HSA HDHP or HRA PPO LDHP during Pregnancy?

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moneycurious
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HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by moneycurious »

My wife and I are planning on having a baby next year and I am wondering whether or not to stick with my HSA plan I have or switch to the low deductible plan. We currently have no kids and my wife is also on my health insurance. We currently have $1,400 in the HSA account.

HSA High Deductible Plan:
- Premium Per Month: $175
- Deductible $4,000 (family)
- Coinsurance: 20%
- Out of pocket Max: $7,000 (family) (includes deductible)
- Employer matches up to $800
- HSA has a non-embedded deductible which I believe means that we must meet the entire deductible before we receive plan benefits. It can be met by one family member or a combination of family members.

HRA Low Deductible Plan:
- Premium Per Month: $325
- Deductible: $2,000 (family)
- Coinsurance: 20%
- Out of pocket Max: $5,000 (family) (includes deductible)
- Offers Flex spending account where I can set aside $2,500 per year tax-free

Should I stay on the HSA plan and start contributing more or switch to the low deductible plan? Any thoughts are greatly appreciated!
Last edited by moneycurious on Wed Oct 09, 2013 2:49 pm, edited 2 times in total.
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LadyGeek
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by LadyGeek »

Welcome! I removed your poll, as it is very risky to base one's decision on a simple vote count. The reasons for someone's advice should be explained in detail; which will allow you to make an informed decision. It also provides you with an opportunity to ask questions.

You are welcome to put it back, but try this approach first.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
cubedbee
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by cubedbee »

The HSA is better even if you only contribute $800 to get the companies match (assume you are already doign that)

You need to accumulate $18k in medical expenses to hit those OOP max's, which seems likely. So, you pay 2k more in the HSA in cost-shares. But, the annual premium is $2,100 vs. $3,900 so you've saved $1,800 in premium. When you account for the company money, you're $600 ahead with the HSA. Even more when you account for the HSA money you contribute being tax-free.
Topic Author
moneycurious
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by moneycurious »

Thanks for the reply. I think I've decided I am going to go with the HSA.
Tamahome
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by Tamahome »

Since a decision was made two minutes after the first post offering advice, I guess this is not needed. I think that a PPO offers a lot more coverage (especially if things go wrong), so I tend to prefer it despite higher costs. This is not just a cost question, but cost/benefit. The point of insurance to me is to take care of the bad things you don't know about yet. I would rather pay a little more for more coverage. Like LadyGeek said, get some more involved feedback before making a decision. Of course, if your decision is already made, read no further. In any event, good luck! :beer
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.
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Kosmo
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by Kosmo »

cubedbee wrote:The HSA is better even if you only contribute $800 to get the companies match (assume you are already doign that)

You need to accumulate $18k in medical expenses to hit those OOP max's, which seems likely. So, you pay 2k more in the HSA in cost-shares. But, the annual premium is $2,100 vs. $3,900 so you've saved $1,800 in premium. When you account for the company money, you're $600 ahead with the HSA. Even more when you account for the HSA money you contribute being tax-free.
Bingo. Baby #1 in 2012 was accompanied by a hospital bill of about $37k for a standard delivery. You'll hit the max oop.
gtg970g
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by gtg970g »

I don’t believe a PPO would offer any better/more coverage than the HDHP when they are offered in conjunction through an employer. The two plans would cover the same procedures and have the same networks with the only difference being the deductible, co-pays, co-insurance, and out of pocket maximums. You may want to see what the individual deductible is for the PPO because with these plans the individual deductible is the one that matters. But don't forget with the birth of your child you'll have another individual deductible to hit.
cubedbee
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Re: HSA HDHP or HRA PPO LDHP during Pregnancy?

Post by cubedbee »

robebibb wrote:I don’t believe a PPO would offer any better/more coverage than the HDHP when they are offered in conjunction through an employer. The two plans would cover the same procedures and have the same networks with the only difference being the deductible, co-pays, co-insurance, and out of pocket maximums.
It might be different. An HSA is just a funding arrangement and can be attached to any kind of network. Employers often offer one HMO and one PPO.

I implicitly assumed it was the same PPO network as the HRA. But if the HSA is attached to an HMO or POS or some other more restrictive network, then that needs to be taken into account as well.
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