Key Takeaways

• Your healthcare costs under the Postal Service Health Benefits (PSHB) program are rising in 2025, with increases in premiums, deductibles, and out-of-pocket expenses.

• The transition from the Federal Employees Health Benefits (FEHB) program to PSHB brings new coverage rules, especially if you are a retiree or nearing Medicare eligibility.

How PSHB Costs Are Changing in 2025

As a postal worker or retiree, you are probably already feeling the impact of rising healthcare costs. With the shift to the Postal Service Health Benefits (PSHB) program, these changes are more pronounced than ever. Understanding the increases in your premiums, deductibles, and out-of-pocket costs is essential for making informed decisions about your healthcare coverage.

Higher Premiums for Postal Employees and Retirees

Whether you are still working or retired, your monthly premiums under PSHB have increased compared to the previous FEHB structure. While government contributions still cover a significant portion of your healthcare costs, your share of the premiums has risen. Here’s what to keep in mind:

• Active postal employees will see their premium contributions adjusted, with many paying more out of pocket.

• Annuitants (retirees) have a separate premium structure, and the costs may be higher if you do not have Medicare Part B.

• Self Plus One and Family plans are experiencing some of the largest premium increases.

• Biweekly and monthly contributions have changed, making it essential to check your payroll deductions and budget accordingly.

• Premium rate adjustments vary based on plan selection, so reviewing your options is crucial to managing expenses.

• Premium increases may outpace cost-of-living adjustments, leading to a greater financial burden for retirees on a fixed income.

Deductibles and Out-of-Pocket Maximums Are Increasing

Your annual deductible—the amount you must pay before your plan starts covering costs—has gone up in 2025. The same applies to out-of-pocket maximums, which set a cap on how much you spend for covered services. These changes mean you could be paying more for healthcare services before reaching your plan’s cost-sharing benefits.

Expect to see:

• Higher in-network deductibles before coverage begins.

• Increased out-of-pocket maximums, making it more expensive if you need significant medical care.

• Rising coinsurance rates, meaning a greater share of costs comes out of your pocket after the deductible is met.

• Higher copays for urgent care and hospital stays, leading to greater out-of-pocket spending when seeking medical attention.

• New tiered cost structures for prescriptions, making it more important to check which medications are covered at lower cost-sharing levels.

Changes in Cost Sharing for Common Services

In addition to premium hikes, many postal employees and retirees will see adjustments in cost-sharing amounts for common medical services. Here are some of the key areas where you may notice a difference:

• Primary Care Visits – Copayments have increased for doctor visits, even for in-network providers.

• Specialist Visits – Higher copays or coinsurance rates apply to specialist appointments.

• Emergency Room Visits – Expect to pay more when seeking emergency medical treatment.

• Prescription Drug Costs – If you take regular medications, your out-of-pocket expenses may rise, especially if you haven’t enrolled in Medicare Part D.

• Preventive Services – Some screenings and vaccinations may still be fully covered, but others might come with a cost.

• Telehealth Services – While some plans offer virtual visits at a reduced rate, others may require standard copayments or higher costs for specialist consultations.

What Medicare-Eligible Retirees Need to Know

If you are a retired postal worker eligible for Medicare, your costs and coverage options are changing significantly under PSHB. One of the most important factors is whether you are enrolled in Medicare Part B.

Enrollment in Medicare Part B Matters

• If you retired on or before January 1, 2025, you are not required to enroll in Medicare Part B, but doing so can help lower your overall costs.

• If you retire after January 1, 2025, you must enroll in Medicare Part B to maintain your PSHB coverage.

• Medicare integration can help reduce deductibles and copays, but it requires additional monthly premiums for Part B.

• Failing to enroll in Part B when required may result in penalties and loss of access to certain PSHB benefits.

• Medicare and PSHB coordination may provide additional savings, but plan-specific details should be reviewed carefully.

Prescription Drug Coverage Adjustments

For Medicare-eligible retirees, PSHB includes prescription drug coverage under a Medicare Part D Employer Group Waiver Plan (EGWP). While this may reduce overall medication costs, it also means your plan follows Medicare’s rules for drug pricing and coverage.

• Higher drug deductibles mean you’ll pay more before coverage kicks in.

• Formulary changes may impact whether certain medications are covered.

• Mail-order and pharmacy options could help lower costs, but availability varies.

• Tiered pricing structures could mean some medications require higher copayments.

Additional Costs That Could Impact Your Budget

Beyond premiums and deductibles, several other factors could affect your healthcare expenses:

• Out-of-network costs – If you receive care from providers not in your PSHB network, you could face much higher charges.

• Medical equipment and supplies – Some items, like CPAP machines or wheelchairs, may have higher cost-sharing requirements.

• Specialty care referrals – If you need specialized treatments, your plan may require referrals and additional approvals, adding to your costs.

• Long-term care coverage – PSHB does not typically cover extended nursing home stays, which could be an out-of-pocket expense for retirees.

• Dental and vision care limitations – While some supplemental benefits exist, they may not be as comprehensive as private plans.

• Coverage gaps for dependents – If you have family members on your plan, review whether they remain eligible for the same level of benefits.

Preparing for the Financial Impact

With healthcare costs rising, planning ahead is more important than ever. Here’s what you can do to prepare:

• Review your plan details – Understand what’s changing in your specific PSHB plan and how it impacts your budget.

• Consider Medicare Part B – If you’re nearing retirement, evaluate whether enrolling in Medicare Part B makes sense for your financial situation.

• Budget for higher costs – Factor in increased premiums, deductibles, and copays when planning your expenses for the year.

• Explore cost-saving options – Some plans offer incentives, wellness programs, or flexible spending accounts that could help lower your costs.

• Check provider networks – Ensure that your preferred doctors and hospitals remain in-network to avoid additional charges.

• Take advantage of preventive care – Using fully covered screenings and wellness visits can help catch health issues early and reduce long-term costs.

• Compare alternative plan options – Some PSHB plans offer different levels of coverage, so evaluating multiple choices could help you find a more affordable option.

What You Should Do Next

Healthcare costs are rising for postal employees and retirees, and it’s crucial to stay informed about how these changes affect you. If you’re uncertain about your best options under PSHB, speaking with a professional can help. Get in touch with a licensed agent listed on this website to discuss your coverage choices and ensure you’re making the right decisions for your healthcare needs.