Key Takeaways

• PSHB contributions in 2025 may be higher than you expect, even when your coverage remains unchanged.

• Certain plan structures within PSHB can create disproportionate out-of-pocket costs that aren’t always obvious from premium levels alone.

Why Contribution Amounts Don’t Reflect Coverage Quality

When you hear the word “contribution,” it sounds like you’re simply pitching in toward a shared goal. In the context of the Postal Service Health Benefits (PSHB) Program, however, the word carries a heavier financial implication. Your contribution refers to your share of the total premium—and in 2025, this portion may increase without delivering additional coverage value.

While the government typically covers about 70% of the total premium, you pay the rest. And that “rest” varies significantly depending on plan type and coverage level (Self Only, Self Plus One, or Self and Family).

In theory, a higher contribution might suggest better benefits. But that’s not always how PSHB plans are structured.

Factors That Influence Your Share of Premium

• Coverage tier: Plans scale based on how many people are covered.

• Plan category: High-deductible vs. standard plans carry different pricing models.

• Government cap: Your contribution can increase if your plan’s cost grows faster than the government contribution formula.

The result? You might be paying more in 2025 for the same benefits you had in 2024—or fewer, if deductibles and coinsurance are higher.

The 2025 Cost-Sharing Landscape Has Shifted

The transition from the Federal Employees Health Benefits (FEHB) Program to PSHB has added a new set of expectations for Postal Service employees and retirees. One of the most noticeable changes is how cost-sharing structures now influence your contribution in less predictable ways.

What’s Changed in 2025

• Higher average premiums: Enrollees have seen an uptick in premium rates.

• Tighter government contribution limits: These are tied to a benchmark formula that doesn’t always match actual plan cost increases.

• Mandatory medicare Part B integration: If you’re Medicare-eligible, you may need to enroll in Part B to maintain your PSHB coverage, which adds a separate monthly cost.

All these elements combine to affect your take-home pay or retirement income—and not always for added coverage value.

Contribution vs. Value: A Disconnect You Can’t Ignore

In a typical consumer setting, higher prices should mean better value. But in PSHB, your contribution increase might reflect systemic pricing shifts rather than enhanced coverage.

You May Be Paying More for the Same:

• No changes in provider access

• No improvements in cost-sharing

• No added supplemental benefits

The cost may rise simply because the plan itself adjusted internally—not because you opted for better care. And this often goes unnoticed until your paycheck or annuity deposit reflects the deduction.

Coverage Levels: How Your Tier Impacts Cost

Let’s break down the three primary coverage tiers:

1. Self Only

This is the lowest-cost tier. Even so, in 2025, premium contributions have increased across the board. If you’re not reviewing plan documents carefully, you might miss plan design changes that don’t correspond with the higher contribution.

2. Self Plus One

Often more expensive per person than the Self and Family tier. You may pay a disproportionately high contribution here, especially if your plan doesn’t offset costs with added benefits.

3. Self and Family

Though pricier in total dollars, this option sometimes offers better value per individual covered. Still, the increased contribution in 2025 could outpace the value if the plan hasn’t adjusted coinsurance or copay structures accordingly.

Deductibles and Cost-Sharing Matter More Than Ever

Your premium contribution is only part of the story. In 2025, many PSHB plans have made changes to deductibles, copayments, and coinsurance. That means even if you’re contributing more per month, you might also pay more at the point of care.

What to Watch For:

• Higher deductibles: Especially in high-deductible health plans (HDHPs).

• Increased coinsurance percentages: Often affecting specialist visits and hospital care.

• Expanded copayment tiers: More services are falling under higher copay categories.

These subtle design changes make it possible for a plan to appear stable while actually reducing your coverage value over time.

Medicare Integration Can Skew the Equation

If you are Medicare-eligible in 2025 and enrolled in a PSHB plan, your situation becomes more complex. Many PSHB plans now require enrollment in Medicare Part B to maintain full coverage.

What That Means for You:

• Dual contributions: You’re now paying a PSHB premium and a Medicare Part B premium.

• Potential cost offsets: Some plans reduce deductibles or cost-sharing when combined with Medicare, but not all do.

• Prescription drug coordination: PSHB now includes an EGWP Part D plan, which may change how your medications are covered.

So while your total contribution rises, it doesn’t always come with a dollar-for-dollar improvement in coverage.

You Might Be Contributing More Than a Federal Employee

Postal retirees and employees under PSHB in 2025 often find their contribution is higher than what an active federal employee pays under FEHB—even for comparable coverage.

Why?

• Different rate structures: PSHB uses its own premium model.

• No locality adjustments: Unlike federal salaries, contribution rates don’t reflect cost of living in your area.

• Medicare enrollment impact: Federal employees aren’t mandated to enroll in Part B the way some PSHB enrollees are.

This discrepancy becomes even more important when budgeting for long-term retirement income.

How Annual Increases Compound Over Time

Even small increases in your contribution add up. Over five years, a $40 monthly difference amounts to $2,400—and that’s before accounting for inflation or increased out-of-pocket costs.

Projected Contribution Trends:

• 2025: Across-the-board increases due to PSHB transition and inflation.

• 2026 and beyond: Expected to continue rising, especially for Self Plus One plans.

If your income stays fixed but your contributions keep growing, your effective health budget shrinks—unless your plan is also improving benefits.

Plan Brochures Don’t Always Tell the Whole Story

Every year, you receive a brochure outlining your plan’s features. While helpful, these brochures often downplay:

• The impact of coinsurance

• The significance of tiered drug pricing

• The real cost of using out-of-network care

And they almost never highlight how your contribution has changed in proportion to the plan’s actual benefit shifts.

What You Should Do Before the Next Open Season

To make sure your contribution aligns with the value you’re receiving, consider these actions before the next open season:

• Compare all three tiers: Sometimes Self and Family can be more cost-effective than Self Plus One.

• Evaluate cost-sharing structures: Don’t assume the plan with the lowest premium is the cheapest overall.

• Account for Medicare integration: Understand how your Part B and PSHB plans interact.

• Contact a licensed agent listed on this website: Get help reviewing your options based on your health needs and financial goals.

Your PSHB Contribution Deserves More Scrutiny

What you contribute toward your PSHB plan in 2025 isn’t just a number—it’s a reflection of multiple variables that shift year to year. The more attention you pay to plan design, cost-sharing mechanisms, and Medicare coordination, the more effectively you can protect your retirement budget.

Before the next Open Season, take time to reassess your coverage. The right choice isn’t always the plan with the lowest premium—it’s the one that matches your care needs without quietly draining your income.

For detailed assistance tailored to your circumstances, reach out to a licensed agent listed on this website.