Key Takeaways

• PSHB comes with costs: While the Postal Service Health Benefits (PSHB) program offers strong coverage, it is not free. You will have to budget for premiums, deductibles, copayments, and other expenses.

• Medicare integration affects your costs: If you’re retired and enrolled in Medicare, your out-of-pocket costs for PSHB can vary depending on your plan’s benefits and coordination with Medicare Part B.

Understanding Your PSHB Costs in 2025

If you’re a postal worker or retiree, you’re now enrolled in the Postal Service Health Benefits (PSHB) program instead of the old Federal Employees Health Benefits (FEHB) program. This transition affects how much you pay for coverage, so knowing what to expect in 2025 is essential for budgeting your healthcare expenses.

While the PSHB program provides comprehensive health benefits, it is not free. You’re responsible for several costs, including monthly premiums, deductibles, copayments, and coinsurance. If you’re retired and enrolled in Medicare, how your PSHB plan integrates with Medicare can also affect your expenses.

Let’s break down the real costs of PSHB coverage in 2025.

Monthly Premiums: What You Pay to Stay Covered

The first cost you’ll notice is your monthly premium. This is the amount you pay to maintain your PSHB coverage, whether you use healthcare services or not.

• Your premium depends on your plan and coverage level (Self Only, Self Plus One, or Self and Family).

• The government covers a portion of the premium, but you are responsible for the rest.

• If you’re an annuitant, your premium is deducted from your annuity payments. If you’re an active postal worker, it comes out of your paycheck.

• Premiums are set annually, and they may increase based on healthcare costs, inflation, and plan adjustments.

• If you experience a Qualifying Life Event (QLE) such as marriage, divorce, or the birth of a child, you may need to adjust your coverage, which could change your premium.

Deductibles: The Cost Before Insurance Kicks In

A deductible is the amount you pay out-of-pocket before your health insurance begins covering services.

• Some PSHB plans have low deductibles, making it easier to access benefits quickly.

• High-deductible plans require you to pay more upfront before coverage starts but may come with additional savings options.

• If you have Medicare, your PSHB plan may waive or reduce your deductible, depending on the plan’s benefits.

• Preventive care services are often covered at no additional cost, even before you meet your deductible.

• Deductibles reset annually, so you’ll need to plan for these costs each year.

Copayments and Coinsurance: Your Share of the Costs

Even after meeting your deductible, you’ll still share costs when receiving medical care. These expenses fall into two categories:

• Copayments: A fixed dollar amount you pay for a service. For example, you might pay a set fee for a primary care visit or a specialist appointment.

• Coinsurance: A percentage of the total cost of a service. Instead of a fixed fee, you’ll pay a percentage, such as 20% of the cost of a hospital stay.

• Some PSHB plans offer tiered copayments, meaning lower costs for in-network providers and higher costs for out-of-network care.

• Specialty services, such as physical therapy, mental health counseling, and durable medical equipment, may have separate copayments or coinsurance rates.

Prescription Drug Costs Under PSHB

Your prescription drug costs depend on whether you’re enrolled in Medicare.

• If you’re not enrolled in Medicare, your PSHB plan covers prescriptions under its formulary.

• If you have Medicare, your PSHB plan provides a Medicare Part D prescription drug benefit, which includes a cap on out-of-pocket drug costs. In 2025, this cap is set at $2,000 per year, helping limit high medication expenses.

• Generic drugs usually have lower copayments compared to brand-name and specialty drugs.

• Some plans require prior authorization or step therapy for certain medications, which could impact when and how your prescriptions are covered.

• If you need long-term medication, mail-order pharmacy services may offer lower prices than retail pharmacies.

How Medicare Enrollment Changes Your Costs

If you’re retired and eligible for Medicare, enrolling in Medicare Part B is now required to keep your PSHB coverage unless you qualify for an exemption. This requirement affects how much you pay overall:

• Premiums: Medicare Part B has its own monthly premium, which is separate from your PSHB premium.

• Lower Cost Sharing: Many PSHB plans waive certain out-of-pocket costs, such as deductibles or coinsurance, if you have Medicare.

• Prescription Drug Coverage: You’re automatically enrolled in a Medicare Part D plan through PSHB, which includes the new $2,000 annual out-of-pocket drug cost cap.

• Coordination of benefits ensures that your PSHB plan and Medicare work together to provide the best coverage possible, reducing your out-of-pocket expenses.

Maximum Out-of-Pocket Limits for 2025

To protect you from excessive medical costs, PSHB plans include an out-of-pocket maximum. This is the most you’ll have to pay for covered services in a year before your plan covers 100% of remaining costs.

• In-Network Out-of-Pocket Maximum:

  • Self Only: $7,500

  • Self Plus One & Self and Family: $15,000

• Out-of-Network Costs: If you go outside your plan’s network, your costs may be much higher, and these expenses might not count toward your out-of-pocket maximum.

• Out-of-pocket limits reset every January 1st, meaning you’ll need to meet your maximum again each year.

The Importance of Staying In-Network

Using in-network providers can save you significant money, as these providers have agreements with your plan to charge lower rates.

• Out-of-network care can lead to balance billing, where you may be charged the difference between the provider’s rate and what your plan covers.

• Emergency services are covered even if out-of-network, but costs may be higher.

Vision and Dental Coverage: Are They Included?

PSHB plans do not automatically include vision and dental benefits. If you want coverage for these services, you can enroll in a separate Federal Employees Dental and Vision Insurance Program (FEDVIP) plan.

• Vision plans: Cover eye exams, glasses, and contact lenses.

• Dental plans: Provide coverage for cleanings, fillings, and major dental work.

• Cost Consideration: Premiums and out-of-pocket costs for vision and dental plans are separate from your PSHB health plan.

Making Sense of Your PSHB Costs in 2025

PSHB provides strong healthcare benefits, but you still need to budget for premiums, deductibles, copayments, and other costs. If you’re a retiree, integrating your PSHB coverage with Medicare can help reduce expenses, but it also adds additional premiums to consider. Staying informed about your healthcare costs ensures you’re financially prepared for the year ahead. If you need guidance on choosing the right PSHB plan or understanding your healthcare costs, get in touch with a licensed agent listed on this website for professional advice.