Key Takeaways

• Coinsurance under PSHB plans can lead to unexpected out-of-pocket expenses, especially for retirees with frequent or extended healthcare needs.

• Understanding how coinsurance differs from copayments and deductibles helps you make smarter decisions about choosing and using your health plan in retirement.

Coinsurance Often Hides in the Fine Print

If you’re a retired postal worker enrolled in a Postal Service Health Benefits (PSHB) plan, you may have heard the term “coinsurance” without fully grasping what it means until you’re staring down a hefty medical bill. Coinsurance isn’t just a minor footnote in your plan brochure—it plays a significant role in how much you ultimately pay for your care.

Coinsurance is the percentage of medical costs you must pay after you’ve met your deductible. For example, if your plan has a 20% coinsurance rate, you’re responsible for 20% of the bill after the deductible is satisfied. The plan pays the remaining 80%. Unlike copayments, which are fixed amounts, coinsurance varies based on the total cost of the service.

Why This Matters More in Retirement

During your working years, you might not have paid close attention to coinsurance if you rarely visited a doctor. But retirement changes that. You may need more frequent care, chronic condition management, or specialist visits—all of which often come with coinsurance charges.

In 2025, PSHB plans continue to use coinsurance as a cost-sharing mechanism, especially for:

• Specialist consultations

• Outpatient surgeries

• Durable medical equipment

• Imaging services (like MRIs or CT scans)

• Certain hospital services

If you have Medicare Part B, some of these costs can be offset, but not all. And if you delay enrolling in Medicare or skip it altogether, the coinsurance amounts you owe under your PSHB plan can be much higher.

Coinsurance vs. Copayments and Deductibles

It’s easy to confuse coinsurance with other out-of-pocket costs, but they work differently:

• Copayments: These are fixed amounts (like $30 for a primary care visit) you pay at the time of service.

• Deductibles: This is the amount you pay out of pocket before your plan begins covering costs.

• Coinsurance: This is the percentage you pay for covered services after meeting your deductible.

Here’s the catch: coinsurance has no upper limit until you reach your plan’s out-of-pocket maximum, which in PSHB plans for 2025 can be as high as $7,500 for Self Only or $15,000 for family coverage.

The 2025 Cost Picture: A Quick Overview

Coinsurance for PSHB enrollees in 2025 generally falls into the following ranges:

• 10%–30% for in-network care

• 40%–50% for out-of-network care

That means a $2,000 outpatient procedure could leave you responsible for $400 to $600 if in-network—or up to $1,000 if out-of-network. These costs multiply quickly if you face multiple procedures, ongoing treatment, or chronic illness.

How Medicare Part B Can Reduce Your Exposure

If you’re 65 or older and enrolled in Medicare Part B, many PSHB plans will reduce or waive coinsurance amounts for Medicare-covered services. Some plans coordinate benefits so that Medicare pays first, and the PSHB plan picks up most or all of the remaining balance.

However, this benefit depends on timely enrollment in Medicare Part B. In 2025, Medicare Part B comes with a standard monthly premium of $185 and a deductible of $257. Delaying Part B without a valid exception leads to lifetime penalties and significantly higher out-of-pocket costs.

Plans that coordinate with Medicare can reduce coinsurance costs for:

• Inpatient and outpatient hospital care

• Lab and imaging tests

• Mental health services

• Home health care

Watch the Out-of-Network Trap

One common pitfall retirees fall into is using out-of-network providers without realizing the financial consequences. Coinsurance rates for out-of-network care can double those of in-network care.

In 2025, PSHB plans maintain separate deductibles and out-of-pocket maximums for out-of-network services, which are typically much higher than in-network limits. If you travel or relocate in retirement, review your plan’s provider network before scheduling any procedures.

When Coinsurance Surprises Hit the Hardest

Retirees most often feel the sting of coinsurance in the following situations:

• Unexpected surgeries or specialist referrals

• Rehabilitation or physical therapy sessions

• Infusion treatments like chemotherapy or biologic medications

• Skilled nursing facility care

These services often require multiple sessions or prolonged care, where coinsurance accumulates steadily and significantly.

What You Can Do Right Now

Understanding coinsurance isn’t about avoiding care—it’s about preparing for the costs. Here’s how you can stay ahead:

• Check your 2025 PSHB plan brochure for coinsurance percentages by service type.

• Review your plan’s out-of-pocket maximums—this is your ceiling for cost-sharing in a year.

• Confirm your provider network status before every appointment, especially if you’re seeing a new specialist.

• Ask your provider for a cost estimate before agreeing to elective procedures.

• If eligible, enroll in Medicare Part B to lower your coinsurance burden.

Don’t Confuse Low Premiums with Low Out-of-Pocket Costs

It’s easy to be drawn to PSHB plans with lower monthly premiums, but these often come with higher coinsurance rates and deductibles. If you anticipate high medical usage in retirement, a plan with a higher premium but lower coinsurance may cost you less over the course of the year.

Also keep in mind: the government still pays around 70% of your total PSHB premium, regardless of plan. So choosing a slightly more expensive option that lowers coinsurance may be a smarter financial decision in the long run.

Annual Review: Your Best Defense

Retired postal workers are encouraged to revisit their PSHB options every year during Open Season, which takes place from November to December. This is your chance to:

• Switch to a plan with lower coinsurance rates

• Add or drop dependents

• Review how your plan coordinates with Medicare if you’re eligible

Failing to do this regularly could mean sticking with a plan that no longer suits your needs—or your budget.

Preparing for the Unexpected

Health needs can change rapidly in retirement. A sudden diagnosis, a fall, or even a scheduled surgery can quickly expose the true impact of coinsurance. Having a cushion in your retirement budget for healthcare expenses is smart, but so is choosing a plan that limits your exposure in the first place.

In 2025, understanding coinsurance isn’t optional—it’s essential to avoiding surprise bills and maintaining peace of mind.

Stay Informed and Take Action

Coinsurance may sound like just another line in your benefits handbook, but it directly affects your finances in retirement. Don’t wait until the bills pile up to realize what your plan actually covers. Instead, take the time to compare coinsurance levels, understand Medicare coordination, and evaluate your expected healthcare usage for the year ahead.

If you’re unsure what your plan covers or how Medicare enrollment may affect your out-of-pocket costs, get in touch with a licensed agent listed on this website for clear, personalized advice.