Key Takeaways

  • Even when Medicare Part B covers a service, you are responsible for deductibles, coinsurance, and potentially excess charges.

  • Pairing PSHB with Medicare Part B in 2025 can help reduce costs but does not eliminate all out-of-pocket expenses.

Why Medicare Part B Coverage Is Not Truly “Free”

When you enroll in Medicare Part B in 2025, you gain coverage for medically necessary services like doctor visits, preventive screenings, outpatient surgeries, and durable medical equipment. However, “coverage” does not mean “free.” Every time you access healthcare under Part B, you face certain costs that can add up more quickly than many postal retirees and workers anticipate.

You should be prepared for multiple types of charges beyond the monthly premium, including the annual deductible, coinsurance, and, in some cases, excess charges if your provider does not accept Medicare assignment.

Understanding the 2025 Medicare Part B Deductible

The first cost you encounter each year is the Part B deductible, which stands at $257 in 2025. Before Medicare starts paying its share, you must meet this deductible out-of-pocket.

Key points to remember:

  • The deductible applies once per year, not per service.

  • Only covered Part B services count toward meeting your deductible.

  • Some preventive services may be exempt from the deductible.

Once you meet the deductible, Medicare generally pays 80% of the approved amount, leaving you responsible for the remaining 20%.

The Impact of 20% Coinsurance on Routine and Unexpected Visits

Coinsurance is the next layer of out-of-pocket cost. After you meet the deductible, you pay 20% of the Medicare-approved amount for most services.

Here is how it plays out:

  • A primary care visit for an ongoing condition results in a 20% charge based on the Medicare-approved rate.

  • A diagnostic test like an MRI also triggers a 20% coinsurance responsibility.

  • Durable medical equipment, such as walkers or oxygen supplies, falls under the same 20% rule.

Given the rising cost of healthcare services, even 20% coinsurance can create noticeable financial pressure if you have frequent appointments or require specialized care.

What Happens If Your Provider Does Not Accept Medicare Assignment

Most healthcare providers who work with Medicare accept what is called “assignment,” meaning they agree to accept Medicare’s approved amount as full payment.

However, some providers do not accept assignment. When this happens:

  • The provider can charge up to 15% more than the Medicare-approved amount.

  • This extra charge is called an excess charge.

  • You are responsible for paying the excess amount out of pocket, and Medicare does not reimburse it.

Excess charges can be especially painful if you see specialists or undergo procedures where the provider does not participate fully with Medicare.

Preventive Services and No-Cost Visits: What’s Actually Included

Medicare Part B does cover many preventive services at no cost to you if the provider accepts assignment. This includes:

  • Annual wellness visits

  • Certain vaccines (such as flu and COVID-19 shots)

  • Screenings for cancer, diabetes, and cardiovascular conditions

However, be cautious:

  • If the doctor performs additional tests or services during your preventive visit that are not considered preventive, you could face coinsurance.

  • Some services require meeting specific Medicare eligibility criteria to qualify for full coverage.

Thus, “free” visits sometimes result in bills if the appointment expands beyond basic preventive care.

Costs That Add Up Over a Year

Many postal retirees and workers underestimate how frequent healthcare use accumulates costs over a calendar year. While individual visits might not seem expensive, cumulative costs include:

  • Multiple specialist visits

  • Diagnostic imaging (MRIs, CT scans, ultrasounds)

  • Outpatient surgeries

  • Mental health counseling

  • Physical therapy sessions

Each of these services means another 20% coinsurance charge after meeting the deductible, creating potential for significant year-end medical spending.

How PSHB Plans Help—and Where They Do Not

Postal Service Health Benefits (PSHB) plans coordinate with Medicare Part B to help limit your financial exposure.

Here’s how PSHB plans assist:

  • Many PSHB plans waive or reduce deductibles if you enroll in Medicare Part B.

  • They often cover the remaining 20% coinsurance that Medicare leaves you with.

  • Some plans offer lower copays for services after Medicare has paid its share.

But even with PSHB integration:

  • You must still pay the Part B monthly premium.

  • Some services or providers might still trigger out-of-pocket costs if they are out-of-network or if charges exceed Medicare-approved amounts.

  • Prescription drugs are covered separately, often under a Medicare Part D or integrated plan, with their own deductibles and coinsurance rules.

Timeline: How Costs Unfold Over the Year

Understanding the timeline of costs can help you plan:

  • January 1: Annual deductible resets ($257 for 2025).

  • Throughout the year: 20% coinsurance applies once deductible is met.

  • As needed: Excess charges apply if visiting providers who do not accept assignment.

  • October-December: Annual notice of changes from your PSHB plan arrives. Review how your plan will work with Medicare the following year.

Managing your healthcare costs requires ongoing attention, especially during periods of illness, new diagnoses, or increased medical needs.

Hospital Outpatient Services: Another Place Charges Sneak In

Hospital outpatient services are another area where Medicare Part B charges can add up unexpectedly.

When you receive care at a hospital outpatient department:

  • You may have separate charges for the facility and the physician.

  • Both may involve 20% coinsurance after Medicare payments.

  • Facility fees can be high, making your 20% share sizable.

Even minor outpatient procedures—like biopsies or minor surgeries—can leave you with higher bills than you might expect.

Ambulance Services and Emergency Room Visits

Ambulance rides and ER visits fall under Medicare Part B too. Be aware:

  • Ambulance services usually require you to pay 20% of the Medicare-approved amount after meeting your deductible.

  • Emergency room services might involve both facility and physician charges, both subject to coinsurance.

If you frequently need emergency or urgent care, these costs can add up dramatically over the course of a year.

Out-of-Pocket Maximums: What They Mean for You

Unlike many private health insurance plans, Medicare Part B alone has no out-of-pocket maximum. This means:

  • There is no cap on how much you could owe in deductibles, coinsurance, or excess charges.

  • Serious illness, hospitalization, or intensive therapy could trigger high, uncapped costs.

By contrast, many PSHB plans that coordinate with Medicare do impose out-of-pocket maximums to protect you. Always review your PSHB plan’s details during Open Season to understand what limits, if any, apply.

Preparing for Annual Medicare Part B Changes

Medicare cost-sharing amounts usually change slightly each year. In 2025, for instance:

  • Part B premiums have increased.

  • The deductible rose to $257.

  • Other associated costs, such as excess charges, remain a reality unless you choose providers carefully.

Every fall, Medicare releases the next year’s costs and coverage updates. Make a habit of checking for these changes by October so you can budget accurately for the coming year.

Why Planning Matters More in Retirement

When you’re no longer earning a regular paycheck, out-of-pocket healthcare costs take a bigger bite out of your retirement budget.

You need to plan for:

  • Your annual deductible

  • Estimated coinsurance amounts for planned and unexpected services

  • Possible excess charges if you use non-assignment providers

  • Premiums for Medicare Part B and your PSHB plan

  • Prescription drug costs under Part D coverage

This financial preparation helps avoid surprises and protects your overall retirement security.

Smart Steps to Control Your Medicare Part B Costs

To better manage your healthcare spending:

  • Always confirm whether providers accept Medicare assignment.

  • Take advantage of preventive care services that are fully covered.

  • Coordinate your PSHB and Medicare benefits carefully.

  • Budget annually for predictable and potential medical expenses.

  • Review your PSHB plan options every Open Season to choose the most cost-effective pairing with Medicare.

With careful management, you can enjoy robust healthcare coverage without letting hidden Medicare Part B costs destabilize your finances.

Managing Medicare Part B Costs With PSHB Support

While Medicare Part B covers many necessary services, understanding your remaining financial responsibilities is crucial for budgeting effectively in retirement. PSHB plans can cushion some of the impact, but planning ahead is still essential.

If you have questions about how your PSHB plan coordinates with Medicare Part B, or if you want to ensure you have the most effective coverage for your needs, get in touch with a licensed insurance agent listed on this website for personalized guidance.