Which HDHP/PPO Plan

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Topic Author
amindu
Posts: 102
Joined: Thu Aug 04, 2016 11:59 am

Which HDHP/PPO Plan

Post by amindu » Tue Nov 05, 2019 3:42 pm

Hello All, i have learned since becoming a part of Bogleheads that the health plan most Bogleheads go with is the HDHP. I have always gone with the PPO but that may have been a poor financial decision on my part. My family situation has changed and we have an infant now and so the PPO plan pricing is considerably more. I am looking for advice on what the smart decision would be given we have a new child and i am sure there may be ER/Urgent care and other visits with having a child. Below are the options available, any advice is truly appreciated. Thanks.


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deltaneutral83
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Re: Which HDHP/PPO Plan

Post by deltaneutral83 » Tue Nov 05, 2019 4:15 pm

Is your employer picking up any of the tab of the monthly premium and if so, how much for each plan? Also, does your employer match or contribute to the HSA with the HDHP's (whoops see that now, $1,000). Just eyeballing it, I'm not sure how the PPO makes sense in that the premium difference is so substantial over both HDHP's that the OOP max savings on PPO really is negated if indeed your employer doesn't subsidize the premiums on any of these plans.

It would appear that between the HDHP's, if you go with the cheaper premiums ($286) you would want less than roughly $3,792 ($3,000 + premium difference) in annual healthcare expenses for the family. The more expensive HDHP ($352) comes out ahead (all in network of course) with more than $3800ish in healthcare expenses. Either HDHP seems fine though all things considered.
Last edited by deltaneutral83 on Tue Nov 05, 2019 4:48 pm, edited 8 times in total.

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RickBoglehead
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Re: Which HDHP/PPO Plan

Post by RickBoglehead » Tue Nov 05, 2019 4:19 pm

amindu wrote:
Tue Nov 05, 2019 3:42 pm
Hello All, i have learned since becoming a part of Bogleheads that the health plan most Bogleheads go with is the HDHP. I have always gone with the PPO but that may have been a poor financial decision on my part. My family situation has changed and we have an infant now and so the PPO plan pricing is considerably more. I am looking for advice on what the smart decision would be given we have a new child and i am sure there may be ER/Urgent care and other visits with having a child. Below are the options available, any advice is truly appreciated. Thanks.

I don't know that your conclusion is valid. I've seen nothing that says that MOST Bogleheads take an HDHP.

Recent threads on this subject show that someone like you, with unknowns due to a new child, have a hard time doing the math because too much is unknown. Part of life is relieving unnecessary stress points. Make sure that after you run the numbers, you take into account how much stress you might have trying to save $XXX a year. If $XXX is under $1,000 in the year, I wouldn't go near it. If "I might pay $X,XXX" if things aren't great", I wouldn't go near it.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

Topic Author
amindu
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Re: Which HDHP/PPO Plan

Post by amindu » Tue Nov 05, 2019 10:21 pm

deltaneutral83 wrote:
Tue Nov 05, 2019 4:15 pm
Is your employer picking up any of the tab of the monthly premium and if so, how much for each plan? Also, does your employer match or contribute to the HSA with the HDHP's (whoops see that now, $1,000). Just eyeballing it, I'm not sure how the PPO makes sense in that the premium difference is so substantial over both HDHP's that the OOP max savings on PPO really is negated if indeed your employer doesn't subsidize the premiums on any of these plans.

It would appear that between the HDHP's, if you go with the cheaper premiums ($286) you would want less than roughly $3,792 ($3,000 + premium difference) in annual healthcare expenses for the family. The more expensive HDHP ($352) comes out ahead (all in network of course) with more than $3800ish in healthcare expenses. Either HDHP seems fine though all things considered.
Thanks I am leaning towards the middle ground given the change from PPO to a HDHP plan.

Topic Author
amindu
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Re: Which HDHP/PPO Plan

Post by amindu » Tue Nov 05, 2019 10:22 pm

RickBoglehead wrote:
Tue Nov 05, 2019 4:19 pm
amindu wrote:
Tue Nov 05, 2019 3:42 pm
Hello All, i have learned since becoming a part of Bogleheads that the health plan most Bogleheads go with is the HDHP. I have always gone with the PPO but that may have been a poor financial decision on my part. My family situation has changed and we have an infant now and so the PPO plan pricing is considerably more. I am looking for advice on what the smart decision would be given we have a new child and i am sure there may be ER/Urgent care and other visits with having a child. Below are the options available, any advice is truly appreciated. Thanks.

I don't know that your conclusion is valid. I've seen nothing that says that MOST Bogleheads take an HDHP.

Recent threads on this subject show that someone like you, with unknowns due to a new child, have a hard time doing the math because too much is unknown. Part of life is relieving unnecessary stress points. Make sure that after you run the numbers, you take into account how much stress you might have trying to save $XXX a year. If $XXX is under $1,000 in the year, I wouldn't go near it. If "I might pay $X,XXX" if things aren't great", I wouldn't go near it.
Agreed the unknowns are where I am struggling to make a decision of which plan would be the optimal choice. Thanks

lasky
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Re: Which HDHP/PPO Plan

Post by lasky » Wed Nov 06, 2019 9:19 am

Something to consider if you think ER visits might be likely is how the out-of-network deductibles and out-of-pocket maximums compare, and whether the plans offer cross-accumulation between in-network deductibles and OOP maxes and out-of-network deductibles and OOP maxes.

We really wanted to switch to a HDHP this year but decided the risk wasn't worth the reward after finding the "no cross-accumulation" rule in the fine print of the HDHP description.

aristotelian
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Re: Which HDHP/PPO Plan

Post by aristotelian » Wed Nov 06, 2019 9:46 am

The HDHPs are going to come out ahead if you have few expenses due to lower premiums. I believe they also come out ahead if you hit your OOP max. One factor to consider is if you have the ability to max your HSA, that may be an additional $2k or so due to avoiding FICA and income tax at your marginal rate.

Topic Author
amindu
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Re: Which HDHP/PPO Plan

Post by amindu » Wed Nov 06, 2019 12:29 pm

lasky wrote:
Wed Nov 06, 2019 9:19 am
Something to consider if you think ER visits might be likely is how the out-of-network deductibles and out-of-pocket maximums compare, and whether the plans offer cross-accumulation between in-network deductibles and OOP maxes and out-of-network deductibles and OOP maxes.

We really wanted to switch to a HDHP this year but decided the risk wasn't worth the reward after finding the "no cross-accumulation" rule in the fine print of the HDHP description.
From what i understand if you go to the ER everything has to be considered in-network since you do not get to shop for emergency services ahead of time.

lasky
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Re: Which HDHP/PPO Plan

Post by lasky » Wed Nov 06, 2019 6:02 pm

amindu wrote:
Wed Nov 06, 2019 12:29 pm
From what i understand if you go to the ER everything has to be considered in-network since you do not get to shop for emergency services ahead of time.
Horror stories abound in the media and even, sometimes, on this forum about surprise ER bills (or surprise bills stemming from admission to the hospital from the ER). Occasionally the bills are genuinely surprising, but not infrequently the real issue was the patient not understanding the limitations of their coverage.

https://khn.org/news/1-in-6-insured-hos ... work-care/

Whether you're comfortable with possibly meeting both in-network and out-of-network maximums is just one factor to consider. Sometimes the HDHP still comes out ahead and sometimes you're risking more than you realize. And don't assume out-of-pocket maximums are absolute, because that might not be the case. I'm particularly jaded about this because my spouse is a physician who comes home with all kinds of hair-raising financial tales from the ER.

Topic Author
amindu
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Re: Which HDHP/PPO Plan

Post by amindu » Thu Nov 07, 2019 2:14 pm

lasky wrote:
Wed Nov 06, 2019 6:02 pm
amindu wrote:
Wed Nov 06, 2019 12:29 pm
From what i understand if you go to the ER everything has to be considered in-network since you do not get to shop for emergency services ahead of time.
Horror stories abound in the media and even, sometimes, on this forum about surprise ER bills (or surprise bills stemming from admission to the hospital from the ER). Occasionally the bills are genuinely surprising, but not infrequently the real issue was the patient not understanding the limitations of their coverage.

https://khn.org/news/1-in-6-insured-hos ... work-care/

Whether you're comfortable with possibly meeting both in-network and out-of-network maximums is just one factor to consider. Sometimes the HDHP still comes out ahead and sometimes you're risking more than you realize. And don't assume out-of-pocket maximums are absolute, because that might not be the case. I'm particularly jaded about this because my spouse is a physician who comes home with all kinds of hair-raising financial tales from the ER.
Wow thanks for the insight

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