Key Takeaways

• Your biweekly PSHB contributions are only part of the total costs you cover; deductibles, coinsurance, copayments, and prescription expenses can significantly increase your overall out-of-pocket burden.

• Understanding what your PSHB contributions include—and what they don’t—is essential for planning and managing healthcare expenses during retirement or active employment.

What You Think You’re Paying For vs. What You Actually Get

On the surface, your Postal Service Health Benefits (PSHB) contribution might appear to be a straightforward deduction from your paycheck or annuity. However, that number doesn’t tell the full story. In 2025, active USPS employees and annuitants alike are facing a reality where PSHB contributions often mask the additional layers of healthcare expenses that emerge once services are used.

Your contribution covers a share of the monthly premium for your health plan. The government generally pays around 70% of the total premium, and you cover the remaining 30%. But that premium contribution only grants you access to your plan—it doesn’t cover all the care you receive.

What PSHB Contributions Actually Include

Your monthly or biweekly contribution ensures you have access to the PSHB plan of your choice. This amount generally includes:

• Basic access to the plan’s provider network

• Preventive care at no extra cost (in-network)

• Catastrophic coverage limits (out-of-pocket maximums)

• Coverage for certain essential health benefits, like hospital stays, surgeries, and prescription drugs (though these often involve additional cost-sharing)

While these inclusions form a solid foundation of health coverage, they are far from comprehensive in terms of financial protection.

The Out-of-Pocket Costs You Still Must Cover

After paying your share of the premium, you still face several cost layers:

1. Deductibles

Deductibles vary widely across PSHB plans. In 2025, low-deductible options may start around $350 for self-only coverage, while high-deductible plans can require $1,500 or more. These amounts must be paid out of pocket before your plan begins to share in the cost of most services.

2. Copayments

Most plans charge fixed copays for services such as:

• Primary care visits (typically $20–$40)

• Specialist appointments (often $30–$60)

• Urgent care ($50–$75)

• Emergency room visits ($100–$150)

These costs may seem modest individually but can add up quickly with frequent usage.

3. Coinsurance

Coinsurance percentages kick in after your deductible is met. Common rates under PSHB plans range from:

• 10% to 30% for in-network services

• 40% to 50% for out-of-network services

If you undergo a costly medical procedure, these percentages could translate into thousands of dollars in bills.

4. Prescription Drugs

Prescription drug costs under PSHB vary depending on the tier of the medication and whether you are Medicare-eligible. Even with Medicare integration, some drugs may require significant copays or cost-sharing, especially for brand-name or specialty medications.

What Medicare Adds—and What It Doesn’t Cover

If you are Medicare-eligible in 2025 and enrolled in both Part A and Part B, many PSHB plans offer enhanced benefits, such as:

• Waived or reduced deductibles

• Lower copayments and coinsurance

• Integration with Medicare Part D prescription drug coverage (through Employer Group Waiver Plans)

However, Medicare doesn’t cover everything:

• Dental and vision benefits are limited

• Hearing aids, long-term care, and custodial care are not covered

• Out-of-network charges may still apply under PSHB depending on plan type

If you opt out of Medicare Part B, you may lose access to these integrated PSHB benefits.

Why Contributions Alone Are Misleading

Looking only at your biweekly or monthly contribution can lead to a false sense of affordability. A plan with a low premium share might offset that with:

• Higher deductibles

• Elevated coinsurance rates

• Narrower provider networks

• Limited out-of-network protections

So, while the contribution seems manageable, the total cost when you actually need care can be substantially higher.

Are You Paying More Than Needed?

Many PSHB enrollees overlook the full spectrum of cost-sharing when evaluating their plan. You might be paying more over the year in:

• Repeated specialist copays

• Ongoing prescription drug costs

• Unexpected out-of-network charges

• Services not subject to deductible credits

To get a clearer picture, it helps to:

• Review your plan’s Summary of Benefits and Coverage (SBC)

• Use plan comparison tools available during Open Season (each November–December)

• Estimate total annual costs based on your usual care usage

Contributions and Retirement Budget Planning

If you are retired or approaching retirement, your PSHB contributions do not remain fixed. While annuitants in 2025 have stable coverage, their share of the premium can increase annually. What matters more is how that contribution fits into your broader retirement budget.

Key considerations:

• Are you budgeting only for premiums or including total cost-sharing?

• Does your current plan reduce your Medicare Part B costs?

• Are you choosing plans based on contribution alone or actual usage patterns?

Planning around these questions helps avoid unexpected financial strain in retirement.

Coverage Type Matters More Than You Think

The type of plan you choose under PSHB (Self Only, Self Plus One, or Self and Family) greatly impacts your contribution—but also your exposure to additional costs.

• Self Only: Lower contribution but fewer protections if you occasionally need family-based coverage (e.g., adult children under 26)

• Self Plus One: Often disproportionately priced compared to family coverage, but better suited for dual retirees or married couples

• Self and Family: Higher contribution, but broader coverage and potentially better cost-sharing structure across multiple users

Choosing the wrong tier can mean either overpaying or facing surprise out-of-pocket charges.

The Value of Cost-Sharing Features

Rather than focusing on contributions alone, look deeper into these plan design features:

• Out-of-pocket maximums: These cap your annual costs. In 2025, they can range from $5,000 to $7,500 for Self Only coverage.

• Preventive coverage: Services like annual exams, screenings, and vaccinations are covered with no copay under in-network conditions.

• Coverage for chronic conditions: Plans vary widely in managing high-cost diseases. Some offer care coordination and lower coinsurance for specific services.

What to Watch for During Open Season

Every November through December, you can review and change your PSHB plan. Instead of simply checking your contribution:

• Review the full cost structure

• Check plan changes for the upcoming year

• Look at how Medicare integration is handled

• See if your prescription needs are better met under another option

PSHB plans can change their cost-sharing terms yearly, so your contribution in 2025 may not reflect the care value you get in 2026.

Don’t Overlook These Hidden Costs

In addition to what’s clearly stated in plan documents, some costs are harder to anticipate:

• Out-of-network referrals: Even if you’re mostly in-network, referrals to out-of-network specialists can cost more.

• Non-covered services: Items like cosmetic procedures, custodial care, or experimental treatments are typically excluded.

• Balance billing: In out-of-network cases, some providers may charge you the difference beyond what your plan covers.

Knowing these risks allows you to choose plans that minimize unexpected financial exposure.

Getting Clear on the Bigger Picture

While the PSHB program offers stable coverage options, especially with Medicare integration, your true financial responsibility goes beyond what you see deducted from your paycheck or annuity. By understanding the full extent of what your contributions do and do not cover, you place yourself in a better position to select a plan that aligns with both your medical needs and your financial reality.

Make Your PSHB Plan Work for You in 2025

In 2025, the decisions you make during Open Season or after qualifying life events shape not just your monthly premium payments but your entire healthcare spending year-round. Don’t just focus on what you pay in contributions—focus on the value you receive.

Speak with a licensed agent listed on this website to help you assess plan features, understand cost-sharing, and select a PSHB plan that works for your health and budget.