Key Takeaways

  • Your monthly PSHB contribution is only part of the total cost you’re paying. Other charges like deductibles, coinsurance, and copayments can significantly increase your out-of-pocket burden.

  • Many postal workers assume that the government covers most of their PSHB costs, but in 2025, annuitants are paying hundreds per month depending on plan and tier—costs that add up quickly if you’re not paying attention.

Understanding the Real Cost of PSHB in 2025

The Postal Service Health Benefits (PSHB) program replaced FEHB coverage for USPS employees and retirees starting January 1, 2025. While the program promises tailored benefits, many of the financial obligations have shifted to the individual enrollee, especially for retirees.

Your contributions aren’t just about the premium you see deducted from your annuity or paycheck. They extend well beyond that. When you take into account all the actual costs of healthcare—your share of premiums, out-of-pocket expenses, and cost-sharing mechanisms—the total can be far more than you initially realize.

What You’re Actually Contributing Each Month

In 2025, annuitants in the PSHB program are contributing monthly amounts that vary based on coverage type:

  • Self Only: Over $240/month

  • Self Plus One: Over $520/month

  • Self and Family: Over $560/month

These amounts represent your share after the government’s contribution. That contribution covers about 70% of the total premium, but that still leaves you with a sizable share—especially if you’re covering a spouse or children.

It’s Not Just the Premium—Here’s What Else You Pay

Even after paying your monthly premium, you’re still responsible for other expenses that can add up quickly. These include:

Deductibles

  • In-network deductibles can range from $350 to over $1,500 depending on the plan type.

  • Out-of-network deductibles can be as high as $3,000.

Copayments

  • Primary care visits: $20–$40

  • Specialist visits: $30–$60

  • Urgent care: $50–$75

  • Emergency room: $100–$150

Coinsurance

  • You typically pay 10% to 30% of in-network service costs.

  • Out-of-network coinsurance can be as high as 50%.

When you add these figures to your monthly premium, the true cost of staying healthy under PSHB becomes much more apparent.

Medicare Integration: A Double-Edged Sword

If you are Medicare-eligible and enrolled in Medicare Part B, many PSHB plans will offer extra benefits like reduced cost-sharing and drug cost savings. Some plans even waive the deductible. However, this also means paying an additional $185/month in 2025 for Part B premiums.

Those who are not enrolled in Medicare Part B may face higher out-of-pocket costs under PSHB, especially for services that Medicare would otherwise cover. So you’re either paying more upfront (with Medicare) or potentially more later (without it).

Your Costs Over Time

Consider this: if you’re paying over $240/month just for a Self Only plan, that’s $2,880 a year. Add in a deductible, copayments, and any coinsurance, and you could easily hit $4,000–$6,000 annually. For families, that number can double or even triple.

And since premiums and other plan costs tend to rise each year, your contribution today could be much lower than what you’ll be paying a few years from now.

You Might Be Overpaying Without Realizing It

Because many enrollees are automatically enrolled in a default PSHB plan (especially if they didn’t actively make a selection during Open Season), they might be in a more expensive or less suitable plan than they need.

Reviewing your plan options every Open Season is critical. You can:

  • Compare costs across different plan tiers.

  • Evaluate benefits for your current healthcare needs.

  • Factor in Medicare enrollment status.

  • Look into whether the plan includes Part B premium reimbursement.

Tiered Coverage Isn’t One-Size-Fits-All

It’s common to select a “Self and Family” plan thinking it covers more dependents for a better price. But sometimes, switching to “Self Plus One” (if applicable) may cut your costs. Also, in cases where dependents are no longer eligible (e.g., children aging out), you might be paying extra unnecessarily.

Make sure your current tier reflects your actual household situation. It’s a simple switch that could save you hundreds over the year.

Prescription Drug Coverage: A Closer Look

In 2025, your PSHB prescription coverage for Medicare-eligible enrollees is integrated through a Medicare Part D Employer Group Waiver Plan (EGWP). This comes with:

  • A $2,000 out-of-pocket cap for prescription drugs.

  • A $35 insulin copay cap.

  • The ability to spread costs throughout the year via the Medicare Prescription Payment Plan.

But if you’re not Medicare-eligible or opted out, your out-of-pocket costs can be much higher—especially if you’re dealing with brand-name or specialty drugs.

Why Plan Costs Keep Rising

Healthcare costs are increasing nationwide, and PSHB plans are not immune. Rising drug prices, provider charges, and administrative expenses all contribute to annual premium hikes.

In 2025, PSHB plan enrollees saw average premium increases over 13% compared to 2024. These increases tend to disproportionately impact retirees, many of whom are on fixed incomes.

Hidden Costs You Shouldn’t Ignore

There are also less visible costs that may be draining your finances:

  • Out-of-network care: Even a single visit can cost significantly more.

  • Specialist referrals: Some plans require pre-authorization, which delays care and may lead to uncovered expenses.

  • Non-covered services: Some therapies, medical devices, or elective procedures aren’t covered at all.

Knowing what your plan doesn’t cover is just as important as knowing what it does.

What You Can Do Right Now

To better control your healthcare spending under PSHB:

  • Log into your enrollee portal and review your current plan details.

  • Check for your most recent benefit usage and out-of-pocket totals.

  • Compare your plan’s 2025 brochure to others available.

  • Consider calling a licensed insurance agent listed on this website to walk through your options.

A small change in plan selection or Medicare integration could lead to major savings.

Rethinking What You’re Really Paying For

Many postal workers and retirees view PSHB as a fixed monthly expense. But in truth, it’s a dynamic cost made up of multiple components. Your monthly deduction is just the starting point.

Understanding the complete picture—premium contributions, cost-sharing, and service limitations—empowers you to make informed decisions and possibly save thousands every year.

Don’t wait until the next Open Season to get clarity. Start now. Take action today to make sure your PSHB plan actually fits your budget and your health needs. Speak with a licensed insurance agent listed on this website to ensure you’re not paying more than necessary.