthcare Costs

Deductibles can’t be avoided, but they can be managed. Whether yours is $500 or $1,500, knowing how it functions within your PSHB plan is critical to your financial well-being.

In 2025, with rising healthcare costs and shifting plan structures, being proactive is your best defense. Look at your coverage, plan for timing, use your savings accounts, and ask questions.

If you’re unsure about which plan offers the right balance of deductible, premiums, and cost-sharing for your situation, get in touch with a licensed agent listed on this website for personalized guidance.