Key Takeaways

• Coinsurance under PSHB plans can significantly increase your out-of-pocket costs after a major health event—even when you have insurance.

• Understanding how coinsurance works alongside your deductible and out-of-pocket maximum can help you plan financially and avoid unexpected bills.

What Coinsurance Really Means Under PSHB

When you’re covered by a Postal Service Health Benefits (PSHB) plan, you’re not just responsible for monthly premiums. Depending on the plan you choose, you may also share the cost of services through copayments, deductibles, and coinsurance. Among these, coinsurance is the one most likely to surprise you—especially after major medical events.

Coinsurance is not a flat fee. It’s a percentage of the costs you must pay after you’ve met your deductible. For example, if your plan has a 20% coinsurance rate, and your hospital stay costs $10,000, you could owe $2,000 on top of whatever deductible you already met. For retirees and workers alike, this is where financial strain often begins.

How Coinsurance Differs From Copayments and Deductibles

To understand coinsurance clearly, you need to know how it differs from other cost-sharing terms:

• Deductible: The fixed amount you must pay each year before your plan starts sharing the costs.

• Copayment: A fixed dollar amount (like $30 or $50) for specific services like doctor visits or prescriptions.

• Coinsurance: A percentage of costs (typically 10%-30% for in-network services under PSHB) that kicks in once you meet your deductible.

Unlike copayments, coinsurance does not remain constant—it scales with the cost of your care. That makes it especially dangerous for high-cost services like surgery, hospitalization, or specialty treatments.

The Role of Your Out-of-Pocket Maximum

Fortunately, coinsurance doesn’t last forever. Once you hit your annual out-of-pocket maximum, your PSHB plan covers 100% of covered in-network services for the rest of the year. But reaching that cap can still be financially painful.

For 2025, the in-network out-of-pocket limits under PSHB plans can range up to $7,500 for Self Only coverage and $15,000 for Self Plus One or Self and Family. Coinsurance is often what drives you to this limit quickly, especially after a significant health episode.

You should factor these caps into your budgeting, particularly if you have a chronic condition or anticipate any surgeries.

When Coinsurance Hits the Hardest

You’re most likely to feel the impact of coinsurance after major services such as:

• Inpatient hospital stays

• Outpatient surgery

• Emergency room visits

• Advanced imaging (MRI, CT scans)

• Durable medical equipment (wheelchairs, CPAP machines)

• Home health care

These services can cost thousands of dollars. Even with an in-network rate and a moderate coinsurance percentage, your share of the bill can become overwhelming.

In-Network vs. Out-of-Network Matters—A Lot

PSHB plans distinguish sharply between in-network and out-of-network services. While in-network coinsurance rates typically range from 10% to 30%, out-of-network care can cost you much more—often 40% to 50%, with no cap.

Worse still, out-of-network charges may not count toward your out-of-pocket maximum. That means even after you hit your in-network limit, out-of-network costs could keep piling up.

You should always confirm whether a provider is in-network before receiving care. This is particularly critical for specialist referrals, surgeries, or lab work.

Timing Makes a Difference in Cost Exposure

Coinsurance liability depends on when you seek care during the calendar year. If you’ve already met your deductible and are close to your out-of-pocket max, your financial responsibility may be low.

But if it’s January or early in the year and you haven’t yet met your deductible, you’re exposed to both the deductible and coinsurance—effectively stacking your financial liability.

This is why many PSHB retirees and workers schedule elective procedures later in the year, once their deductible has been satisfied.

How Medicare Affects Your Coinsurance Under PSHB

If you’re a retiree enrolled in both Medicare Part B and a PSHB plan, your coinsurance may be significantly reduced—or even waived altogether—depending on the plan.

In 2025, many PSHB plans coordinate with Medicare in a way that:

• Waives the plan deductible

• Eliminates or lowers coinsurance for covered services

• Offers enhanced drug coverage through Medicare Part D integration

That said, these benefits only apply if you’re properly enrolled in Medicare Part B. If you decline Part B and rely solely on your PSHB plan, your cost-sharing responsibilities—including coinsurance—will likely be higher.

What You Can Do to Prepare Financially

Understanding coinsurance is just the first step. You also need to plan for it. Here are smart strategies to consider:

• Set aside funds in an HSA or FSA: If you’re enrolled in a high-deductible PSHB plan, consider contributing to a Health Savings Account (HSA). For 2025, the contribution limits are $4,300 for individuals and $8,550 for families, with an extra $1,000 if you’re over 55.

• Track your deductible status: Many PSHB plan portals allow you to monitor how much of your deductible and out-of-pocket max you’ve met.

• Confirm provider network status: Always verify that any new provider, lab, or facility is in-network.

• Get pre-authorizations when required: Some services won’t be covered—or will be covered at a lower rate—if you skip prior approval.

Coinsurance Can Snowball With Chronic Care

If you’re managing a chronic illness, your exposure to coinsurance increases dramatically. Frequent imaging, lab work, and specialist visits quickly add up.

Many PSHB plans offer case management or care coordination services for chronic conditions. These programs can help reduce your coinsurance liability by keeping care within the network, managing prescriptions effectively, and minimizing unnecessary tests.

You should consider enrolling in any disease management programs your plan offers, particularly if you have conditions like diabetes, COPD, heart failure, or arthritis.

Annual Plan Review: The Smartest Way to Limit Coinsurance

Coinsurance amounts are not uniform across all PSHB plans. Some plans have higher premiums but lower coinsurance rates and deductibles. Others trade lower premiums for higher out-of-pocket costs.

Each year, during the PSHB Open Season (from November to December), you have the opportunity to switch plans. Take advantage of this window to:

• Compare coinsurance rates

• Review out-of-pocket maximums

• Evaluate how your plan coordinates with Medicare if applicable

By choosing a plan that better fits your expected usage, you can reduce your exposure to coinsurance in the year ahead.

Why Coinsurance Often Goes Unnoticed—Until It’s Too Late

Most people focus on monthly premiums when selecting a health plan. But coinsurance tends to stay out of view—until a big bill arrives.

Unfortunately, coinsurance doesn’t show up in a predictable way. It’s not tied to one service but to every eligible service after the deductible is met. If you require surgery, rehabilitation, or multiple specialist visits, your coinsurance can escalate quickly.

Being proactive and reviewing your plan details in advance is your best defense.

How to Take Control of Your Health Costs

You don’t need to be caught off guard by coinsurance. By understanding how it works and taking strategic actions throughout the year, you can reduce both your stress and your bills.

• Study your plan’s Summary of Benefits

• Monitor your claims and cost-sharing status online

• Prioritize in-network care

• Coordinate with Medicare Part B if you’re eligible

• Reevaluate your plan every Open Season

Being informed is the first step. Acting on that information is how you protect your wallet.

The Bottom Line: Coinsurance Is Manageable—If You Know the Triggers

Coinsurance under PSHB plans can be a quiet drain on your finances if you’re not paying attention. It isn’t inherently bad—it’s just poorly understood by many enrollees until a health event exposes it. Now that you’re equipped with the knowledge, take the next step and get personalized help.

Speak with a licensed agent listed on this website to walk through your plan options and make sure you’re in the best position to limit coinsurance exposure.