Key Takeaways

• Your PSHB paycheck deduction only shows part of the actual cost; the government is paying a significant portion you don’t see directly.

• Out-of-pocket expenses such as deductibles, coinsurance, copays, and uncovered services can add up quickly, making it essential to look beyond just the premium.

What You Pay vs. What the Government Pays

When you check your biweekly pay stub, the deduction labeled for your Postal Service Health Benefits (PSHB) plan might seem like a straightforward number. But it only tells part of the story. In reality, the federal government is covering roughly 72% of the total premium for your plan. That means your contribution, while substantial, is only a portion of the true cost of your healthcare coverage.

In 2025, the typical monthly contribution for PSHB employees is:

• Self Only: About $860.93 (weighted average)

• Self Plus One: Around $1,860.93

• Self and Family: Up to $2,025.08

However, these figures are total premiums. What you see on your paycheck is just your employee share, which averages about 28%. The rest is paid by your employer (the Postal Service).

Example of Government Contributions

• Employee Monthly Share (Weighted Average):

  • Self Only: $241.07

  • Self Plus One: $521.06

  • Self and Family: $567.02

• Government Monthly Share (Weighted Average):

  • Self Only: $619.86

  • Self Plus One: $1,339.87

  • Self and Family: $1,458.06

These are not visible on your pay stub but represent a significant investment made on your behalf.

The Deductibles You Might Be Underestimating

Many PSHB enrollees focus on their premium and copayments but overlook the impact of deductibles. Depending on whether you’re in a low-deductible or high-deductible plan, your out-of-pocket costs before coverage kicks in could range from:

• $350 to $500 for in-network services (low-deductible plans)

• $1,500 to $2,000 for in-network services (high-deductible plans)

• $1,000 to $3,000 or more for out-of-network services

If you’re not meeting your deductible early in the year, you may be paying the full cost of many services before your insurance starts to cover anything.

Coinsurance: The Percentages That Sneak Up on You

Coinsurance is a percentage of the cost of a covered service that you pay after you’ve met your deductible. In 2025, PSHB plans typically include:

• In-network coinsurance: 10% to 30%

• Out-of-network coinsurance: 40% to 50%

This may not sound like much at first, but for services like surgery, imaging, or hospital stays, the dollar amount can be substantial. A $4,000 MRI with 30% coinsurance equals $1,200 out-of-pocket. These figures are rarely obvious on your pay stub but can hit your wallet hard.

Copayments That Add Up Faster Than You Think

Unlike coinsurance, copayments are fixed amounts you pay for specific services. These are often viewed as predictable, but they can quietly become a monthly drain:

• Primary care visits: $20 to $40

• Specialist visits: $30 to $60

• Urgent care: $50 to $75

• Emergency room: $100 to $150

If you or your family members see multiple providers each month, the accumulation of these fees can significantly increase your actual cost of coverage.

Out-of-Pocket Maximums and What They Really Mean

Your plan does provide a safety net through an annual out-of-pocket maximum, which limits the total amount you’ll spend on covered services in a year. In 2025, the typical PSHB maximums are:

• $7,500 for Self Only

• $15,000 for Self Plus One and Self and Family

Once you reach these thresholds through a combination of deductibles, copayments, and coinsurance, the plan pays 100% for covered services. However, these limits only apply to in-network costs. If you’re using out-of-network providers, your expenses might not be capped in the same way.

Also, keep in mind that some services may not count toward your out-of-pocket maximum, such as non-covered treatments or costs exceeding usual and customary charges.

Prescription Drug Costs Hidden in the Fine Print

In 2025, all Medicare-eligible PSHB annuitants and family members receive prescription drug coverage through an integrated Medicare Part D plan, which includes a $2,000 annual cap on out-of-pocket drug costs. This makes a major difference for retirees who take high-cost medications.

For those not enrolled in Medicare, drug costs can still be significant. Depending on your plan:

• Generic medications might have lower copays or be fully covered after the deductible.

• Brand-name and specialty drugs could involve tiered copayments or coinsurance, which can become costly without proper planning.

New in 2025 is the Medicare Prescription Payment Plan, allowing eligible retirees to spread prescription drug costs over 12 monthly payments, providing some relief from lump-sum costs.

Services That Aren’t Covered (And Why That Matters)

Even with comprehensive coverage, not everything is included in your plan. Some of the most common exclusions or limited services include:

• Cosmetic procedures

• Alternative therapies

• Out-of-network care without prior authorization

• Services without medical necessity documentation

• Non-formulary prescription drugs

The cost of these services doesn’t count toward your deductible or out-of-pocket maximum and must be paid entirely out of pocket.

The Medicare Coordination Factor

If you’re a Medicare-eligible retiree or family member under PSHB in 2025, you are required to enroll in Medicare Part B unless you meet one of the few exceptions. The PSHB plan then becomes your secondary payer.

This coordination lowers your:

• Coinsurance costs

• Deductible responsibility

• Prescription drug expenses (through integrated Part D)

In some cases, certain PSHB plans may even offer Medicare Part B premium reimbursements, further reducing your healthcare burden.

However, if you don’t enroll in Medicare Part B when required, your PSHB coverage may become limited or even suspended for certain benefits. This isn’t something you’ll notice on your pay stub, but it can have serious financial consequences.

Timing and Enrollment: What to Watch Every Year

Your opportunity to review or change your PSHB coverage occurs annually during Open Season, held from November to December. This is your chance to:

• Switch to a different PSHB plan

• Adjust your enrollment type (Self Only, Self Plus One, or Self and Family)

• Review changes in premiums, deductibles, and benefit details

Outside of Open Season, changes can only be made during qualifying life events (QLEs) such as marriage, divorce, birth, or loss of other coverage.

It’s important to actively evaluate your plan options each year, even if your premium hasn’t gone up much. Coverage, cost-sharing amounts, and drug formularies can all change—and those changes might cost you more in the long run.

Why You Should Look Beyond the Stub

When you only consider the line item on your pay stub, you’re missing the larger picture of what you’re actually paying for health coverage. While the government’s contribution is substantial, your total financial responsibility includes much more than that visible deduction.

By the time you factor in deductibles, coinsurance, copayments, prescription costs, and non-covered services, your annual healthcare spending may exceed thousands of dollars above your premium.

The only way to manage this effectively is to:

• Understand how your plan works in full

• Track your medical usage

• Use in-network providers

• Take advantage of available tools like cost estimators, Medicare integration, and preventive services

Understanding the Full Cost Can Help You Plan Smarter

Postal Service Health Benefits provide a valuable foundation for your healthcare, but they come with responsibilities that extend well beyond your paycheck deduction. Now that you know the true cost breakdown, it’s time to take control of your healthcare strategy.

Get in touch with a licensed agent listed on this website to walk through your current plan, explore smarter options for the coming year, and uncover areas where you may be able to reduce your actual out-of-pocket spending.