Key Takeaways

• Your PSHB contribution on paper is only part of what you eventually pay. Additional costs like deductibles, coinsurance, and prescription caps significantly impact your overall financial responsibility.

• Understanding your plan’s full cost structure before you need care is critical. Out-of-pocket maximums and Medicare integration can dramatically shift what you owe over time.

The Hidden Layers Behind What You Actually Pay

When you first enroll in a Postal Service Health Benefits (PSHB) plan, it might feel like your costs are straightforward. You see your monthly premium, you make your payroll contributions or annuitant payments, and it feels manageable. But the truth is, the real cost of your PSHB plan often reveals itself much later—when you actually start using it.

Your Monthly Contribution Isn’t the Whole Story

Whether you’re a current USPS employee or an annuitant, your share of the PSHB premium might look reasonable at first glance. But that monthly or biweekly deduction is only the entry point into a broader, layered cost structure.

While the federal government covers about 70% to 72% of the total premium, your share still ranges from hundreds to over a thousand dollars monthly, depending on your coverage tier (Self Only, Self Plus One, or Self and Family).

But after that contribution leaves your paycheck or retirement benefit, you’re still responsible for other costs, including:

• Annual deductibles

• Coinsurance percentages

• Copayments per service

• Prescription drug cost-sharing

• Emergency room and urgent care fees

Why Out-of-Pocket Costs Creep Up Slowly

Many enrollees underestimate how quickly the additional costs of healthcare services can pile up. That’s partly because these charges are spread out and not always obvious at the time of enrollment.

Each time you:

• Visit a specialist

• Have labs or diagnostic imaging done

• Need physical therapy

• Go to an emergency room

• Get a prescription filled

…you chip away at your budget in ways that go beyond your contribution.

It’s not until the bills start arriving or the Explanation of Benefits (EOB) summaries show up that you realize your “affordable” plan might be far more expensive in practice.

Deductibles Can Delay Coverage Activation

In many PSHB plans, the deductible operates like a financial barrier. For example, until you meet your in-network deductible (commonly $350 to $500 for low-deductible plans or up to $2,000 for high-deductible plans), you may pay full cost for certain services.

You might assume that your premium should cover every service, but that’s rarely the case. In fact, your plan may not pay a dime toward non-preventive care until you hit your deductible.

Key Facts About Deductibles in 2025

• Deductibles reset each calendar year (January 1)

• Separate deductibles may apply for in-network and out-of-network services

• Many plans waive deductibles for preventive services and screenings

Understanding your deductible is especially important if you anticipate needing:

• Surgery

• Frequent specialist care

• Diagnostic procedures

Because those first few thousand dollars could come directly out of your pocket.

Coinsurance: The Unpredictable Percentage

Once you hit your deductible, you often still owe a portion of your care costs. This is where coinsurance comes in. Unlike copayments, which are flat fees, coinsurance is a percentage.

Here’s the issue: A 20% coinsurance rate sounds manageable, but if you’re charged $5,000 for a procedure, your share is $1,000. And that’s assuming the provider is in-network. Out-of-network coinsurance often jumps to 40% or 50%, with higher deductibles to match.

Also, some services such as:

• Hospital stays

• Ambulance services

• Outpatient procedures

…trigger both coinsurance and separate facility fees, compounding your total cost.

Copayments Aren’t Always Small

Many assume copayments are nominal—$20 here, $30 there. But under PSHB plans, copays can reach $60 for specialists, $75 for urgent care, and up to $150 for emergency room visits.

Add prescriptions into the mix:

• Preferred brand-name drugs could cost you $50 to $100 per fill

• Specialty medications may require coinsurance instead of a flat copay

• Quantity limits or step therapy rules might force you into higher-cost alternatives

Even if you rarely see the doctor, one emergency room trip or a recurring medication can turn a low-premium plan into a high-expense reality.

The Real Importance of Out-of-Pocket Maximums

Out-of-pocket maximums exist to cap how much you’ll pay in a year, but most enrollees overlook them because they assume they won’t come close to reaching them.

For 2025, most PSHB plans set:

• Self Only in-network max: $7,500

• Family in-network max: $15,000

That’s your financial ceiling for the year, but here’s what many forget:

• Only in-network spending usually counts toward these limits

• Premiums don’t count toward the max

• Out-of-network and non-covered services have separate (often uncapped) limits

You won’t see the value of this protection until something major happens—a surgery, chronic illness, or hospitalization. Then, those limits become crucial in avoiding long-term financial strain.

How Medicare Shifts the Balance Later

If you’re a PSHB annuitant and approaching age 65, the cost structure changes. In 2025, certain Medicare-eligible annuitants are required to enroll in Medicare Part B to keep their PSHB coverage. Doing so shifts some costs from your PSHB plan to Medicare.

While this may increase your monthly healthcare expenses due to the Part B premium (which is $185 in 2025), it often results in:

• Lower copayments

• Waived deductibles

• Reduced coinsurance

• Better coverage for outpatient services

The impact is especially noticeable in plans that coordinate benefits seamlessly with Medicare. Those that do often cover most, if not all, of what Medicare doesn’t pay.

It’s worth reevaluating your PSHB plan as you approach Medicare eligibility. Your current plan may be cost-effective today but less so once Medicare becomes part of the equation.

Annual Enrollment Decisions Can Lock in High Costs

Each fall, from November to December, Open Season gives you the chance to reassess your PSHB plan. But many skip this opportunity, assuming last year’s plan still fits.

That can be a costly mistake. Plans often change each year:

• Deductibles may rise

• Prescription tiers shift

• Specialist copays increase

• Out-of-pocket caps are adjusted

By not reviewing these changes, you could be unknowingly locking yourself into higher costs the following year.

Make a habit of reviewing your plan’s Annual Notice of Change (ANOC) and Summary of Benefits before Open Season. It’s also the best time to compare how well your plan integrates with Medicare if you’re nearing eligibility.

Why Plan Design Matters More Than Sticker Price

The natural instinct is to choose a plan based on premium alone. Lower premiums seem like instant savings. But if your deductible is high, your coinsurance is steep, and your prescriptions aren’t well covered, you may pay more in the long run.

Instead, consider total cost of care:

• Premium + expected copays + prescription costs + coinsurance + deductible = actual cost

Think beyond the monthly premium. Look at the structure behind the plan. Ask yourself:

• Will I need specialist visits?

• Do I take regular medications?

• Is my doctor in-network?

• What happens if I end up in the hospital?

Total cost transparency should drive your selection, not just the face-value contribution.

Complex Plans Require Clear Advice

With more than a hundred PSHB plan options and varying rules based on Medicare enrollment, coverage tiers, and service types, it’s not always easy to understand what you’re truly paying.

A licensed agent listed on this website can help you:

• Estimate your annual costs across different scenarios

• Compare plan cost structures beyond premiums

• Clarify how your plan works with Medicare

• Identify options that better fit your needs in retirement

Even if you think your current plan works, a yearly review with a professional can reveal unexpected gaps or savings.

The True Cost of PSHB Plans Requires a Bigger Lens

What you contribute each month is just the starting point. The real cost of your Postal Service Health Benefits plan shows up in how you actually use it. And if you ignore the hidden pieces—like deductibles, coinsurance, and coordination with Medicare—you might end up paying far more than anticipated.

Don’t wait until the bills come in to realize your plan is too expensive. Use Open Season to explore all aspects of your current plan and consider talking with a licensed agent listed on this website to get a clearer, more accurate picture of what you’ll actually pay.