Key Takeaways

• Coinsurance under PSHB plans can result in significant out-of-pocket costs, especially if you’re managing ongoing or unexpected medical needs in retirement.

• Understanding your plan’s percentage-based cost-sharing and annual limits is essential to avoid budget surprises.

Why Coinsurance Matters More Than You Think

When you first transition into retirement, you’re often focused on premiums and provider access. But for those enrolled in Postal Service Health Benefits (PSHB) plans, coinsurance can quietly become one of the most impactful elements of your healthcare costs.

Coinsurance refers to the percentage of costs you pay for covered medical services after you meet your deductible. Unlike a fixed copayment, coinsurance leaves your costs open-ended—especially if you require frequent or specialized care.

For 2025, coinsurance under PSHB plans typically ranges from 10% to 30% for in-network services and can reach 40% to 50% for out-of-network care. These percentages add up quickly.

How Coinsurance Interacts With Other Cost Elements

Understanding coinsurance in isolation won’t give you the full picture. It must be evaluated alongside deductibles, copayments, and out-of-pocket maximums.

Deductibles

You must meet your deductible before coinsurance kicks in. Depending on the plan you select, this could be anywhere from $350 to $2,000 annually for in-network care.

Copayments vs. Coinsurance

While copayments are fixed fees for things like office visits or urgent care, coinsurance applies to a broader set of services, including hospital stays, surgeries, and diagnostic imaging. Once your deductible is met, coinsurance begins applying—usually without a predictable dollar amount.

Out-of-Pocket Maximums

Each PSHB plan sets an annual limit on what you’ll pay for covered services. For 2025, this is often around $7,500 for Self Only and $15,000 for family coverage in-network. Out-of-network limits are higher, sometimes by thousands.

Coinsurance Scenarios That Can Escalate Costs

Coinsurance becomes particularly costly in several common healthcare scenarios:

• Hospitalizations – A multi-day hospital stay can cost tens of thousands. Even a 20% coinsurance means you’re responsible for thousands of dollars.

• Surgical Procedures – Outpatient or inpatient surgeries, including anesthesia and follow-up visits, are typically subject to coinsurance.

• Specialist Services – Cancer treatment, cardiology, orthopedics, and similar specialties usually fall under coinsurance after deductible.

• Emergency Services – Emergency room visits can incur higher coinsurance rates and additional costs if the facility or provider is out-of-network.

• Physical Therapy and Rehab – Ongoing treatments can lead to high cumulative costs, especially when each session incurs a percentage-based fee.

Medicare and Coinsurance Under PSHB

If you’re eligible for Medicare, coordinating your PSHB plan with Medicare Part B can reduce your coinsurance burden. In fact, many PSHB plans offer lower coinsurance when Medicare is primary.

This coordination can include:

• Waived or reduced deductibles

• Lower coinsurance percentages

• Enhanced prescription drug coverage

However, to receive these benefits in 2025, you must generally be enrolled in both Medicare Part A and Part B. Some annuitants are exempt, but others must comply or risk losing these favorable terms.

In-Network vs. Out-of-Network: A Cost-Defining Decision

Where you receive care matters greatly under PSHB. In-network services not only cost less in general but also offer lower coinsurance rates and count toward in-network out-of-pocket maximums.

In-Network Advantages

• Typically 10%-30% coinsurance

• Predictable billing

• Lower deductible thresholds

• Coordination with Medicare if applicable

Out-of-Network Risks

• Coinsurance may reach up to 50%

• Services may not count toward in-network maximums

• Surprise billing potential

• Higher upfront costs

Even if your provider accepts your insurance, they may not be part of your plan’s network. Always confirm in-network status to avoid unexpected charges.

How to Estimate Your Coinsurance Costs in 2025

You can’t predict every medical need, but you can estimate potential coinsurance liability by reviewing the following:

• Your PSHB plan brochure’s summary of benefits

• Your past 2-3 years of healthcare usage

• Medicare coordination (if applicable)

• Your plan’s deductible and out-of-pocket maximum

Use these to model scenarios such as:

• One emergency room visit

• Two specialist consultations and follow-up labs

• One diagnostic scan (MRI or CT)

• Prescription refills under Part D coordination

These scenarios will show how quickly coinsurance accumulates, even for relatively moderate care.

What Happens After You Hit Your Maximum

The good news: Once you reach your out-of-pocket maximum, your plan pays 100% for covered in-network services for the rest of the year. But hitting this maximum—especially in the early part of the year—means you’ve already spent thousands.

Plans with lower deductibles typically have higher monthly premiums. Plans with higher deductibles and coinsurance often feature lower premiums but can lead to greater costs if your health changes suddenly.

Questions to Ask Before Finalizing Your Plan

Before locking in your PSHB coverage, take time to understand how coinsurance fits your health and financial profile. Ask yourself:

• Can I afford 20% of a major hospital bill?

• What was my out-of-pocket spend last year?

• Will I enroll in Medicare Part B to help reduce coinsurance?

• How does my plan calculate out-of-network costs?

• What services are subject to coinsurance, and which use flat copays?

These questions can help you avoid making assumptions that lead to unexpected costs.

Tools and Resources to Break It All Down

You’re not expected to calculate all this by hand. Here are tools that help you get accurate information:

• Plan Brochures – Include clear coinsurance tables for different services

• OPM PSHB Comparison Tool – Lets you compare cost-sharing across multiple plans

• Medicare Coordination Guides – Some PSHB plans publish guides specifically for Medicare-eligible members

• Help Lines – PSHB Navigator Help Line and others can clarify what’s covered and what isn’t

Avoiding Sticker Shock Later Starts With Careful Review Now

The timing of when you review your plan makes a difference. PSHB Open Season typically runs from November to December. That’s your only guaranteed chance each year to make changes unless you experience a qualifying life event.

Don’t wait until claims start piling up in January or February to realize how coinsurance works under your chosen plan.

Start your review early, take notes, and if something seems unclear, don’t guess—ask.

Don’t Let Coinsurance Surprise You in Retirement

Coinsurance isn’t inherently bad—it’s a normal part of health insurance. But under PSHB plans, its cost impact can be far greater than many retirees anticipate. Understanding your plan’s coinsurance terms and comparing them thoughtfully is key to managing your retirement healthcare expenses wisely.

If you’re unsure about how coinsurance will affect you personally, reach out to a licensed agent listed on this website. They can walk you through your options and ensure you’re choosing coverage that aligns with both your healthcare needs and financial situation.