Please advice - HSA vs. PPO vs. EPO with baby due any day

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topaz318
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Joined: Wed Nov 14, 2018 1:52 pm

Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by topaz318 » Sun Jan 13, 2019 12:51 am

Hello Bogleheads,

My wife and I are expecting our first baby any day now. Until now, I had a HSA plan through my employer to which I was contributing maximum. But not sure what we should do going forward. Any advice would be appreciated. Thank you!

Current HSA Balance - $2,950.28
Employer contribution - $1000 per family

Cigna PPO Biweekly - 184.95
Deductible - $1250
Office Visit - $20 copay
OOP Max - $6000

Cigna EPO Biweekly - 195.72
Deductible - $600
Office Visit - $20 copay
OOP Max - $6000

Cigna HSA Biweekly - $82.97
Deductible - $2700
Office Visit - 10% after ded
OOP Max - $6000
Last edited by topaz318 on Sun Jan 13, 2019 1:42 am, edited 1 time in total.

HEDGEFUNDIE
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Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by HEDGEFUNDIE » Sun Jan 13, 2019 1:05 am

HSA is not a type of health insurance, it’s an investment account that comes with a High Deductible Health Plan.

To run the numbers we also need to know the out of pocket maximums for each plan.

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celia
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Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by celia » Sun Jan 13, 2019 1:41 am

Why are you asking about this now? Is your company having Open Enrollment? Even if they are, your choice likely won't take effect until the beginning of February or March.

I would think the most important thing is to wait and see if the baby is healthy (and happy). :beer

Topic Author
topaz318
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Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by topaz318 » Sun Jan 13, 2019 1:45 am

HEDGEFUNDIE wrote:
Sun Jan 13, 2019 1:05 am
HSA is not a type of health insurance, it’s an investment account that comes with a High Deductible Health Plan.

To run the numbers we also need to know the out of pocket maximums for each plan.
They call it HSA plan at our company. I have included the max. Thanks for your help!

Topic Author
topaz318
Posts: 20
Joined: Wed Nov 14, 2018 1:52 pm

Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by topaz318 » Sun Jan 13, 2019 1:47 am

celia wrote:
Sun Jan 13, 2019 1:41 am
Why are you asking about this now? Is your company having Open Enrollment? Even if they are, your choice likely won't take effect until the beginning of February or March.

I would think the most important thing is to wait and see if the baby is healthy (and happy). :beer
It will be a life changing event so I want to make sure I have the right insurance for our family. Thanks!

HEDGEFUNDIE
Posts: 3279
Joined: Sun Oct 22, 2017 2:06 pm

Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by HEDGEFUNDIE » Sun Jan 13, 2019 1:53 am

celia wrote:
Sun Jan 13, 2019 1:41 am
Why are you asking about this now? Is your company having Open Enrollment? Even if they are, your choice likely won't take effect until the beginning of February or March.

I would think the most important thing is to wait and see if the baby is healthy (and happy). :beer
The addition to the family triggers a Qualifying Life Event which allows the OP to change insurance.

Lyrrad
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Joined: Sun Jul 27, 2008 10:59 am

Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by Lyrrad » Sun Jan 13, 2019 3:37 am

The best plan will depend on one's expected utilization. It can be helpful to see "best" and "worst" case out of pocket scenarios and consider under what circumstances one plan might end up worse than another:

For example, based on the information in the first post:

Best case (no utilization, only premiums):
PPO will cost: $4809 in premiums.
HDHP (HSA plan) will cost: $2157 in premiums minus $1000 HSA contribution that can be used in the future for a net of $1157.

Worst case (premiums + OOP max):
PPO: $10809
HDHP: $8157 minus HSA contribution for a net of $7157

So, for very high and very low utilization scenarios, the HDHP should be better. Notice that in the best case, you start out $3652 ahead, with a $1450 difference in deductible. Assuming care is billed similarly between plans, and you have to pay 10% of the cost of care after hitting the HDHP deductible, I think the point at which the HDHP might potentially cost more than the PPO is after about $25000 in care is billed, since after the PPO deductible is met, you might only be responsible for the co-pay.

It's also possible that there could be a service that is covered with a low co-pay that has a very high cost paid by insurance. For example, a office visit that is billed at $20000 but only has a $20 copay might cost $1270 on the PPO plan, but $4430 on the HDHP . However, this particular scenario is probably unlikely since insurance companies usually are able to negotiate reasonable in network rates. You can take a look at your EOB for past usage in the health network for an idea of what is billed and paid by insurance for various services you've used in the past.

My guess would be that for most people, the PPO would cost more, but their expenses would be more predictable during the year.

Other considerations:
- This also doesn't take into account the tax benefits of the HSA. You may have an FSA and/or LPFSA available, though those can be harder to use effectively if one can't predict their health care usage.
- If one switches plan in the middle of a benefit year, does the deductible reset? This could make switching plans more expensive.
- There have been studies that show that those on HDHP plans use less care than PPO plans, even if participants are given HSA contributions to cover the difference in deductible. If you are considering a HDHP plan, ensure that you're not foregoing necessary care due to the higher deductible.

Topic Author
topaz318
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Joined: Wed Nov 14, 2018 1:52 pm

Re: Please advice - HSA vs. PPO vs. EPO with baby due any day

Post by topaz318 » Sun Jan 13, 2019 4:46 pm

Thank you, appreciate the advice. My wife and I rarely go to the doctor but I need to consider that we will be making frequent visits to the pediatrician with the baby.

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