Why Some Government Employees Pay More for Healthcare Than Others and How to Reduce Your Costs

Key Takeaways

• Your healthcare costs under the Postal Service Health Benefits (PSHB) program depend on factors like plan selection, Medicare enrollment, and cost-sharing structures.

• You can reduce your expenses by choosing a plan that fits your needs, coordinating with Medicare, and utilizing cost-saving features like wellness programs and in-network care.

Understanding Why Costs Vary Among Postal Workers and Retirees

When it comes to healthcare under the PSHB program, not all Postal workers and retirees pay the same amount. Even if you and a coworker have similar salaries, your healthcare costs could be drastically different. Several factors play into these variations, and understanding them can help you make better decisions to keep your costs manageable.

1. Plan Selection: Not All Options Are Created Equal

Your choice of health plan has a direct impact on how much you pay out of pocket. Some plans have lower monthly premiums but higher deductibles, while others might offer more comprehensive coverage with higher premium costs. Here’s what influences costs within different plans:

• Deductibles: Some plans require you to pay a certain amount before coverage kicks in fully.

• Copayments and Coinsurance: You may need to pay a fixed amount or percentage for doctor visits, hospital stays, or prescriptions.

• Out-of-Pocket Maximums: This is the cap on how much you will spend in a year before the plan covers 100% of costs.

If you don’t need frequent medical care, a plan with lower premiums but higher deductibles might be a better fit. However, if you anticipate significant healthcare expenses, a plan with higher premiums but lower out-of-pocket costs could save you money in the long run.

2. Medicare Enrollment: How It Affects Your Costs

If you’re a retiree and eligible for Medicare, your healthcare costs can vary based on whether you enroll in Medicare Part B. Under the PSHB program:

• If you enroll in Medicare Part B, some PSHB plans offer reduced deductibles and lower out-of-pocket costs.

• If you don’t enroll in Medicare Part B, you may face higher copayments and deductibles since your plan won’t coordinate with Medicare benefits.

For retirees, Medicare enrollment is often a significant factor in keeping healthcare costs down. If you’re approaching Medicare eligibility, review how different PSHB plans integrate with Medicare before making a decision.

3. Family Coverage vs. Self-Only Plans

Your choice between self-only, self-plus-one, or family coverage also impacts costs. While self-only coverage generally costs less, enrolling dependents significantly increases premium amounts.

• Self-Only: Covers just you, with lower monthly premiums.

• Self-Plus-One: Covers you and one dependent, often at a higher cost than self-only.

• Family Coverage: Covers multiple dependents and is the most expensive option.

Before choosing a plan, assess whether all family members need coverage under PSHB or if alternative options, such as a spouse’s employer-sponsored plan, may be more cost-effective.

4. In-Network vs. Out-of-Network Care

Your choice of healthcare providers can also affect your expenses. Many PSHB plans have a network of doctors, hospitals, and specialists who have agreed to lower rates.

• In-Network Providers: Visiting in-network doctors typically results in lower costs.

• Out-of-Network Providers: If you seek care outside your plan’s network, you may face significantly higher charges, as these providers are not bound by negotiated rates.

Before scheduling appointments, check if your provider is in-network to avoid surprise bills.

5. Prescription Drug Costs

Medication expenses can add up quickly, and different PSHB plans offer varying levels of prescription drug coverage. Some key cost factors include:

• Tiered Drug Pricing: Many plans classify medications into tiers (generic, preferred brand-name, non-preferred brand-name, specialty drugs), with different cost-sharing amounts for each.

• Mail-Order Savings: Some plans offer discounts if you use mail-order pharmacies instead of retail drugstores.

• Medicare Part D Coordination: If you’re a retiree enrolled in Medicare, your PSHB plan automatically includes prescription drug coverage under a Medicare Part D Employer Group Waiver Plan (EGWP), which can lower costs.

Review your medication needs and how they align with your plan’s formulary to keep expenses manageable.

Additional Factors That Influence Healthcare Costs

1. Geographic Location Matters

Where you live can influence the cost of your healthcare under PSHB. Different regions have varying healthcare costs, and plans may adjust premiums and provider networks based on regional expenses. If you live in an area with higher medical costs, your plan may have higher premiums or limited in-network provider options.

2. Health Status and Frequency of Care

Your health status plays a major role in your overall healthcare expenses. Those who require frequent medical care, specialist visits, or ongoing prescription medications will likely spend more, even with comprehensive coverage. Planning ahead and selecting a plan that aligns with your medical needs can help mitigate unexpected expenses.

3. Impact of Annual Adjustments in PSHB Plans

PSHB plans adjust their benefits, costs, and coverage terms annually. Changes in copayments, deductibles, and covered services could impact your overall spending. It’s important to review the Annual Notice of Change (ANOC) sent by your plan provider to stay updated on any modifications.

How to Lower Your Healthcare Costs

Now that you understand the reasons behind cost variations, here are some practical ways to reduce your expenses under PSHB.

1. Compare Plans During Open Season

Every year, you have the opportunity to review and change your PSHB plan during Open Season, which occurs from November to December. Take advantage of this period to:

• Compare plan premiums, deductibles, copayments, and out-of-pocket maximums.

• Consider how well each plan integrates with Medicare if you’re eligible.

• Assess whether your preferred doctors and medications are covered.

2. Enroll in Medicare Part B If You’re Retired

For retirees, enrolling in Medicare Part B can reduce healthcare costs in the long term. Some PSHB plans offer significant savings for Medicare enrollees, such as:

• Waived or reduced deductibles

• Lower copayments for doctor visits

• Improved prescription drug coverage

Weigh the cost of Medicare Part B premiums against potential savings before making a decision.

3. Use Preventive Care Benefits

Many PSHB plans offer free preventive care services like annual physicals, screenings, and vaccinations. Taking advantage of these benefits can help catch health issues early and reduce long-term medical costs.

4. Stay In-Network for Medical Services

Always check whether your doctors, specialists, and hospitals are in-network before scheduling appointments. Using out-of-network providers can lead to significantly higher charges.

5. Opt for Generic Medications

If you regularly take prescription drugs, ask your doctor whether a generic version is available. Generics are typically much cheaper than brand-name medications but offer the same effectiveness.

6. Take Advantage of Wellness Programs

Some PSHB plans include wellness incentives, such as:

• Discounts on gym memberships

• Cash rewards for completing health assessments

• Smoking cessation programs

Participating in these programs can not only improve your health but also lower your healthcare expenses.

Making Smart Healthcare Choices

Understanding why some Postal employees and retirees pay more for healthcare than others can help you take control of your costs. By carefully selecting your PSHB plan, coordinating with Medicare when applicable, and using cost-saving strategies, you can keep expenses manageable while ensuring you receive the care you need.

If you need guidance on choosing the right PSHB plan, speak with a licensed agent listed on this website to explore your options and make informed decisions about your healthcare coverage.