Key Takeaways

• PSHB deductibles may appear manageable on paper, but they can add up quickly and significantly impact your annual healthcare costs.

• Understanding your deductible’s structure and how it interacts with coinsurance and out-of-pocket limits is key to managing your expenses effectively.

The Role Deductibles Play in PSHB Plans

As a Postal Service employee or retiree enrolled in a Postal Service Health Benefits (PSHB) plan, you might assume that your health insurance will always take care of most expenses. While it’s true that PSHB plans offer strong coverage, the part you might be underestimating is your annual deductible. This amount, which you must pay out of pocket before your plan starts sharing the cost of services, can silently become one of your most significant yearly expenses.

The 2025 PSHB program, rolled out under the Postal Service Reform Act, introduces new dynamics, especially in how deductibles interact with Medicare and out-of-pocket limits. If you’re not paying close attention, you could be caught off guard when major or even routine healthcare expenses begin to add up.

What Exactly Is a Deductible?

In simple terms, a deductible is the dollar amount you need to pay for covered healthcare services before your PSHB plan starts to share costs. It resets every calendar year. Until you meet your deductible, you’re responsible for the full cost of services like specialist visits, imaging, outpatient procedures, and more, unless the service is explicitly covered without cost-sharing (such as preventive care).

Deductible Basics in 2025

• Low-Deductible PSHB Plans typically range from $350 to $500 annually for in-network care.

• High-Deductible Plans can have deductibles between $1,500 and $2,000 or more.

• Out-of-network deductibles are much higher, often ranging from $1,000 to $3,000.

Your specific deductible amount depends on the plan you choose and whether you’re on a Self Only, Self Plus One, or Self and Family plan.

Why Deductibles Are Often Overlooked

Many enrollees focus on monthly premiums when evaluating their healthcare costs. That makes sense—those are the visible amounts deducted from your paycheck or annuity every month. But the deductible, hidden until you actually use healthcare services, can take you by surprise.

You might not think about your deductible until you receive a medical bill. And if you or a family member need several medical visits early in the year, those bills can pile up before your plan begins sharing the cost.

When the Deductible Hits Hard

Deductibles hit the hardest:

• At the start of each year when your deductible resets.

• When you need unexpected care, such as ER visits, diagnostic tests, or outpatient surgery.

• When covering dependents, since a family deductible could apply.

The surprise factor is what makes deductibles so impactful. Many people budget around premiums and routine copays but forget that the deductible can add hundreds or even thousands of dollars to annual out-of-pocket expenses.

Deductibles vs. Other Cost-Sharing Features

It’s important to understand how deductibles fit within the broader cost-sharing framework of PSHB plans. Here’s how they compare:

Copayments

Copays are fixed amounts (like $20 for a primary care visit) and typically apply to routine services. These do not usually count toward the deductible.

Coinsurance

Coinsurance is the percentage you pay for services after meeting your deductible. For example, you may owe 20% of the cost of an MRI after your deductible is met.

Out-of-Pocket Maximum

This is the cap on your total spending for covered services in a calendar year. Once you hit this cap, your plan pays 100% of covered costs for the rest of the year. Deductibles count toward this maximum.

Understanding how these elements interact can help you plan more effectively for your total healthcare costs.

How Medicare Changes the Deductible Equation

If you’re a Medicare-eligible retiree under PSHB, your deductible experience may differ significantly. In 2025, many PSHB plans offer coordination with Medicare Part B, which changes how deductibles and other cost-sharing apply:

• If enrolled in Medicare Part B, many PSHB plans waive or reduce your deductible.

• You may pay little to no coinsurance or copays for services covered by both Medicare and PSHB.

• Prescription drug costs fall under Medicare Part D through an Employer Group Waiver Plan (EGWP), which has its own deductible and cost-sharing rules.

However, this coordination is only available if you are enrolled in Medicare Part B. If you’re not enrolled and are required to be, you may face higher deductibles and could lose prescription drug coverage.

What You Can Do to Prepare for Deductible Costs

The deductible doesn’t have to be a budget buster if you plan ahead. Here’s how you can stay ahead of unexpected healthcare expenses:

Review Your Plan Annually

Each year during Open Season (November to December), compare PSHB plans. Look beyond just the premiums and examine:

• Annual deductibles (in-network and out-of-network)

• What services apply to the deductible

• Whether your providers are in-network

Set Aside Funds

If you’re in a high-deductible PSHB plan, consider setting money aside in a Health Savings Account (HSA) if eligible. For 2025, HSAs allow individuals to contribute up to $4,300 (or $8,550 for families), with an additional $1,000 catch-up if you’re 55 or older.

Track Your Spending Early in the Year

Since deductibles reset in January, you’ll likely hit the most cost exposure in the first half of the year. Track how close you are to meeting your deductible, especially before undergoing costly procedures.

Use Preventive Services

Most PSHB plans offer preventive services (like screenings and immunizations) at no cost to you. These don’t apply to your deductible and are a smart way to stay ahead of major medical issues.

Family Deductibles: What You Need to Know

If you cover more than just yourself under a Self Plus One or Self and Family plan, there’s another layer to consider:

• Embedded deductibles: Each family member has an individual deductible, and the plan also has a combined family deductible.

• Aggregate deductibles: The family must meet the full deductible amount before cost-sharing begins for anyone.

Understanding which structure your plan uses is crucial, as it affects how soon you receive cost-sharing benefits for family members.

What Happens Once You Meet the Deductible

Once your deductible is met, your PSHB plan will start sharing the cost of covered services. That doesn’t mean services become free, though. You’ll typically enter a coinsurance phase where you pay a percentage of the costs until you reach your out-of-pocket maximum.

At that point, your plan covers 100% of covered medical expenses for the rest of the calendar year. For in-network care in 2025, the out-of-pocket cap is generally $7,500 for Self Only and $15,000 for family coverage. These limits vary depending on your chosen plan.

What If You Use Out-of-Network Services?

If you go outside your PSHB plan’s provider network, your deductible is almost always higher. You’ll also face higher coinsurance rates and a separate out-of-pocket maximum. These can be double or even triple your in-network costs.

Check whether:

• Your preferred providers are in-network

• Emergency services are subject to out-of-network rules

• Referrals or prior authorizations affect how deductibles apply

Transitioning to Retirement? Watch for Deductible Changes

If you retire in 2025 or are already retired, your deductible obligations may change depending on your Medicare status. PSHB plans coordinate with Medicare differently than they did under FEHB. Some plans reduce your deductible or even eliminate it if Medicare Part B is primary.

Be mindful of:

• Whether your retirement status affects eligibility for HSA contributions

• How your annuitant premiums and deductibles align with your new fixed income

• Timing your Medicare Part B enrollment to avoid gaps or penalties

Why Deductibles Should Factor into Every Plan Choice

It’s easy to compare premiums. But when you overlook deductibles, you risk choosing a plan that looks cheaper but costs more over time. For instance, a low-premium, high-deductible plan may work well for someone who rarely uses healthcare. But if you end up needing surgery or frequent care, you could pay significantly more than you anticipated.

On the other hand, a higher premium plan with a low deductible might save you money if you anticipate moderate to high healthcare usage. That’s why deductibles should always be part of your plan comparison process.

Deductibles Are Manageable When You Plan Ahead

PSHB plans in 2025 are structured to offer choice and flexibility, but those options come with trade-offs. Deductibles may not be the first thing you think about, but they often end up being the most expensive piece of your healthcare puzzle if ignored.

Use Open Season to reassess your coverage. If you’re Medicare-eligible, take full advantage of the cost-sharing reductions available through coordinated benefits. If you’re still working, think strategically about whether your deductible structure fits your budget, your family’s health needs, and your expected service use in the coming year.

If you’re uncertain about how your deductible impacts your overall healthcare costs or how to compare your plan options, speak with a licensed agent listed on this website for guidance tailored to your situation.