Baby Coming - Is our math right to choose HDHP over PPO?

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Iluvatar
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Baby Coming - Is our math right to choose HDHP over PPO?

Post by Iluvatar » Thu Nov 07, 2019 4:08 pm

We have a baby due in February, and we have to choose between a PPO, HDHP1, and HDHP2 through my wife's employer. We are expecting to hit Max OOP (MOOP) for both my wife and the baby. We're trying to crunch worst-case-scenarios so we are prepared financially in case wife needs C-section, baby goes into ICU, etc. When I was born in the late 80's, I was in ICU for a week and at that time it was like 100k - can't imagine what it would be now!

It seems to us that if we stay in Network and hit the Family MAX + Annual Premiums, that we will spend less by going with the HDHP2.

Are there some other downsides we're missing? Our healthcare provider told us that there is no difference between the plans regarding procedures covered and such.

Also, there is no indication to us that certain doctors would accept the PPO but not the HDHP

We would be better off with PPO if we hit out of network MAX, but is that likely when we're delivering at an in network hospital and checking to make sure OBGYN, anesthesiologist, labs, etc. are in network? I know there's always the chance that some out-of-network specialist could get called in for neonatal surgery or some such, so there's always that

It's important to note that both the HSA plans receive a $1,500 contribution to the HSA from her company.

1.) Annual Premium
90/70 PPO: $10,944
HDHP1: $5,580
HDHP2: $2,652
Savings of HDHP1 vs. PPO: $5,364
Savings of HDHP2 vs. PPO: $8,292
Savings of HDHP2 vs. HDHP1: $2,928

2.) Deductible:
90/70 PPO: $3,000
HDHP1: $6,000
HDHP2: $7,000

3.) Total Cost of [Premium + Deductible]
90/70 PPO: $13,944
HDHP1: $11,580
HDHP2: $9,562

4.) Savings of Premium + Deductible b/w Plans with $1500 HSA Contribution factored in
Savings of HDHP1 vs. PPO: $2,364 (+1500 from HSA contribution toward HDHP) = $3864
Savings of HDHP2 vs. PPO: $4,292 (+1500 from HSA contribution toward HDHP) = $5792
Savings of HDHP2 vs. HDHP1: $1928 (no difference on HSA contribution because both received it)

5.) In Network FAMILY Max Out of Pocket (MOOP)
90/70 PPO: $9,000
HDHP1: $12,000
HDHP2: $13,500
MOOP difference 90-70 vs. HDHP1: $3,000
MOOP difference b/w 90-70 and HDHP2: $4,500
MOOP difference b/w HDHP1 amd HDHP2: $1,428

6.) Out of Network FAMILY Max Out Of Pocket (MOOP)
90/70 PPO: $15,000
HDHP1: $24,000
HDHP2: $28,000
MOOP difference 90-70 vs. HDHP1: -$2,136
MOOP difference b/w 90-70 and HDHP2: -3,208
MOOP difference b/w HDHP1 amd HDHP2: -1,072


7.) Annual Premium + In Network FAMILY MOOP
90/70 PPO: $19,944
HDHP1: $17,580
HDHP2: $16,152
Savings of HDHP1 vs. PPO: $3,864
Savings of HDHP2 vs. PPO: $5,292
Savings of HDHP2 vs. HDHP1: $1,428

8.) Annual Premium + Out of Network FAMILY MOOP
90/70 PPO: $25,944
HDHP1: $29,580
HDHP2: $30,652
Savings of HDHP1 vs. PPO: -2,136
Savings of HDHP2 vs. PPO: -3,208
Savings of HDHP2 vs. HDHP1: -1,072

It looks like if we hit OON MOOP, that it would be better to do PPO, but that seems unlikely

Thanks for any and all advice
Last edited by Iluvatar on Thu Nov 07, 2019 4:12 pm, edited 1 time in total.

KyleAAA
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by KyleAAA » Thu Nov 07, 2019 4:11 pm

We had a baby with a HDHP not too long ago. We hit our deductible but not our out-of-pocket max. It was very affordable. Usually the math comes out in favor of HDHP in these scenarios. Usually. Those out of pocket maxes look kinda high, though.

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Svensk Anga
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Svensk Anga » Thu Nov 07, 2019 4:48 pm

You might check if any care for the newborn is as another family member or under your wife's OOP max. I vaguely recall that newborns don't start running up their own bills until X days old. You might reach only a single person's max OOP.

Topic Author
Iluvatar
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Iluvatar » Thu Nov 07, 2019 4:52 pm

Great point. According to our insurance company, all procedures associated with child are billed towards their MOOP. We have 30 days after birth to add him to plan and then all his treatment is retroactively applied to him. I wish it was all towards my wife’s!

momvesting
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by momvesting » Thu Nov 07, 2019 8:31 pm

You are forgetting all those pediatrician visits down the road. Check the various plans to see what they cover. For example, many PPOs cover 100% of a wellness visit with a small copay while some of the HDHP plans do not. Babies go to the doctor a lot in that first year, even if they are healthy and well. The delivery is just one piece.

Johnny Thinwallet
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Johnny Thinwallet » Thu Nov 07, 2019 9:42 pm

Based on your info, it looks like the two HDHPs are really close to each other. Whether one is better than the other may depend on your tax bracket and the coinsurance percentages once you hit the deductible but before the OOP max. I'd go with one of the HDHPs and then max out your HSA (so add $5,600 of your own money in addition to the company $1,500). You're going to be spending the money so may as well maximize the tax break.

Our son was born in 2017 while we were on a HDHP. It was a vaginal delivery with no complications, and all the billing worked out fine. The only thing I didn't know 100% in advance was the anesthesiologist being in-network, but it turns out they were.

A few tips from our experience that may help you:

1) The hospital bills were negotiable for us, but the physician bills were not. The ability to negotiate hospital bills makes a HDHP more attractive to me. We hit our family OOP max in 2017, which I believe was $5,400. However, since I negotiated discounts with the hospital bills we only actually paid around $4k out of pocket that year for healthcare. All it took were a few phone calls where I asked the reps how much they would discount the bill if I were to pay in full immediately. After talking to a few different reps, I determined what I believed was the max that they would discount, and then I paid the newly agreed upon amount to satisfy the bill.

2) My wife's OBGYN did what they called "global billing" for all the OBGYN visits before birth. What that means is they held all the billing for all her visits until after delivery, then billed everything as a bundle after the baby was born. We lucked out here, because the hospital charges hit the insurance before the physician global billing charges. The hospital charges finished off the OOP max so when the physician global billing hit a month later insurance paid it in full. You can't really control it, but you want the bills that you can negotiate to hit your insurance before the bills that you're not able to negotiate.

3) The baby charges in the hospital were billed to the baby separate from mom. Sounds like your insurance has confirmed that is what will happen to you as well.

4) Our son's preventive "well" visits were covered in full and paid 100% by insurance even if haven't hit our OOP max. These are visits that include vaccinations, well checks, etc. We've never paid one dime out of pocket for those. The visits that we get billed for are diagnostic visits that occur between those well checks (i.e. he has a cold and we take him in to check for an ear infection).

5) If you or your wife have any other nagging healthcare items, get them looked at next year.

Topic Author
Iluvatar
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Iluvatar » Fri Nov 08, 2019 12:55 pm

“you want the bills that you can negotiate to hit your insurance before the bills that you're not able to negotiate.


Can you further explain this? I assume if you hit your deductible or MOOP with the negotiable bills, and the insurance company picks up the non-negotiable bills either with co-insurance or in full, and then you negotiate the negotiable bills down, the insurance company would see that and then apply more of the non-negotiable towards that deductible or MOOP right?

Johnny Thinwallet
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Johnny Thinwallet » Fri Nov 08, 2019 10:55 pm

Iluvatar wrote:
Fri Nov 08, 2019 12:55 pm
“you want the bills that you can negotiate to hit your insurance before the bills that you're not able to negotiate.


Can you further explain this? I assume if you hit your deductible or MOOP with the negotiable bills, and the insurance company picks up the non-negotiable bills either with co-insurance or in full, and then you negotiate the negotiable bills down, the insurance company would see that and then apply more of the non-negotiable towards that deductible or MOOP right?
The insurance company has no idea that I was able to negotiate some of the hospital bills. They just see that allowable amount is x. What the hospital agrees to accept to satisfy the bill is something that that the insurance company never sees. Or at least, they've never seen it in any instance for us.

Here's another example. My wife is currently on a prenatal vitamin prescription that we run through insurance and then apply a $65 coupon toward. The prescription is $123, and that's the amount that hits the insurance. We apply the $65 coupon after running it through insurance to reduce the cost even further. So we only pay the pharmacy $58 for the prescription despite the full $123 going toward her deductible.

mountains
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Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by mountains » Sat Nov 09, 2019 12:31 am

Johnny Thinwallet wrote:
Fri Nov 08, 2019 10:55 pm
Iluvatar wrote:
Fri Nov 08, 2019 12:55 pm
“you want the bills that you can negotiate to hit your insurance before the bills that you're not able to negotiate.


Can you further explain this? I assume if you hit your deductible or MOOP with the negotiable bills, and the insurance company picks up the non-negotiable bills either with co-insurance or in full, and then you negotiate the negotiable bills down, the insurance company would see that and then apply more of the non-negotiable towards that deductible or MOOP right?
The insurance company has no idea that I was able to negotiate some of the hospital bills. They just see that allowable amount is x. What the hospital agrees to accept to satisfy the bill is something that that the insurance company never sees. Or at least, they've never seen it in any instance for us.

Here's another example. My wife is currently on a prenatal vitamin prescription that we run through insurance and then apply a $65 coupon toward. The prescription is $123, and that's the amount that hits the insurance. We apply the $65 coupon after running it through insurance to reduce the cost even further. So we only pay the pharmacy $58 for the prescription despite the full $123 going toward her deductible.
Sorry to say, but this sounds like insurance fraud to me. You are filing claims for me money than you paid

mountains
Posts: 52
Joined: Sun Jun 17, 2018 10:06 pm

Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by mountains » Sat Nov 09, 2019 12:34 am

Be careful with out-of-network. The provider can bill you for me than your insurance considers "reasonable". In this case your insurance will only pay the "reasonable" amount and you are stuck with the difference (unless your state has laws against balance billing)

Johnny Thinwallet
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Joined: Wed Nov 21, 2012 6:07 pm

Re: Baby Coming - Is our math right to choose HDHP over PPO?

Post by Johnny Thinwallet » Sat Nov 09, 2019 9:27 pm

mountains wrote:
Sat Nov 09, 2019 12:31 am
Johnny Thinwallet wrote:
Fri Nov 08, 2019 10:55 pm
Iluvatar wrote:
Fri Nov 08, 2019 12:55 pm
“you want the bills that you can negotiate to hit your insurance before the bills that you're not able to negotiate.


Can you further explain this? I assume if you hit your deductible or MOOP with the negotiable bills, and the insurance company picks up the non-negotiable bills either with co-insurance or in full, and then you negotiate the negotiable bills down, the insurance company would see that and then apply more of the non-negotiable towards that deductible or MOOP right?
The insurance company has no idea that I was able to negotiate some of the hospital bills. They just see that allowable amount is x. What the hospital agrees to accept to satisfy the bill is something that that the insurance company never sees. Or at least, they've never seen it in any instance for us.

Here's another example. My wife is currently on a prenatal vitamin prescription that we run through insurance and then apply a $65 coupon toward. The prescription is $123, and that's the amount that hits the insurance. We apply the $65 coupon after running it through insurance to reduce the cost even further. So we only pay the pharmacy $58 for the prescription despite the full $123 going toward her deductible.
Sorry to say, but this sounds like insurance fraud to me. You are filing claims for me money than you paid
I'm not filing any claim for more money than is paid. The provider submits the claim. The claim processes and then insurance provides an allowable amount that the provider is allowed to bill the patient. After the claim is processed, the provider then opts to accept an amount due from the patient for less than that allowable amount to satisfy the payment in full. Pretty sure the HITECH Act stipulates that patient's rights are protected if they pay the provider "in full." The provider is the one that stipulates what they will accept as an "in full" payment. It does not have to be 100% of the maximum allowable amount.

There is a local children's hospital here that discounts every single bill after the insurance adjustment. It's their policy, and the discount is automatically applied. The discount is nearly half off so it is significant. They see more than a million patient encounters per year. Half are commercial insurance patients. Commercial insurance patients get that discount too. They would not be providing that discount if it were illegal.

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