Key Takeaways

• Coinsurance is a percentage-based cost-sharing feature under PSHB plans that can lead to unexpected expenses, especially for specialty care, hospital stays, and outpatient procedures.

• Even if your monthly premiums feel manageable, coinsurance costs can quickly build up when you actually use the services, especially if you’re not enrolled in Medicare Part B.

Understanding Coinsurance in PSHB

Coinsurance refers to the portion of your medical bills that you are responsible for paying after meeting your deductible. Under the Postal Service Health Benefits (PSHB) Program, coinsurance is often expressed as a percentage. For example, you might pay 20% of a covered service while your plan pays the remaining 80%.

This cost-sharing applies primarily to services such as:

• Diagnostic tests and imaging (like MRIs and CT scans)

• Hospital stays and surgeries

• Outpatient procedures

• Emergency room visits

• Specialist consultations

Unlike a copayment, which is a fixed dollar amount, coinsurance is variable and depends on the total cost of the service. This makes it harder to predict your actual out-of-pocket expenses.

How PSHB Applies Coinsurance

The PSHB Program offers a range of plan types with differing cost structures. While preventive services are generally covered in full, other medical services may require you to pay 10% to 30% in coinsurance, depending on the type of care and whether the provider is in-network.

If you receive care from an out-of-network provider, coinsurance can be substantially higher, and you may be responsible for additional charges above the plan’s allowed amount.

In-network vs. Out-of-network Costs

• In-network coinsurance: Typically ranges between 10% and 30%

• Out-of-network coinsurance: May rise to 40% or even 50% for certain services

This cost difference emphasizes the importance of checking network status before receiving care.

Medicare Part B and Coinsurance Interaction

If you are eligible and enrolled in Medicare Part B, your PSHB plan may coordinate benefits to reduce your coinsurance burden. Many PSHB plans offer lower coinsurance, waived deductibles, or even reimbursements when Medicare is the primary payer.

However, if you do not enroll in Medicare Part B when required, your coinsurance obligations under PSHB may increase substantially. In some cases, your plan will act as if Medicare had paid its share, leaving you to cover that portion.

This could mean you’re responsible for:

• The initial 20% that Medicare would have covered

• Additional amounts if the PSHB plan does not pick up the difference

If you’re approaching age 65, it’s important to carefully evaluate your Part B enrollment to avoid these out-of-pocket surprises.

Common Services Where Coinsurance Hits Hard

Here are some services where coinsurance under PSHB is most noticeable:

1. Inpatient Hospital Admissions

After paying the deductible, you may still be on the hook for 20% or more of hospital charges, which can quickly amount to thousands of dollars depending on the length of your stay.

2. Outpatient Surgeries and Procedures

Same-day surgeries performed in hospital outpatient departments or ambulatory surgical centers often come with coinsurance, which can be significant due to the high base cost of these procedures.

3. Emergency Room Services

Even with an in-network ER, you might pay a combination of a copayment plus 20% or more in coinsurance. If the facility or provider is out-of-network, the percentage increases.

4. Specialty Drugs and Infusions

Drugs administered in a clinical setting, such as chemotherapy or biologic treatments, are frequently billed with coinsurance instead of a flat copay. The cost of a single treatment could translate to hundreds of dollars out of pocket.

5. Advanced Diagnostic Testing

MRI, CT scans, and PET scans can each cost thousands. Even a 20% coinsurance rate would leave you with a notable bill for each test.

Annual Out-of-Pocket Maximums and Limitations

All PSHB plans are required to include annual out-of-pocket (OOP) maximums. These caps limit the total coinsurance, copayments, and deductibles you must pay in a plan year. For 2025:

• Self Only plans: The in-network OOP maximum is $7,500

• Self Plus One and Self & Family plans: The in-network OOP maximum is $15,000

These caps offer important protection, but you must still pay all eligible expenses until the cap is reached. If you require extensive care early in the year, you could hit these limits quickly.

Why You Might Overlook Coinsurance Until It’s Too Late

When comparing plans during Open Season or reviewing PSHB brochures, coinsurance may not jump out at you the same way premiums or copayments do. This is because:

• It’s a percentage, not a fixed cost, so it feels abstract

• It doesn’t apply until you actually use higher-cost services

• It varies based on provider and location

Many retirees and annuitants focus on monthly premium costs but underestimate how quickly coinsurance can accumulate during a health event. It’s easy to think, “I’m healthy now,” and overlook what could happen if you suddenly require surgery or a long hospital stay.

Strategies to Manage Coinsurance Exposure

While you can’t eliminate coinsurance completely under PSHB, there are several ways to reduce its financial impact:

Review Your Plan’s Summary of Benefits

Study the coinsurance percentages for each type of service. Pay attention to differences between in-network and out-of-network rates. If you have frequent specialist visits or procedures, a plan with lower coinsurance could be more cost-effective in the long run.

Enroll in Medicare Part B If Required

If you’re Medicare-eligible, enrolling in Part B is one of the most powerful ways to reduce your coinsurance exposure under PSHB. Some plans will coordinate with Medicare to:

• Waive deductibles

• Reduce or eliminate coinsurance

• Offer partial reimbursement of your Part B premium

Failing to enroll could mean higher costs and fewer protections.

Use In-Network Providers Exclusively

Stick to providers within your plan’s network whenever possible. Out-of-network services often come with higher coinsurance and no cost cap for balance billing.

Time Elective Procedures Strategically

If you’re approaching the out-of-pocket maximum, it may be cost-effective to schedule elective surgeries or treatments later in the year after you’ve already paid significant coinsurance for other services.

Monitor and Appeal Charges

Always review your Explanation of Benefits (EOBs) and billing statements. If something looks off, file an appeal. Misapplied coinsurance or coding errors can lead to inflated charges that you’re not actually responsible for.

How Coinsurance Interacts with Other PSHB Features

Coinsurance doesn’t exist in a vacuum. It works alongside other cost-sharing mechanisms:

• Deductibles: You must meet this threshold before coinsurance kicks in

• Copayments: Flat fees for basic services like primary care or prescriptions

• Catastrophic limits: These protect you once total OOP spending hits the annual cap

The combination of these elements can make total costs hard to estimate unless you walk through a few scenarios. Many retirees don’t realize how steep the costs become until after their first major claim.

You May Not Feel Coinsurance at First, But It Adds Up Fast

If you only go in for routine physicals or flu shots, coinsurance may not feel real. But once you face:

• A sudden hospital admission

• A cancer diagnosis requiring infusions

• A knee replacement

• Frequent specialist care

It will be one of the first costs you feel — and possibly the largest. Coinsurance affects the highest-cost services. Unlike a copay for a $20 generic prescription, 20% of a $10,000 hospital bill is a different story.

A Smart Approach Starts with Awareness

Understanding how coinsurance works under PSHB allows you to prepare better for real-world expenses. Don’t wait until after a major claim to learn what your share of the cost is. Consider how:

• Your plan handles Medicare coordination

• Your provider choices affect coinsurance rates

• You can use benefit summaries to make informed comparisons

Whether you’re actively using your coverage or just preparing for the what-ifs, reviewing your coinsurance exposure now helps protect your future.

Coinsurance Is Manageable When You Plan Ahead

Coinsurance may be a hidden cost on paper, but it becomes very real when your health care needs grow. If you’re a Postal Service retiree or annuitant, now is the time to:

• Review your PSHB plan’s coinsurance rates

• Confirm your Medicare Part B enrollment status

• Work with in-network providers

If you’re unsure about how your specific plan handles coinsurance — or want help comparing your options — speak with a licensed agent listed on this website. They can help you understand your exposure and make confident decisions for 2025 and beyond.