Key Takeaways

• Even a seemingly small 20% coinsurance rate under PSHB can result in large out-of-pocket costs, especially for high-cost services like hospitalization or surgery.

• Understanding how coinsurance applies after deductibles and in-network vs. out-of-network care is critical for protecting your finances.

The Real Meaning Behind 20% Coinsurance

When you see “20% coinsurance” in your PSHB plan, it might not sound too alarming. But in reality, this percentage can lead to unexpectedly high costs depending on the service. Unlike a flat copay, coinsurance means you’re responsible for a percentage of the total allowed cost—not a capped fee.

So, if a service costs $4,000, your 20% coinsurance means you’re paying $800 out of pocket. And if the service isn’t something you planned for—like an emergency room visit, a diagnostic scan, or outpatient surgery—this can disrupt your monthly budget or even derail your long-term financial plans.

Coinsurance Kicks In After Your Deductible

It’s important to understand that coinsurance only applies after you meet your annual deductible. In 2025, most PSHB plans have:

• In-network deductibles between $350 and $1,500

• Higher deductibles for out-of-network care (often $1,000 to $3,000)

This means if you haven’t hit your deductible yet, you pay the full cost of the service—not just 20%. Once your deductible is met, the coinsurance kicks in. That’s when you start paying 20% (or another percentage depending on your plan).

The Trouble With Big-Ticket Items

Certain medical services almost always come with hefty price tags:

• Imaging (MRIs, CT scans): $1,000–$3,000

• Hospital admissions: $10,000 and up

• Outpatient procedures: $2,000–$8,000

• Emergency room visits: $1,500–$3,000

If your PSHB plan requires 20% coinsurance, even just one of these services can leave you with several hundred to several thousand dollars to pay.

Coinsurance doesn’t care whether it’s your first claim of the year or your tenth. Until you hit your annual out-of-pocket maximum, that 20% keeps applying.

In-Network vs. Out-of-Network: A Huge Difference

Another factor that can drastically change your out-of-pocket costs is whether your provider is in-network or out-of-network. PSHB plans offer lower coinsurance and deductibles for in-network care. For 2025:

• In-network coinsurance: Often 10% to 30%

• Out-of-network coinsurance: Can range from 40% to 50%

That same $4,000 procedure? If your provider is out-of-network and you’re on the hook for 50%, you’re suddenly facing a $2,000 bill. Worse, out-of-network services often don’t count toward your in-network out-of-pocket maximum.

Annual Out-of-Pocket Maximums: Your Safety Net (Sort Of)

Most PSHB plans have in-network annual out-of-pocket limits:

• Self Only: $7,500

• Self Plus One/Family: $15,000

Once you hit these limits, your plan should cover 100% of eligible in-network costs for the rest of the year. However, this safety net doesn’t always help with:

• Out-of-network services

• Non-covered services

• Prescription drugs (unless they count toward a separate drug cap)

And reaching that $7,500 or $15,000 limit can still mean you’ve paid thousands more than you expected.

When You Need Multiple Services

Coinsurance becomes even more painful when services pile up. Suppose you’re recovering from surgery:

• Hospital stay: 20% of $10,000 = $2,000

• Anesthesia: 20% of $2,000 = $400

• Post-op physical therapy: 20% of $1,500 = $300

• Follow-up imaging: 20% of $2,500 = $500

That’s $3,200 out of pocket—even if you’ve already met your deductible. These amounts are realistic under 2025 pricing, and they can arrive all at once.

Not All Services Are Fully Covered

Coinsurance doesn’t mean everything is covered. Some services might be partially covered or excluded entirely. Common issues include:

• Non-formulary medications

• Out-of-network lab testing

• Specialty treatments without prior authorization

• Routine services outside the approved frequency (e.g., more than one preventive screening in a year)

If a service isn’t covered, you could owe 100% of the cost, not just your coinsurance share.

Medicare Integration Can Help—If You’re Enrolled in Part B

If you’re a Medicare-eligible postal retiree and you’ve enrolled in Medicare Part B, your PSHB plan may offer major relief. Many plans coordinate with Medicare so that:

• Medicare pays first

• PSHB pays secondary

• You owe little or nothing for services covered by both

Some PSHB plans even waive deductibles or coinsurance for enrollees who have Medicare Part B. But this benefit only applies if you’ve officially enrolled. If you opt out of Part B, you could lose those advantages and face the full cost-sharing burden of PSHB.

Don’t Forget Prescription Drug Coinsurance

PSHB plans include Medicare Part D drug coverage through an integrated benefit. While there’s now a $2,000 out-of-pocket cap for covered prescription drugs, coinsurance still applies:

• You may pay 25% to 33% of drug costs during certain phases

• The cap resets every calendar year

• Non-covered drugs and certain restrictions still apply

Even with the cap in place, you might hit it faster than you expect—especially if you take specialty drugs or have multiple chronic conditions.

The Timing of Your Expenses Matters

Coinsurance feels less daunting when costs are spread out. But medical bills rarely arrive that way. In many cases, you get hit with several charges close together, such as:

• Diagnostic testing and specialist visits in the same week

• Multiple prescriptions filled in a short time

• Hospitalization followed by physical therapy and rehab

This cluster effect can max out your budget long before you reach your plan’s out-of-pocket limit. And for retirees on a fixed income, that makes financial planning even more critical.

How to Prepare and Protect Yourself

To avoid coinsurance sticker shock, you can take a few practical steps:

• Review your PSHB plan brochure carefully each November during Open Season

• Stay in-network whenever possible to get lower coinsurance rates

• Ask for cost estimates before scheduling non-urgent procedures

• Request pre-authorization to make sure services are covered

• Enroll in Medicare Part B if you’re eligible and want to reduce PSHB cost sharing

• Track your healthcare spending throughout the year to know how close you are to your deductible and out-of-pocket maximums

Understanding how coinsurance works in your specific plan puts you in a better position to manage costs—and avoid major surprises.

When Coinsurance Risks Outweigh the Benefits

For some postal retirees and workers, high coinsurance may prompt a reevaluation of your plan selection. While premiums are only part of the story, the real cost of your coverage becomes clear when services are needed. Plans with lower premiums might carry higher coinsurance rates—and vice versa.

So even if you’re healthy now, consider your overall risk for needing costly services in the coming year. A plan with slightly higher premiums but lower coinsurance may offer more financial protection over time.

Stay Ahead of the Cost Curve

Now that PSHB is fully implemented in 2025, understanding coinsurance is more important than ever. The real danger isn’t just the percentage—it’s the unpredictability of healthcare needs. What starts as a minor issue can escalate quickly, with coinsurance stacking up before you even realize what’s happening.

Don’t wait until you’re facing a mountain of bills. Review your PSHB plan closely. Make a list of in-network providers. And if you’re Medicare-eligible, consider how enrolling in Part B could reduce your financial exposure.

You can also get personalized help by speaking with a licensed insurance agent listed on this website. They can help you compare PSHB plans, understand Medicare coordination, and estimate your potential out-of-pocket costs.