Key Takeaways

• Coinsurance under the Postal Service Health Benefits (PSHB) program can lead to higher-than-expected costs, depending on the plan, provider network, and Medicare coordination.

• Understanding deductibles, maximum out-of-pocket limits, and covered services is crucial to avoiding surprise medical expenses in 2025.

Why Are You Paying More Than Expected?

You signed up for a PSHB plan expecting to pay predictable healthcare costs. Then, a bill arrives showing a much higher charge than anticipated. What happened? It likely comes down to coinsurance—a cost-sharing structure that requires you to pay a percentage of the service cost instead of a fixed copayment. Let’s break it down so you can avoid sticker shock in 2025.

Understanding Coinsurance vs. Copayments

Your PSHB plan may require you to pay coinsurance instead of—or in addition to—copayments. Here’s the key difference:

• Copayments: A flat fee you pay for services (e.g., $30 for a doctor visit).

• Coinsurance: A percentage of the total cost (e.g., 20% of a hospital bill).

Coinsurance applies to a range of services, including hospital stays, specialist visits, and some prescriptions. Unlike copayments, which are predictable, coinsurance costs fluctuate based on the total charge for the service.

How Deductibles Affect Your Costs

Before your PSHB plan starts covering coinsurance, you typically must meet your annual deductible. In 2025, deductibles can range from a few hundred to several thousand dollars, depending on your plan.

• If your deductible is $500, you pay 100% of eligible expenses until reaching that amount.

• After meeting the deductible, coinsurance kicks in—meaning you’ll share costs with your plan instead of paying the full bill.

Without understanding your deductible, you might assume your plan covers more than it does early in the year, leading to unexpected bills.

Out-of-Pocket Maximums: Your Safety Net

Thankfully, PSHB plans have an out-of-pocket maximum, capping how much you spend annually on covered services. In 2025, these limits typically range from $7,500 to $15,000 for in-network care.

Once you hit this limit, your plan covers 100% of covered medical expenses for the rest of the year. But until then, you’re responsible for deductibles, copayments, and coinsurance.

How Coinsurance Stacks Up Over the Year

Many people overlook how quickly medical expenses add up. If you have a plan with a 20% coinsurance rate, a hospital bill of $10,000 means you’re responsible for $2,000—and that’s after meeting your deductible. Factor in multiple hospital visits, specialist appointments, and ongoing treatments, and those costs can reach the out-of-pocket maximum faster than expected.

The Impact of In-Network vs. Out-of-Network Care

PSHB plans encourage using in-network providers to minimize costs. If you go out-of-network:

• Your coinsurance percentage may be higher (e.g., 40% instead of 20%).

• Some services may not be covered at all.

• The provider may bill you for the full remaining balance beyond what your plan pays.

Always verify whether a provider is in-network before scheduling an appointment to avoid costly surprises.

What If an In-Network Provider Uses Out-of-Network Services?

Even if you visit an in-network hospital, you could still be billed for out-of-network services if the provider sends lab work, anesthesia, or imaging to an out-of-network facility. This is known as balance billing, and it can significantly increase your costs. To avoid this, always ask whether all aspects of your treatment are in-network.

Medicare Coordination: How It Lowers Your Costs

If you’re retired and enrolled in Medicare Part B, your costs under PSHB may be significantly lower. Many PSHB plans coordinate with Medicare, reducing or eliminating some cost-sharing expenses:

• Medicare pays first for covered services.

• Your PSHB plan pays second, often covering part or all of your coinsurance.

• Certain PSHB plans waive deductibles and lower coinsurance rates if you have Medicare Part B.

Without Medicare, you’ll shoulder a larger share of costs, making it crucial to review how your PSHB plan coordinates with Medicare before declining Part B.

What If You Decline Medicare Part B?

Some retirees opt out of Medicare Part B due to its monthly premium. However, this could mean paying significantly more in out-of-pocket costs for coinsurance and deductibles under PSHB. Weighing the cost of Medicare Part B against potential healthcare expenses is essential.

Prescription Drug Costs: Coinsurance and Tiers

PSHB plans categorize medications into tiers, affecting your coinsurance percentage. In 2025:

• Tier 1 (generic drugs): Low coinsurance (typically 10%-20%).

• Tier 2 (preferred brand-name drugs): Higher coinsurance (around 25%-35%).

• Tier 3 (non-preferred brand-name drugs): Highest coinsurance (up to 50%).

If your medication falls into a higher tier, you’ll pay more out-of-pocket. Checking your plan’s formulary and discussing alternatives with your doctor can help reduce costs.

How to Avoid High Drug Costs

• Opt for generics whenever possible.

• Use mail-order services for long-term medications.

• Check for manufacturer discounts and patient assistance programs.

Coinsurance for Hospital and Specialist Care

Some of the biggest out-of-pocket expenses come from hospital stays and specialist visits. Coinsurance rates vary by plan, but common charges include:

• Hospital admission: 10%-30% coinsurance per stay.

• Emergency room visit: 20%-35% coinsurance after the deductible.

• Specialist care: 25%-40% coinsurance per visit.

Reviewing these details ahead of time can prevent unexpected financial strain if a major medical event occurs.

Hidden Costs You Might Not Expect

Some medical services come with additional cost-sharing you might not anticipate, including:

• Diagnostic tests (MRIs, CT scans, lab work): Coinsurance applies, and prices vary widely.

• Physical therapy and rehabilitation: Often subject to higher coinsurance rates.

• Durable medical equipment (DME): Costs can be substantial, with 20%-50% coinsurance for wheelchairs, oxygen supplies, and more.

Checking your plan’s benefits guide before undergoing treatment can help you prepare for potential out-of-pocket expenses.

Steps to Avoid Coinsurance Surprises

To keep your healthcare costs manageable in 2025:

• Check your deductible status before scheduling services.

• Stay in-network whenever possible.

• Coordinate with Medicare Part B if eligible.

• Review your plan’s drug formulary to lower prescription costs.

• Understand prior authorization requirements to avoid denied claims.

These small steps can make a big difference in how much you pay out-of-pocket.

Making Informed Healthcare Decisions in 2025

Coinsurance can significantly impact your healthcare costs, but understanding how it works helps you plan ahead. Whether you’re an active postal worker or a retiree, taking the time to review your PSHB benefits now can prevent costly surprises later.

For expert guidance tailored to your situation, get in touch with a licensed agent listed on this website for professional advice.