Key Takeaways

• Even though coinsurance under PSHB looks predictable on paper, your out-of-pocket expenses can climb quickly once you need extensive care.

• Understanding how coinsurance interacts with deductibles, copayments, and maximum out-of-pocket limits is essential before a health crisis occurs.

What Coinsurance Really Means Under PSHB

At first glance, coinsurance under the Postal Service Health Benefits (PSHB) program seems easy to grasp: you pay a percentage of the cost of care after meeting your deductible. Many enrollees feel reassured by the published figures—often in the 10% to 30% range for in-network services. But the reality gets more complicated once you actually start using the plan.

Unlike a fixed copayment, coinsurance is tied to the actual cost of services. That means your expenses rise with the intensity or complexity of care. For a routine office visit, coinsurance might seem like a minor charge. For an MRI, outpatient surgery, or extended hospitalization, however, it can result in thousands of dollars out of pocket—especially if you have not yet met your annual out-of-pocket maximum.

The Setup: Deductibles First, Then Coinsurance

Before coinsurance even kicks in, you must meet your plan’s deductible. Under PSHB in 2025, in-network deductibles for lower-tier plans typically range from $350 to $500 for Self Only coverage. High-deductible options may run from $1,500 to $2,000.

Until that deductible is satisfied, you bear the full cost of eligible care. Once met, coinsurance begins. At that point, you’re responsible for a set percentage of each bill. For example:

• A $2,000 imaging procedure at 20% coinsurance = $400 out of pocket

• A $7,500 outpatient surgery at 30% coinsurance = $2,250 out of pocket

And this doesn’t factor in any prior spending for labs, office visits, or medications.

How Quickly Costs Escalate in a Single Episode of Care

Coinsurance amounts may appear small individually, but they can snowball during a single treatment cycle. Consider what happens during:

• An emergency room visit followed by a hospital stay

• Post-surgery physical therapy over several weeks

• Ongoing specialist care for a chronic condition

You may be billed coinsurance multiple times: once for facility fees, again for the physician, again for anesthesia, again for radiology, and more. Each line item generates its own coinsurance charge. Within days, you’re juggling multiple medical bills.

Your Annual Out-of-Pocket Maximum Isn’t a Safety Net Until You Hit It

Every PSHB plan includes a maximum out-of-pocket (MOOP) limit. In 2025, this is often around $7,500 for Self Only and $15,000 for Self Plus One or Self and Family in-network. Once your total spending hits that ceiling, the plan covers all in-network services at 100% for the rest of the year.

But here’s the catch: until you reach that threshold, you’re paying full coinsurance and deductibles. And since most people don’t hit the MOOP in a typical year, the financial strain of several thousand dollars in coinsurance payments is very real.

In-Network vs. Out-of-Network: The Cost Divide Grows

PSHB plans offer lower coinsurance for in-network providers—typically 10% to 30%. Out-of-network care, by contrast, often comes with 40% to 50% coinsurance, if covered at all. That’s not including higher out-of-network deductibles and lack of balance billing protections.

If you see a specialist not in your plan’s network, you could face:

• Higher coinsurance rates

• Larger deductibles

• No cap on balance billing

• No guarantee that the MOOP limit applies

This makes it critical to confirm your provider is in-network before care begins.

Medicare-Eligible Annuitants: Lower Coinsurance but Only If Enrolled in Part B

If you’re a Medicare-eligible Postal Service annuitant enrolled in Part B, your PSHB plan may offer reduced coinsurance or even full coverage for many services. Some PSHB plans coordinate benefits with Medicare, leading to:

• Lower coinsurance or waived deductibles

• Minimal cost-sharing for hospital and outpatient care

• Better coverage for durable medical equipment and home health services

However, this only applies if you’re actually enrolled in Medicare Part B. If not, your PSHB plan treats you as a primary insured, and coinsurance applies in full. For many retirees, enrolling in Part B can significantly limit coinsurance exposure, especially during major care episodes.

How Prescription Drugs Fit Into the Coinsurance Equation

Coinsurance isn’t limited to medical services. Under PSHB’s integrated Medicare Part D Employer Group Waiver Plan (EGWP), prescription drug costs may also be subject to coinsurance—especially for brand-name or specialty drugs.

In 2025, once you exceed the initial coverage phase and reach the $2,000 out-of-pocket drug cap, your plan covers 100% of remaining drug costs for the year. But until you get there, you may still owe 25% or more for many prescriptions, depending on your plan’s formulary tier.

Understanding these coinsurance levels for medications is crucial, especially for:

• Chronic condition management (diabetes, hypertension, asthma)

• Specialty medications (cancer, autoimmune, hepatitis)

• Tier 3 and Tier 4 drugs

Why Coinsurance Surprises Happen Most Often with Diagnostic and Facility Fees

It’s not uncommon for people to expect a single bill after a procedure and instead receive several. That’s because coinsurance applies separately to:

• Physician’s professional services

• Facility or hospital use

• Laboratory and diagnostic tests

• Imaging services

• Anesthesia

• Post-operative care

Even if your surgery was in-network, one or more of the providers or services involved might be billed separately—and at different coinsurance rates. These bills often arrive weeks apart, creating confusion and financial stress.

Planning Ahead: What You Can Do Now to Minimize Shock Later

Coinsurance isn’t inherently bad. It shares costs between you and the plan, and it can help keep premiums in check. But you need to anticipate how it works in real-life medical scenarios.

Here’s how to prepare:

• Review your Summary of Benefits and Coverage (SBC) to understand what’s subject to coinsurance and what’s not.

• Know your deductible and out-of-pocket max—and how close you are to meeting them throughout the year.

• Ask for itemized estimates before major procedures. Hospitals and providers can give a breakdown of expected charges.

• Confirm all providers are in-network, especially in group settings or surgery centers.

• Track your medical expenses using your insurer’s app or online portal.

• Use preventive care benefits, which are often covered at 100% even before meeting the deductible.

How PSHB Differs from FEHB in Handling Coinsurance

While the PSHB system is modeled on the Federal Employees Health Benefits (FEHB) Program, there are differences worth noting, especially post-transition in 2025:

• PSHB coinsurance rates are comparable to FEHB, but provider networks may differ.

• PSHB plans may offer enhanced coordination with Medicare compared to FEHB.

• Coinsurance terms may be impacted by the plan’s design as a postal-specific product.

This makes it even more important to review the PSHB plan brochure during Open Season (November to December each year), especially if you were previously covered under FEHB.

Don’t Rely on Premiums Alone—Coinsurance Can Make or Break Your Costs

It’s tempting to pick a PSHB plan based on monthly premiums. But that number only tells part of the story. A lower-premium plan may carry higher coinsurance or deductibles. If you end up needing moderate to extensive care, your total annual costs could far exceed what you would have paid under a slightly higher-premium, lower-cost-sharing option.

When comparing plans:

• Look beyond premiums to total expected cost of care

• Consider your own risk tolerance and likelihood of needing care

• Review how the plan handles coinsurance for services you use frequently

Getting Real About What You’ll Pay When Care Isn’t Routine

Coinsurance doesn’t feel like a burden when you’re healthy. But if you need surgery, develop a chronic illness, or require a hospital stay, it can quickly dominate your healthcare spending.

For example, just three services—imaging, outpatient surgery, and post-care rehab—can result in coinsurance bills that rival your annual premium. Multiply that by a family member or recurring condition, and the numbers add up fast.

So if you’ve been assuming coinsurance under PSHB is a background issue, it’s time to reframe your thinking.

What You Can Do Before You Choose a PSHB Plan

You’re not stuck with your current plan forever. Each year during Open Season, you can review all available PSHB options and make a change.

Before making your decision:

• Read the plan’s official brochure, paying close attention to the sections on cost-sharing and coinsurance

• Calculate your estimated yearly costs based on your current health needs

• Compare coinsurance levels for key services such as hospital care, diagnostics, and specialty visits

• If you’re Medicare-eligible, factor in whether you’re enrolled in Part B and how your PSHB plan coordinates with it

Take the Time to Evaluate Coinsurance Before It Becomes Your Reality

Coinsurance is a crucial cost-sharing mechanism, but its effects are often underestimated until care is needed. Don’t wait for a surprise bill to learn how your plan works. Review your PSHB coinsurance terms now, while you’re healthy and have the chance to choose a better-fit plan during Open Season.

If you need help understanding your current coverage or choosing a plan that fits your care needs, reach out to a licensed agent listed on this website for personalized guidance.