HSA HDHP or Traditional PPO?

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abeyer
Posts: 7
Joined: Wed Nov 21, 2012 6:50 pm

HSA HDHP or Traditional PPO?

Post by abeyer »

My husband and I are 29 and 27 this year and new to the HDHP/PPO. In the past we've always done a traditional PPO yet we've barely used it. This year, we are thinking of starting a family. I have already had one miscarriage, so I'm trying to fit our plan around the best case scenario that we do get pregnant this year and deliver in 2015. Thank you sincerely for your time and consideration in advance.

We have the option through my employer to do a High Deductible Health Plan with the option of an HSA. The contribution limits for the HSA are $6,650 for a family and $3,350 for an individual. My employer will contribute a one-time contribution the first of the year of $585.00 for an employee and spouse or family. Our monthly premium cost would be $102.00 per month, pre-taxed. The employer contribution will count toward the contribution limit. Our deductible would be $3,000 for in-network and $6,000 for out of network. We would pay 10% after the deductible for all things such as ambulance, impatient hospital, diagnostic testing, medical office visits and urgent care in-network. Preventative care is $0. The out of pocket max for in-network would be $6,000 and includes the deductible.

For the Traditional PPO plan, the monthly premium is $206.00 per month, pre-taxed. The deductible is $0. Co-pays of $30 for medical office visits, $250 co-pay for outpatient/ambulatory surgery, $100 emergency care, $500 for inpatient hospital, and $0 for preventative, chiropractic care $30 co-pay for 20 visits per calendar year, all in-network. The out of pocket maximum is $8,000 for coverage.

We do qualify for the HSA, but we've never done it before. The funds would be automatically deducted from our paycheck on a pre-tax basis and then deposited to our account to be used toward qualified medical, dental and vision expenses for the both of us and any dependent children. We can also roll these funds from one year to the next using the 24HourFlex debit card to pay for qualified expenses.

Given the costs and features above, as well as our specific situation, which plan should we go with? Would you have any advice for recommended timing of payroll deduction? Things to consider? This might be a no brainer but we will strongly benefit from your input. Thanks again in advance.
icefr
Posts: 613
Joined: Sun Apr 17, 2011 10:50 am

Re: HSA HDHP or Traditional PPO?

Post by icefr »

Looks like your premiums will go down $104 per month or $1248 per year, plus your employer will put $585 into your HSA, for a total savings of $1833 each year if you don't use the plan at all.

A pregnancy with delivery could cost around $30,000, so you would pay out the deductible of $3,000 and then another $2,700 of coinsurance for a total cost of $5,700. I would just round that to $6,000 and assume you hit the out of pocket maximum in the year that you are pregnant until delivery. That could all come out of your HSA though and if you don't end up getting pregnant, then the HSA money would still be there for next year. So $6,000 costs - $585 employer HSA contribution + $1,224 premiums = $6,639 total cost for health insurance.

With the PPO plan, you will will pay co-pays instead. $500 for delivery is my guess, plus $30 x 11 office visits = $830 out of pocket for co-pays, plus $2,472 in premiums = $3,302 total cost.

The nice thing about the HSA is that you can put the money in there and use it later even in years where you don't have a HDHP.

My employer has some suggested scenarios for each plan and one of the scenarios they compare plans for is pregnancy. Does yours? That might help in your decision. Usually the HDHP doesn't work out to be the best option if you're going to have a baby
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grabiner
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Re: HSA HDHP or Traditional PPO?

Post by grabiner »

icefr wrote: So $6,000 costs - $585 employer HSA contribution + $1,224 premiums = $6,639 total cost for health insurance.
Subtract the tax savings on your own $6065 HSA contribution from this total cost...
With the PPO plan, you will will pay co-pays instead. $500 for delivery is my guess, plus $30 x 11 office visits = $830 out of pocket for co-pays, plus $2,472 in premiums = $3,302 total cost.
In this situation, with the huge expected cost difference, the HDHP doesn't look like a good deal for this year.

But will you actually come that close to the out-of-pocket max for pregnancy? You will pay the in-network rate for the delivery, and $30,000 looks a bit high unless you have complications. Also, with the HDHP, prescriptions count towards the deductible, so you'll have to count those as part of the PPO cost as well in the comparison.
Wiki David Grabiner
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