Plasma-screening effects on positronium (Ps) formation for positron-hydrogen collisions in a Debye plasma environment is further investigated using the screening approximation model with the inclusion of the modified structure of Ps. More accurate Ps formation cross sections (n = 1, 2) are obtained for various Debye lengths from the Ps formation thresholds to 50 eV. The influence of considering modified bound-state wave functions and eigenenergies for the Ps is found to result in the reduction of the Ps formation cross sections at low energies, whereas it cannot counteract the enhancement of the Ps formation by the Debye screening.