Key Takeaways

  • Comparing FEHB and PSHB based solely on premiums or deductibles misses critical details like Medicare integration, prescription drug coverage, and eligibility requirements that can significantly alter your total out-of-pocket costs.

  • The PSHB program introduces structural changes in 2025 that shift how and when you pay for care, which means evaluating only monthly contributions won’t give you the full financial picture.

Looking at Monthly Premiums? That’s Only Step One

It’s understandable to start your PSHB plan comparison by looking at monthly premiums. After all, those are the amounts deducted from your annuity or paycheck every month. But if that’s where your evaluation begins and ends, you’re walking into a trap. The real cost of your health coverage goes far beyond what you pay upfront.

Premiums represent only a portion of your total health spending. A plan with a low monthly cost might come with higher deductibles, coinsurance, or fewer Medicare integration benefits, which can leave you paying significantly more throughout the year.

PSHB Is Built to Work with Medicare

Starting in 2025, the Postal Service Health Benefits (PSHB) Program replaces FEHB for USPS workers and retirees. Unlike the FEHB program, PSHB is explicitly designed to integrate with Medicare Part B. This change creates two vastly different cost structures depending on your Medicare enrollment status.

If you’re a Medicare-eligible annuitant or covered family member and don’t enroll in Part B (and aren’t exempt), your PSHB plan might not cover the same services or offer the same cost-sharing reductions that would apply with Medicare integration. That shifts more of the cost burden onto you.

So, comparing PSHB plans by premiums alone, without considering whether you or your spouse will enroll in Part B, gives an incomplete and potentially misleading cost comparison.

Deductibles and Cost-Sharing Tell the Real Story

In-network deductibles for PSHB plans in 2025 typically range from $350 to $500 for standard plans. But some high-deductible options can climb to $1,500 or more. Out-of-network deductibles can run into the thousands.

Now compare that to how these costs are reduced or even waived when you are enrolled in both PSHB and Medicare Part B. Some PSHB plans offer:

  • Waived deductibles when Medicare is primary

  • Reduced or no copayments for Medicare-covered services

  • Lower coinsurance for hospitalization and specialist care

Without these Medicare tie-ins, your share of costs could increase significantly over time. That’s why looking only at the base premium isn’t just incomplete—it can lead to costly decisions.

Pharmacy Benefits Aren’t Equal Across the Board

Under PSHB, prescription drug coverage is integrated with Medicare Part D for Medicare-eligible enrollees. If you’re enrolled in both PSHB and Medicare, you automatically receive Part D coverage through an employer group waiver plan (EGWP). This comes with a major 2025 upgrade: a $2,000 annual cap on out-of-pocket prescription drug costs.

But if you’re not Medicare-eligible or you decline Part B, this cap does not apply. You’re still subject to the PSHB plan’s internal drug tiers, copays, and annual limits. And those can vary widely depending on the plan structure.

So again, two people paying the same monthly premium could end up with vastly different pharmacy costs depending on Medicare enrollment. That makes direct comparisons by premium alone highly misleading.

The Penalty of Ignoring Medicare Part B

The PSHB program introduces new Medicare Part B enrollment requirements. In 2025 and beyond, Medicare-eligible USPS annuitants and family members must enroll in Part B to maintain full PSHB benefits, unless they meet one of the following exemptions:

  • Retired on or before January 1, 2025

  • Aged 64 or older as of January 1, 2025

  • Living abroad permanently

  • Receiving care through VA or Indian Health Services

Failing to enroll when required can result in loss of cost-sharing benefits or even prescription drug coverage. This dramatically shifts your out-of-pocket exposure, and yet this factor is completely invisible when you only compare premiums.

Copayments That Appear Modest Can Accumulate Fast

PSHB copayments in 2025 typically range from:

  • $20 to $40 for primary care

  • $30 to $60 for specialists

  • $50 to $75 for urgent care

  • $100 to $150 for ER visits

These figures can seem manageable when viewed individually. But if you’re managing a chronic condition or seeing multiple providers throughout the year, these costs can compound quickly. Especially if you’re not enrolled in Medicare Part B, which would otherwise absorb a large portion of these charges.

Evaluating plan affordability based only on a monthly contribution ignores how frequently you’ll use services, what the plan pays versus what you owe, and whether Medicare offsets are applied. It’s a surface-level comparison that misses what you’ll really spend.

In-Network vs. Out-of-Network Exposure

Many PSHB plans offer 10% to 30% coinsurance for in-network services. But out-of-network care often incurs 40% to 50% coinsurance, with separate and much higher deductibles—ranging from $1,000 to $3,000.

This becomes critical for those who live in rural or underserved areas, where access to in-network providers is more limited. If your preferred specialists or facilities are out-of-network, your exposure increases significantly, even with what looks like a reasonable monthly premium.

When comparing plans, don’t overlook how the network structure affects actual usage. A plan might have a great rate on paper but end up far more expensive if you’re consistently pushed outside the preferred provider network.

Lifetime Value vs. Monthly Savings

In 2025, PSHB plans can look attractively priced for healthy individuals who rarely visit the doctor. But if you or your spouse becomes ill or develops a chronic condition, the long-term costs will matter far more than the $30 to $50 per month you might have saved on premiums.

Plans with better Medicare coordination, prescription drug protection, and lower out-of-pocket maximums typically offer more sustainable financial protection. Consider what each plan does for you across multiple years, not just this year’s paycheck.

A short-term view that prioritizes lower premiums can expose you to:

  • Higher long-term prescription costs

  • Steep specialist and hospital fees

  • Minimal coverage if Medicare Part B is skipped

This is especially true as you age and your healthcare needs evolve. The plan that looks inexpensive at age 58 might be unaffordable by 65 without the right Medicare integration.

Out-of-Pocket Maximums Are the True Ceiling

In 2025, PSHB plans have in-network out-of-pocket maximums capped at $7,500 for Self Only and $15,000 for Self Plus One or Self and Family.

But here’s where Medicare makes a critical difference: if you are enrolled in both Medicare and PSHB, many services are paid by Medicare first, meaning you’re less likely to hit those ceilings at all. If you’re not enrolled, you could quickly hit the maximum from a single hospitalization or major procedure.

This underscores how premium comparisons don’t reflect total risk. One plan might save you a few hundred dollars a year in contributions but expose you to thousands more in actual expenses if you forego Medicare.

Timing Is Everything: 2025 and Beyond

The PSHB transition is not just a policy change; it’s a structural shift with long-term implications. Here are key 2025 timelines you need to keep in mind:

  • PSHB plans take effect on January 1, 2025

  • Medicare-eligible annuitants must enroll in Part B (unless exempt) to maintain full PSHB benefits

  • Open Season for making changes is typically from November to December each year

Failing to evaluate your options during this window, or ignoring Medicare enrollment deadlines, can cost you both coverage and financial security.

It’s Not Just a Health Plan. It’s a Financial Decision

Every PSHB plan is a blend of premium, coverage, cost-sharing, and Medicare integration. Treating it like a simple commodity based on price is a mistake.

Your best approach is to:

  • Review the entire Summary of Benefits for each plan

  • Check the plan’s treatment of Medicare Part B enrollees

  • Understand drug coverage tiers and caps

  • Evaluate your own health needs for the year ahead

  • Factor in family members’ eligibility and coverage

When you make your comparison this way, cost becomes one of several important metrics—not the only one.

Your Healthcare Costs Deserve More Than a Price Tag

If you’re used to shopping by price, the PSHB landscape may feel more complex than expected. That’s because it is. And if you want to protect your health and finances in the years to come, that complexity deserves your attention.

Don’t let a low premium fool you into a false sense of affordability. Instead, take the time to understand how your total costs will unfold over the year—with or without Medicare. If you’re unsure about which PSHB plan fits your situation, get in touch with a licensed agent listed on this website for advice tailored to your needs.