Key Takeaways

• Coinsurance under your PSHB plan can appear manageable—until you’re faced with high-cost care like a hospital admission or outpatient procedure, where percentages turn into thousands.

• Knowing when and how coinsurance applies within your plan helps you prepare financially and avoid surprise bills, especially if you’re also coordinating with Medicare.

Why Coinsurance Matters More Than You Think

If you’re enrolled in a Postal Service Health Benefits (PSHB) plan in 2025, you may already know that coinsurance plays a role in your out-of-pocket healthcare costs. But here’s what often gets overlooked: coinsurance percentages that seem minor can quickly escalate into significant expenses depending on the service you receive.

Coinsurance is not the same as a flat copayment. While a copayment might charge you $30 for a specialist visit, coinsurance charges you a percentage of the total cost—say, 20%—which can balloon during expensive treatments or hospital stays.

Understanding how and when coinsurance is triggered in your PSHB plan is essential for planning ahead, especially if you or your dependents have chronic conditions, complex treatment needs, or face unexpected hospital admissions.

What Coinsurance Actually Means in Your PSHB Plan

In your 2025 PSHB coverage, coinsurance typically applies after you meet your annual deductible. This is the amount you must pay out-of-pocket for covered services before your plan begins to share the cost. Once the deductible is met, the plan starts splitting costs with you through coinsurance.

Let’s break it down:

• Deductible phase: You pay 100% of eligible expenses until your deductible is met. For many PSHB plans, this ranges from $350 to $1,500 depending on plan type.

• Coinsurance phase: After the deductible, you start paying a percentage—often 10% to 30%—for in-network services. Out-of-network services typically cost more.

• Out-of-pocket maximum: Once you hit this limit (usually between $5,000 and $7,500 for Self Only coverage in 2025), the plan pays 100% of covered services for the rest of the year.

So while coinsurance may seem manageable in isolation, one hospital stay or round of specialty care could accelerate your spending toward that out-of-pocket maximum much faster than expected.

When Coinsurance Hits the Hardest

Coinsurance becomes financially significant when services are:

• Hospital-based (inpatient or outpatient procedures)

• High-cost diagnostics (MRI, CT, or nuclear scans)

• Specialist treatments (oncology, rheumatology, cardiology)

• Therapies or surgeries that require multiple visits or extended care

In 2025, hospital services—whether for a planned surgery or emergency admission—can cost tens of thousands of dollars. If your coinsurance rate is 20%, you could owe thousands even before hitting your plan’s out-of-pocket cap.

Additionally, durable medical equipment, outpatient surgeries, and advanced imaging often fall under coinsurance clauses, not copayments. You could see these charges add up across multiple billing cycles.

Coinsurance vs. Copayment: Know the Difference

It’s common to confuse coinsurance with copayments, but their financial impact is entirely different:

• Copayments are fixed amounts (e.g., $30 per visit), giving you predictable costs.

• Coinsurance is a variable cost based on a percentage of the total charge, which fluctuates with service type and provider.

Understanding this distinction helps you budget realistically, especially if you plan to use high-cost services during the year. Many PSHB plans still use copays for primary care or generic prescriptions, but move to coinsurance for specialists, hospital services, and brand-name medications.

Coinsurance and Medicare: How the Coordination Works

If you’re a Medicare-eligible annuitant under PSHB in 2025, coinsurance works a little differently when you’re enrolled in both Medicare Part B and your PSHB plan.

Here’s how coordination typically happens:

• Medicare pays first for eligible services (usually covering 80%)

• Your PSHB plan pays second, often covering some or all of the remaining 20%

However, the exact outcome depends on your PSHB plan’s coordination rules. Some plans waive or reduce coinsurance if Medicare Part B is your primary coverage. This is a key reason many PSHB annuitants choose to enroll in Part B, despite its premium.

Keep in mind:

• If you decline Part B, your PSHB plan will treat you as the primary insurer and charge full coinsurance.

• With Part B, many PSHB plans cover most or all coinsurance amounts—sometimes eliminating them altogether.

Understanding how this coordination affects your bottom line can save you significantly, especially during inpatient stays or extended outpatient treatments.

In-Network vs. Out-of-Network: Your Coinsurance Multiplier

In 2025, your coinsurance rate can vary dramatically depending on whether you stay in-network:

• In-network providers usually charge lower rates, and your coinsurance might be around 15%-30%.

• Out-of-network providers charge higher rates, and your coinsurance could jump to 40%-50% or more.

This is crucial in hospital settings where certain specialists or labs might be out-of-network—even if the hospital itself is in-network. Always verify provider status before undergoing non-emergency procedures. If a surgeon, anesthesiologist, or radiologist is out-of-network, your coinsurance liability can spike.

To protect yourself:

• Confirm provider network status before scheduling major services

• Request a pre-treatment cost estimate from your plan

• Ask about balance billing protections if out-of-network providers are involved

What Happens When You Hit the Out-of-Pocket Maximum

The good news is that PSHB plans set annual out-of-pocket maximums, which cap your total spending. In 2025, these caps range:

• Self Only: Around $5,000–$7,500

• Self Plus One / Self & Family: Around $10,000–$15,000

Once you hit the cap, the plan pays 100% of covered in-network services for the rest of the year. But here’s the catch: it often takes a major health event to reach this threshold, meaning you’ve already paid thousands out-of-pocket via deductibles and coinsurance.

Additionally:

• Only covered expenses count toward the cap

• Out-of-network services might have separate out-of-pocket limits

• Some ancillary charges (like non-covered prescriptions or non-formulary items) may not count at all

Always review your plan’s benefit brochure carefully so you’re not surprised.

What You Can Do to Manage Coinsurance Costs

Even though coinsurance is built into nearly every PSHB plan, you still have tools to manage it.

1. Use in-network providers whenever possible. This avoids higher coinsurance rates and surprise billing.

2. Coordinate with Medicare Part B if you’re eligible. This can reduce or eliminate many coinsurance costs.

3. Track your deductible and out-of-pocket total. Knowing where you stand helps you make smart decisions, especially if considering elective services.

4. Compare plans during Open Season. Some plans have lower coinsurance rates or waive them entirely if Medicare is primary.

5. Use plan transparency tools. These can give you estimates for upcoming procedures.

6. Ask about pre-authorizations. Ensuring your care is pre-approved reduces the risk of non-covered charges.

Avoiding Common Misunderstandings About Coinsurance

Many PSHB members assume that once their deductible is met, the cost burden becomes minimal. But coinsurance still exposes you to significant costs depending on the nature of your care.

Here are a few misunderstandings to avoid:

• “My plan pays 70%, so I’m covered.” That 30% could be thousands of dollars.

• “Emergency care is always covered fully.” Not necessarily, especially if the provider is out-of-network.

• “My out-of-pocket maximum is the same for everything.” Out-of-network limits may be separate or higher.

• “I don’t need Medicare Part B.” Without it, your PSHB plan may charge full coinsurance as the primary payer.

Understanding these nuances can help you take proactive steps instead of reactive ones.

Why This Matters Now More Than Ever

In 2025, medical costs continue to rise. Hospital care, specialist treatments, and outpatient surgeries are more expensive than ever. While PSHB plans offer generous benefits, coinsurance remains a key area where many enrollees underestimate their exposure.

A simple 20% coinsurance rate sounds reasonable—until you’re looking at a $20,000 hospital bill. That’s $4,000 out-of-pocket on just one event, and if you haven’t hit your deductible yet, it’s even more.

Planning for the possibility of high-cost care—even if you’re currently healthy—is essential. Coinsurance is not a penalty, but it’s a reminder that you share risk with your plan.

Preparing for Your Next Enrollment Period

As Open Season approaches from November to December, take the time to review how your current plan handles coinsurance:

• Compare coinsurance rates side-by-side

• Look at what happens when Medicare is primary

• Check the out-of-pocket maximum and how quickly coinsurance can drive you there

Don’t just focus on premiums or deductibles. Coinsurance is the cost you’re most likely to forget about—until you get the bill.

Speak with a licensed agent listed on this website if you need help comparing options or understanding how coinsurance affects your plan.