Key Takeaways

  • In 2025, your share of Postal Service Health Benefits (PSHB) premiums has increased again, and the trend suggests it may continue year after year unless broader changes are made.

  • Planning ahead for these growing costs is essential. Understanding how much you contribute monthly—and where those dollars go—will help you protect your overall household budget.

The Rising Cost of Your PSHB Share

If you’ve noticed that more of your paycheck or retirement annuity is going toward health insurance in 2025, you’re not imagining it. Your share of PSHB premiums has increased, and for many Postal Service employees and annuitants, these costs are climbing faster than wages or cost-of-living adjustments (COLAs).

This year, employee and retiree contributions to PSHB plans have grown due to inflation in the healthcare sector, rising prescription drug prices, and shifts in how plan costs are distributed. You’re paying more—but understanding why can help you respond more strategically.

What’s Driving the Cost Increases in 2025

Several underlying forces are contributing to your higher PSHB share in 2025:

1. Healthcare Inflation

Healthcare costs across the United States continue to rise, and that affects PSHB plans. Increases in provider fees, hospital services, specialist consultations, and new medical technologies all drive up the baseline cost of providing benefits.

2. Prescription Drug Spending

The average prescription drug cost has risen significantly. Even with the 2025 $2,000 cap on out-of-pocket drug expenses under Medicare Part D, the overall drug pricing trends still increase plan costs—and those costs are passed along to you.

3. Higher Government Cost-Sharing Percentages Remaining Static

While the government typically covers around 70% of the total PSHB premium, that percentage has not increased in line with total plan costs. As a result, the absolute dollar amount you’re responsible for continues to grow.

4. PSHB Transition Effects

2025 marks the full implementation of the PSHB system, replacing the FEHB for Postal Service workers and retirees. While the government contribution model remains largely intact, the administrative and structural changes associated with this transition may have temporarily increased costs.

5. Plan Utilization Patterns

When plan members use more services—especially high-cost services like emergency care or specialist visits—the plan’s expenses go up. These higher usage rates are reflected in rising premiums and out-of-pocket expenses.

Your Monthly Premium Share: What You’re Actually Paying

If you’re enrolled in a Self Only, Self Plus One, or Self and Family PSHB plan, your biweekly deductions are now higher than they were in 2024. For annuitants, your monthly pension deduction has also increased.

In 2025:

  • Annuitants are contributing over $240/month for Self Only plans.

  • For Self Plus One, you’re likely paying around $520/month.

  • For Self and Family, your share now exceeds $560/month.

These are not trivial amounts. They account for a significant share of many households’ fixed monthly expenses.

Don’t Ignore the Hidden Costs

Your premium is just the start. Out-of-pocket costs continue to pile on, including:

  • Copayments for primary and specialty care ($20–$60 on average)

  • Urgent care and emergency room visits ($50–$150 per visit)

  • Deductibles ranging from $350 to $2,000 depending on your plan type

  • Coinsurance costs as high as 30% for certain in-network services, and up to 50% out-of-network

These costs can accumulate quickly if you or a family member experiences a health event—even a minor one. Your total annual health costs are almost certainly more than your premiums alone.

How This Impacts Your 2025 Budget

You may already be feeling the pressure on your 2025 monthly budget. But it’s important to quantify the impact:

  • If your premium went up by $50 per month, that’s $600 more in annual healthcare costs.

  • Add in one emergency room visit, a few specialist appointments, and multiple prescriptions, and you could easily see $2,000–$3,000 in total annual spending—before even reaching your plan’s out-of-pocket maximum.

This level of spending deserves close attention, particularly if you are living on a fixed income or trying to manage rising costs elsewhere (utilities, groceries, or transportation).

Why You Can’t Count on Stability in the Future

You may hope that this year’s increase is a one-time adjustment—but the long-term trend shows otherwise. In fact, PSHB plan costs have been rising annually, and the upward trajectory is expected to continue unless:

  • Healthcare inflation slows (which is unlikely in the near term)

  • Prescription drug reform becomes more aggressive

  • Congress adjusts the government’s premium contribution formula

In the meantime, you should prepare for continued growth in your share of PSHB premiums and out-of-pocket expenses year after year.

Planning Ahead: What You Can Do Right Now

While you can’t stop PSHB costs from rising, you can take proactive steps to manage their impact:

Review Your Current Plan

Carefully read your 2025 PSHB plan brochure. Evaluate the balance of premiums versus out-of-pocket costs. A plan with a lower premium might carry higher deductibles or copays—and vice versa.

Estimate Your Total Health Spending

Don’t just look at premiums. Use last year’s claims and receipts to estimate how much you spent on care and medications. Add that to your current premium to understand your true annual cost.

Build a Monthly Healthcare Budget

Set aside a specific amount monthly for out-of-pocket expenses beyond your premium. Budgeting $100–$200/month for incidentals like copays, medications, or unplanned visits may help smooth out financial surprises.

Use Preventive Services

Take advantage of fully covered preventive care. Annual wellness visits, screenings, and immunizations may help catch health issues early and avoid high treatment costs later.

Consider a Flexible Spending Account (FSA)

If you’re still working, an FSA allows you to set aside pre-tax dollars for qualified medical expenses. While not available to retirees, this tool is valuable for active employees looking to reduce tax liability while covering rising healthcare costs.

Track Annual Changes

Monitor annual premium notices, and pay attention during Open Season each November–December. Use this window to reevaluate and potentially switch plans if another option suits your usage patterns better.

The Role of Medicare in Reducing PSHB Costs

If you’re eligible for Medicare in 2025, enrolling in Medicare Part B can significantly reduce your PSHB cost burden. Many PSHB plans coordinate with Medicare to lower out-of-pocket expenses, offering benefits such as:

  • Waived deductibles

  • Reduced copayments

  • Lower coinsurance percentages

  • Prescription drug coverage through a Medicare Part D EGWP plan, with a $2,000 annual out-of-pocket cap

However, enrolling in Medicare Part B also means paying an additional premium—$185/month in 2025. You’ll need to evaluate whether the lower cost-sharing offsets this added expense.

Keep in mind: if you’re a Postal Service annuitant and Medicare-eligible, enrollment in Part B may be required to keep your PSHB coverage, unless you qualify for one of the listed exceptions.

What to Watch for in the Rest of 2025

This year is pivotal. With the full transition to PSHB now in effect, some systems and processes are still settling. Expect updates on:

  • Clarification of PSHB benefits under Medicare coordination

  • Further notices about premium adjustments during future Open Seasons

  • Potential legislative action affecting cost-sharing formulas or premium structures

Staying informed helps you adapt, rather than react.

Protecting Your Budget Starts with Awareness

Your PSHB coverage is essential, but it’s also one of your biggest expenses in 2025. Ignoring rising costs won’t make them go away—and failing to plan for them can leave your household budget stretched or unprepared for a medical emergency.

Start by understanding what you’re paying now, estimate what you might pay in the months ahead, and take steps to soften the impact.

If you need help evaluating your plan options or understanding what changes might affect you in the next enrollment period, get in touch with a licensed agent listed on this website for professional advice tailored to your situation.