2020 FEHB HDHP - how to calculate vs. traditional plan?

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ems2013
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Joined: Thu Dec 12, 2013 11:38 am

2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by ems2013 » Thu Nov 07, 2019 3:09 pm

My spouse is a federal employee eligible for non-postal rates. We have discussed the HDHP with HSA option for a few years, but have remained with my company, which generously covers the entire premium, though there is a $1,000 deductible as well as small copays. We have used FSA through FSAFeds. We are primarily interested in the HSA as an additional savings vehicle (we max out TSP/401k and Roth IRAs) and there's also a possibility that, if I dropped my company's health insurance, they would increase my salary to cover the FEHB premium and deductible (about a 50% savings for them & we understand tax implications for increase in salary). However, before we make the jump (which for some reason feels huge), I've been trying to make some calculations based on EOBs from the past year, but I've been having trouble sorting it out to make a reasonable comparison. If we went to HDHP w/ HSA we would, of course, drop the FSA.

We've been comparing the main three Federal HDHP with HSA (Aetna, GEHA, and MHBP). So far we like Aetna due to no balance billing for involuntary services. I've been unable to find a list of investment options for Aetna's PayFlex HSA option.

So, to summarize, 2 questions/requests:
1. How to calculate financial implications of HDHP vs. traditional plan?
2. Please point me in the direction of the Aetna's PayFlex HSA investment options.

Thank you,
ems

Mako
Posts: 176
Joined: Wed Feb 28, 2007 9:34 am

Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by Mako » Thu Nov 07, 2019 3:46 pm

ems2013 wrote:
Thu Nov 07, 2019 3:09 pm
We've been comparing the main three Federal HDHP with HSA (Aetna, GEHA, and MHBP). So far we like Aetna due to no balance billing for involuntary services. I've been unable to find a list of investment options for Aetna's PayFlex HSA option.

So, to summarize, 2 questions/requests:
1. How to calculate financial implications of HDHP vs. traditional plan?
2. Please point me in the direction of the Aetna's PayFlex HSA investment options.

Thank you,
ems
1. The math is fairly straightforward if the plans you are looking at use copay %. Up to the deductible you pay 100% of costs. So you can figure out: if my deductible is $3000 and I have $3000 in medical costs, I will pay $3000+premiums-tax and other benefits (like HSA tax breaks or contributions from the plan). If you have $5000 in medical costs, you can figure out: I pay $3000+premiums+10% of $2000 - tax and other benefits (or whatever your % is). Your lower deductible plan might be I pay $1000+15% of $4000 - benefits. I made a spreadsheet of plan I was considering and medical costs of various values from $1000 to wherever the OOP max is to see what I would pay with each plan.

If you have copay of set amounts per visit, it is harder to compare because you need to figure out how many visits you might make at $35 each, or whatever.

2. No idea.

That balance billing perk of Aetna is interesting, but how much is it worth I wonder? Otherwise the plan does not make a whole lot of sense to me compared to, say, GEHA. GEHA has a better HSA passthrough ($1800 vs $1600), a better out of pocket max ($10k vs $13.8k), better copays after deductible (5% vs 15% for most things), a better deductible ($3000 vs $3600) and better premiums ($45 less per biweekly, or over $1100 per year). Disclosure, I am a customer of GEHA, but I am thinking of changing to Carefirst this year.

jaxxmjd
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Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by jaxxmjd » Thu Nov 07, 2019 4:41 pm

Here is a link to the Aetna HSA investment options: https://imgur.com/a/laPWmH4.

I have been covered by Aetna's HDHP for nearly 10 years, but plan to make the jump to GEHA's HDHP during this open season. Aetna's premiums are increasing significantly to almost a third more than GEHA's while the annual deductible is increasing by $400, the coinsurance upon reaching the deductible is increasing by 50% from 10% to 15%, and the annual out of pocket maximum is increasing from $7,900 to $13,800. I won't deny being a bit concerned about the balance billing issue, but the annual premium increases have averaged to be about 10% over the last decade and the blatant money grab by Aetna this year is too much to overlook.

Mako
Posts: 176
Joined: Wed Feb 28, 2007 9:34 am

Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by Mako » Thu Nov 07, 2019 5:48 pm

jaxxmjd wrote:
Thu Nov 07, 2019 4:41 pm
Here is a link to the Aetna HSA investment options: https://imgur.com/a/laPWmH4.

I have been covered by Aetna's HDHP for nearly 10 years, but plan to make the jump to GEHA's HDHP during this open season. Aetna's premiums are increasing significantly to almost a third more than GEHA's while the annual deductible is increasing by $400, the coinsurance upon reaching the deductible is increasing by 50% from 10% to 15%, and the annual out of pocket maximum is increasing from $7,900 to $13,800. I won't deny being a bit concerned about the balance billing issue, but the annual premium increases have averaged to be about 10% over the last decade and the blatant money grab by Aetna this year is too much to overlook.
Yes when I updated my spreadsheet I was shocked at how much Aetna changed for the worse. Before it was competitive, now really not unless you greatly value the balance billing thing (which I’m not sure how to value).

Topic Author
ems2013
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Joined: Thu Dec 12, 2013 11:38 am

Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by ems2013 » Tue Nov 12, 2019 10:33 am

Thank you for your responses, I very much appreciate it. I understand what you're saying about GEHA and Aetna's greediness re: increasing premiums/deductibles/coinsurance. I've not faced a balance billing issue before, but have recently faced a couple of emergencies (car accident requiring vehicle replacement, sewer pipe replacement) that make the balance billing protection a real consideration for me. Thank you, again.

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grabiner
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Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

Post by grabiner » Tue Nov 12, 2019 2:37 pm

To calculate the benefit of the HDHP versus a traditional plan, first compute the day-one cost, what you will pay if you never see the doctor for anything other than a free annual checkup. With a traditional plan, this is the after-tax premium. With an HDHP, this is the after-tax premium, minus the government's contribution to your HSA, minus the tax savings on your own contribution to your HSA (since this is a benefit compared to investing the same money in a traditional account in which withdrawals are taxed, or a Roth account in which deposits are not deducted).

Then add the medical costs; will the HDHP out-of-pocket costs exceed the day-one savings? Usually, the worst came for an HDHP is when you hit the deductible exactly, as it provides better coverage than a conventional plan past the deductible. With the government plans, the day-one savings is often comparable to the deductible, so the HDHP is almost sure to come out ahead.
Wiki David Grabiner

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