Key Takeaways

  • Understanding PSHB costs is essential for managing your healthcare expenses effectively. Your contributions, deductibles, and out-of-pocket maximums impact your overall financial responsibility.

  • The federal government subsidizes a significant portion of your PSHB premiums, but your share of costs varies depending on the plan you choose. Knowing these details can help you make informed decisions during Open Season.

Breaking Down Your PSHB Costs: What You Need to Know

If you’re a Postal Service employee or retiree enrolled in the Postal Service Health Benefits (PSHB) program, managing your healthcare costs is crucial. While the government covers a portion of your premiums, you still have financial responsibilities, including deductibles, copayments, and out-of-pocket expenses. Understanding these factors can help you navigate your healthcare plan with confidence and avoid unexpected costs. Here’s what you need to know about PSHB costs and contributions.

1. Your Premium Contributions and Government Subsidies

How Much of Your Premium Do You Pay?

Every PSHB plan has a premium, and the federal government covers a significant portion—usually about 70%. That means your share depends on the total plan cost and the type of coverage you select (Self Only, Self Plus One, or Self and Family). However, different plans come with different contribution requirements, so it’s important to compare your options carefully.

How Your Premiums Are Deducted

Your share of the PSHB premium is automatically deducted from your paycheck (for active employees) or pension (for retirees). If you’re currently working, these deductions are made pre-tax, potentially lowering your taxable income. For retirees, however, deductions come from post-tax income, which is important to consider when budgeting for healthcare expenses.

Open Season and Premium Changes

Each year, during Open Season (November 11 to December 13 in 2025), you have the opportunity to switch plans. Premiums can change annually, so reviewing your options each year ensures you’re getting the best coverage at the right cost. Be sure to check for any adjustments to government contributions and how they may impact your share of the premium.

2. Deductibles, Copayments, and Coinsurance Explained

Understanding Your Deductible

A deductible is the amount you must pay out-of-pocket for healthcare services before your plan starts covering costs. Some PSHB plans have lower deductibles, while others require you to pay more upfront. Knowing your plan’s deductible can help you plan for medical expenses throughout the year.

Copayments and Coinsurance: What’s the Difference?

  • Copayments are fixed amounts you pay for certain services, like doctor visits or prescription drugs.

  • Coinsurance is the percentage of costs you’re responsible for after meeting your deductible. For example, if your plan has a 20% coinsurance rate, you’ll pay 20% of covered services while the plan covers the remaining 80%.

Choosing the Right Balance

Some plans have higher premiums but lower out-of-pocket costs, while others have lower premiums but higher copayments and deductibles. Consider your typical healthcare needs—such as prescriptions, specialist visits, or routine checkups—when selecting a plan that balances cost and coverage.

3. Understanding Out-of-Pocket Maximums and Cost Protection

The Role of an Out-of-Pocket Maximum

Each PSHB plan includes an out-of-pocket maximum, which caps how much you’ll pay for covered services in a given year. Once you reach this limit, your plan covers 100% of eligible medical expenses for the rest of the year. This safeguard helps protect you from excessive healthcare costs, especially if you require major medical treatment.

What Counts Toward the Limit?

Your out-of-pocket maximum includes:

  • Deductibles

  • Copayments

  • Coinsurance

It does not include:

  • Premium payments

  • Costs for non-covered services

  • Balance billing from out-of-network providers

Comparing Limits Across Plans

In 2025, PSHB plans have different maximums based on the type of coverage you choose. Self Only plans have a lower cap than Self Plus One or Self and Family plans. Reviewing this limit can help you estimate your worst-case scenario healthcare costs.

4. Medicare and PSHB: How They Work Together

Coordinating PSHB with Medicare

If you’re a retiree and eligible for Medicare, enrolling in Medicare Part B can significantly reduce your out-of-pocket healthcare costs. Many PSHB plans offer additional benefits for those with Medicare, including waived deductibles, reduced copayments, and lower coinsurance rates.

Should You Enroll in Medicare Part B?

For retirees, enrolling in Medicare Part B is often a requirement to maintain PSHB coverage. In exchange, some PSHB plans provide reimbursement for a portion of your Part B premium. However, if you fail to enroll when required, you could face penalties and higher costs.

Medicare Part D and Prescription Drug Coverage

PSHB retirees eligible for Medicare are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) for prescription drug coverage. This can reduce your medication costs, but be sure to review how your specific PSHB plan integrates with Medicare to maximize savings.

Why Understanding PSHB Costs Matters

Your PSHB plan is a critical component of your healthcare coverage, but understanding the financial aspects is just as important as knowing your benefits. Reviewing your premiums, out-of-pocket costs, and Medicare coordination can help you avoid unnecessary expenses and ensure you’re getting the most from your plan.

Take Control of Your Healthcare Costs

  • Review Your Plan Annually: Costs and benefits change each year, so take advantage of Open Season to evaluate your options.

  • Estimate Your Expenses: Consider your typical medical needs and how different cost-sharing structures impact your budget.

  • Plan for Out-of-Pocket Costs: Set aside funds for deductibles and copayments to avoid financial surprises.

If you need further assistance navigating PSHB costs or understanding your options, get in touch with a licensed agent listed on this website. They can provide insights tailored to your specific situation and help you make informed decisions about your healthcare coverage.