HDHP versus PPO

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BV3273
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HDHP versus PPO

Post by BV3273 »

Im looking at health plans for a potential new employer. I have always opted for the PPO option and not the HDHP that my current and past employers offer. I have 2 kids a 3 year old and a 5 year old. So besides the minor bumps, scrapes, and colds nothing out of the ordinary. What should I be taking into account?
Tdubs
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Re: HDHP versus PPO

Post by Tdubs »

Can you give use the specifics of the plans you are looking at?
stimulacra
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Re: HDHP versus PPO

Post by stimulacra »

HDHP gives you access to an HSA account (provided your spouse doesn't have an FSA account).

HSA is popular as a stealth retirement account if you are a low consumer of healthcare which sounds like you might be…

Lot of good threads here on the benefits of HSAs.

If your employer offers a match or incentive, it's worthwhile.

I've had mine for a few years and it's grown to $16k, love it.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
niceguy7376
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Re: HDHP versus PPO

Post by niceguy7376 »

BV3273 wrote: Mon Sep 21, 2020 9:33 pm
Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
We are asking about the premium and deductible details of the plan options you have. That way they can present the answers with examples of savings of one Vs the other.
Dottie57
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Re: HDHP versus PPO

Post by Dottie57 »

BV3273 wrote: Mon Sep 21, 2020 9:33 pm
Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
Fyi, a PPO plan can also be an HDHP plan. I am on one now. Not through the Exchange however.
stimulacra
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Re: HDHP versus PPO

Post by stimulacra »

Look at your last 3-4 years of medical expenses. What your out of pocket was and what the insurance paid for.

With HDHP you have pay whatever your deductible is before the plan kicks in. No more $20 copays for every visit outside of annual and preventative things. You are paying the discounted negotiated price but it's out of pocket till your deductible is met.

With that said you'll have to crunch the numbers between the silver, gold and platinum columns and see what makes sense for you and your family.

There are plenty of people who don't mind paying more each month out of their paycheck for the perceived value of that $20 copay.

In my experience, moderate consumers of healthcare find most benefit most from PPOs. Low consumers benefit more from HDHPs/HSA and very high consumers of healthcare would probably benefit more from HDHPs since there is a max out of pocket there that tends to be lower than what you might be on the hook for under a PPO.
csmath
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Re: HDHP versus PPO

Post by csmath »

I'm not sure how useful people found this but the exercise in making it was at least enlightening to me and I pulled the trigger to switch to HDHP because of it. Here is a thing... viewtopic.php?f=2&t=295181
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FiveK
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Re: HDHP versus PPO

Post by FiveK »

BV3273 wrote: Mon Sep 21, 2020 9:03 pm Im looking at health plans for a potential new employer. I have always opted for the PPO option and not the HDHP that my current and past employers offer. I have 2 kids a 3 year old and a 5 year old. So besides the minor bumps, scrapes, and colds nothing out of the ordinary. What should I be taking into account?
In addition to csmath's tool, a couple of comparison tools (among others) are Health Savings Account (HSA) vs. Traditional Health Plan and the 'HDHP Analysis' tab of the personal finance toolbox spreadsheet.
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FIREchief
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Re: HDHP versus PPO

Post by FIREchief »

Dottie57 wrote: Mon Sep 21, 2020 9:43 pm Fyi, a PPO plan can also be an HDHP plan. I am on one now. Not through the Exchange however.
Yes. I don't understand the thread title. It's generally HDHP vs. any plan that doesn't meet the HDHP requirements for an HSA. It's also HMO vs. PPO. There are HDHP HMOs and HDHP PPOs and also HMOs and PPOs that don't qualify as HDHPs. My last Megacorp HDHP was a PPO plan.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Tdubs
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Re: HDHP versus PPO

Post by Tdubs »

niceguy7376 wrote: Mon Sep 21, 2020 9:38 pm
BV3273 wrote: Mon Sep 21, 2020 9:33 pm
Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
We are asking about the premium and deductible details of the plan options you have. That way they can present the answers with examples of savings of one Vs the other.
Yes, we need to know details of each plan's premium, deductibles, copays (medical appointments, prescriptions, hospital), co-insurance, maximum out of pocket limits.
DarkHelmetII
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Re: HDHP versus PPO

Post by DarkHelmetII »

FYI re: terminology / plan labels. HDHP indicates the financial arrangement (e.g. high deductible vs. low deductible) and PPO indicates type of network. In many cases the HDHP is still the very same PPO but with a high deductible. Human Resources often labels the plans as "HDHP" and "PPO" muddying the waters, implying the HDHP is not a PPO network, where in-fact the HDHP has the exact same PPO network as the "PPO" option.

But as per other posts, this is all quite academic without more details.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Sorry. See more information below.

All amounts are bi-weekly deductions.

HDHP - Aetna = $100, Cigna = $140, UHC = $100
Gold - $150, $289, $214
Platinum - $266, $420, $336

Annual Deductible
HDHP -$1500/$3000 in and out of network
Gold - $800/$1600 in, $1600/$3200 out
Platinum - $250/$500 in, $5000/$10000 out

Maximum out of Pocket
HDHP - $3800/$7600 in, $8000/$16000 out
Gold - $3600/$7200 in, $7200/$14400 out
Platinum - $2300/$4600 in, $11500/$23000 out

Coinsurance
HDHP - 25% in, 45% out
Gold - 25% in, 45% out
Platinum - 15% in, 35% out

Doctors Office in Visit Primary Care Physician
HDHP - You pay 25% after deductible
Gold - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible
Platinum - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible

Preventative Care
Covered 100% by all plans
Topic Author
BV3273
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Re: HDHP versus PPO

Post by BV3273 »

niceguy7376 wrote: Mon Sep 21, 2020 9:38 pm
BV3273 wrote: Mon Sep 21, 2020 9:33 pm
Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
We are asking about the premium and deductible details of the plan options you have. That way they can present the answers with examples of savings of one Vs the other.
Details added.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Dottie57 wrote: Mon Sep 21, 2020 9:43 pm
BV3273 wrote: Mon Sep 21, 2020 9:33 pm
Tdubs wrote: Mon Sep 21, 2020 9:11 pm Can you give use the specifics of the plans you are looking at?
Aetna, Cigna, and United Healthcare.
Plans are Silver (HDHP), Gold, and Platinum.
Fyi, a PPO plan can also be an HDHP plan. I am on one now. Not through the Exchange however.
Gotcha. Well since the HDHP option is the only one with an HSA I figured that would be the best way to differentiate. Sorry for the confusion.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

DarkHelmetII wrote: Tue Sep 22, 2020 4:43 am FYI re: terminology / plan labels. HDHP indicates the financial arrangement (e.g. high deductible vs. low deductible) and PPO indicates type of network. In many cases the HDHP is still the very same PPO but with a high deductible. Human Resources often labels the plans as "HDHP" and "PPO" muddying the waters, implying the HDHP is not a PPO network, where in-fact the HDHP has the exact same PPO network as the "PPO" option.

But as per other posts, this is all quite academic without more details.
Thanks. More details added.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

FiveK wrote: Tue Sep 22, 2020 12:41 am
BV3273 wrote: Mon Sep 21, 2020 9:03 pm Im looking at health plans for a potential new employer. I have always opted for the PPO option and not the HDHP that my current and past employers offer. I have 2 kids a 3 year old and a 5 year old. So besides the minor bumps, scrapes, and colds nothing out of the ordinary. What should I be taking into account?
In addition to csmath's tool, a couple of comparison tools (among others) are Health Savings Account (HSA) vs. Traditional Health Plan and the 'HDHP Analysis' tab of the personal finance toolbox spreadsheet.
Thank you!
Tdubs
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Re: HDHP versus PPO

Post by Tdubs »

BV3273 wrote: Tue Sep 22, 2020 5:58 am Sorry. See more information below.

All amounts are bi-weekly deductions.

HDHP - Aetna = $100, Cigna = $140, UHC = $100
Gold - $150, $289, $214
Platinum - $266, $420, $336

Annual Deductible
HDHP -$1500/$3000 in and out of network
Gold - $800/$1600 in, $1600/$3200 out
Platinum - $250/$500 in, $5000/$10000 out

Maximum out of Pocket
HDHP - $3800/$7600 in, $8000/$16000 out
Gold - $3600/$7200 in, $7200/$14400 out
Platinum - $2300/$4600 in, $11500/$23000 out

Coinsurance
HDHP - 25% in, 45% out
Gold - 25% in, 45% out
Platinum - 15% in, 35% out

Doctors Office in Visit Primary Care Physician
HDHP - You pay 25% after deductible
Gold - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible
Platinum - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible

Preventative Care
Covered 100% by all plans
Great. Sorry, forgot to ask for one more detail. Does your policy offer a "pass through"? That's where they contribute a certain amount to your HSA. For example, my deductible is $3,000 but my policy contributes $1,800 to my HSA.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Tdubs wrote: Tue Sep 22, 2020 6:20 am
BV3273 wrote: Tue Sep 22, 2020 5:58 am Sorry. See more information below.

All amounts are bi-weekly deductions.

HDHP - Aetna = $100, Cigna = $140, UHC = $100
Gold - $150, $289, $214
Platinum - $266, $420, $336

Annual Deductible
HDHP -$1500/$3000 in and out of network
Gold - $800/$1600 in, $1600/$3200 out
Platinum - $250/$500 in, $5000/$10000 out

Maximum out of Pocket
HDHP - $3800/$7600 in, $8000/$16000 out
Gold - $3600/$7200 in, $7200/$14400 out
Platinum - $2300/$4600 in, $11500/$23000 out

Coinsurance
HDHP - 25% in, 45% out
Gold - 25% in, 45% out
Platinum - 15% in, 35% out

Doctors Office in Visit Primary Care Physician
HDHP - You pay 25% after deductible
Gold - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible
Platinum - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible

Preventative Care
Covered 100% by all plans
Great. Sorry, forgot to ask for one more detail. Does your policy offer a "pass through"? That's where they contribute a certain amount to your HSA. For example, my deductible is $3,000 but my policy contributes $1,800 to my HSA.
I haven’t seen anything about a match on the HSA in the benefits information.
DarkHelmetII
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Re: HDHP versus PPO

Post by DarkHelmetII »

HDHP. Save substantial $$ in premiums over the year plus HSA tax benefits. Also note out of network max out of pocket for Platinum actually exceeds HDHP and is marginally more than Gold. Give yourself out of network flexibility. However as always beware balance billing.

Also, ask if in network and out of network deductibles cross-apply. If yes , icing on the cake; if no still does not change my suggestion to go hdhp.
toocold
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Re: HDHP versus PPO

Post by toocold »

If you have don't have alot of medical expenses, it's usually best to have the cheapest premium (high deductible) and fund an HSA on the side. By doing this, you are taking on more of the risk of a high medical expense, which is capped, so Aetna or UHC.
AnEngineer
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Re: HDHP versus PPO

Post by AnEngineer »

toocold wrote: Tue Sep 22, 2020 7:57 am ... By doing this, you are taking on more of the risk of a high medical expense, which is capped, so Aetna or UHC.
Not necessarily. If you look at the worst case scenario: you pay premiums and hit the max out of pocket expenses, high-deductible plans are often your best bet also. That's true here.
mkc
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Re: HDHP versus PPO

Post by mkc »

BV3273 wrote: Tue Sep 22, 2020 5:59 am Details added.
So is the HDHP a PPO, EPO, or HMO? The plan type is an important distinction.

PPO will generally let you see a specialist without a pre-approved referral, and most include out of network coverage. (preferred provider plan)

EPO will let you generally see a specialist without a pre-approved referral, and do not include any out of network coverage (exclusive provider plan)

HMO will require referral to a specialist by your PCP and that referral will generally have to be approved by the HMO first, before you have your first appointment with the specialist or they won't pay. Generally do not include any out of network coverage.
Tdubs
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Re: HDHP versus PPO

Post by Tdubs »

If you can contribute the max to the HSA, it looks like the HDHP will be superior to your other options paired with an FSA, even if you contribute the max to the FSA every year. If you don't maximize an FSA, then the HDHP will almost certainly be superior. To verify, you need to look at your federal and state tax brackets and figure our how much you will save in taxes.

You should verify that you do not live in a state that taxes HSA contributions, such as CA or NJ. TN and VT, I believe, tax interest and dividends on an HSA at some point. And, of course, if you live in a state with no income tax, there is nothing gained at the state level from an HSA.
runninginvestor
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Re: HDHP versus PPO

Post by runninginvestor »

mkc wrote: Tue Sep 22, 2020 9:09 am
BV3273 wrote: Tue Sep 22, 2020 5:59 am Details added.
So is the HDHP a PPO, EPO, or HMO? The plan type is an important distinction.

PPO will generally let you see a specialist without a pre-approved referral, and most include out of network coverage. (preferred provider plan)

EPO will let you generally see a specialist without a pre-approved referral, and do not include any out of network coverage (exclusive provider plan)

HMO will require referral to a specialist by your PCP and that referral will generally have to be approved by the HMO first, before you have your first appointment with the specialist or they won't pay. Generally do not include any out of network coverage.
I would think the HDHP is not an HMO (or any) since they all have OOP limits for OON care. I didn't think HMO's put limits on OON care since everything is supposed to be in network, so to speak.
runninginvestor
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Re: HDHP versus PPO

Post by runninginvestor »

toocold wrote: Tue Sep 22, 2020 7:57 am If you have don't have alot of medical expenses, it's usually best to have the cheapest premium (high deductible) and fund an HSA on the side. By doing this, you are taking on more of the risk of a high medical expense, which is capped, so Aetna or UHC.
To echo this, if OP has no existing conditions that need routine care, and doesn't reasonably expect any, one way to treat the decision would be "worst-case" scenario.

In any worst case scenario above where you hit the OOP Max the way to differentiate would be the overall cost: premiums+oop max. An example with Aetna is under the HDHP you'd pay $2600 in yearly prems + $3800 in OOP Max for $6400 in medical costs (assuming you were in network, covered services, etc.). Whereas for the Gold and Platinum Aetna plans your total costs would be $7500 and $9216, respectively; costing $1100 and $2816 more.

If you have recurring medical expenses, you'd want to look at how much you'd save in premiums between plans and see if that savings makes up for better cost sharing for those services.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Tdubs wrote: Tue Sep 22, 2020 6:20 am
BV3273 wrote: Tue Sep 22, 2020 5:58 am Sorry. See more information below.

All amounts are bi-weekly deductions.

HDHP - Aetna = $100, Cigna = $140, UHC = $100
Gold - $150, $289, $214
Platinum - $266, $420, $336

Annual Deductible
HDHP -$1500/$3000 in and out of network
Gold - $800/$1600 in, $1600/$3200 out
Platinum - $250/$500 in, $5000/$10000 out

Maximum out of Pocket
HDHP - $3800/$7600 in, $8000/$16000 out
Gold - $3600/$7200 in, $7200/$14400 out
Platinum - $2300/$4600 in, $11500/$23000 out

Coinsurance
HDHP - 25% in, 45% out
Gold - 25% in, 45% out
Platinum - 15% in, 35% out

Doctors Office in Visit Primary Care Physician
HDHP - You pay 25% after deductible
Gold - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible
Platinum - You pay $25 for PCP visit with no deductible, $40 for specialist visit with no deductible

Preventative Care
Covered 100% by all plans
Great. Sorry, forgot to ask for one more detail. Does your policy offer a "pass through"? That's where they contribute a certain amount to your HSA. For example, my deductible is $3,000 but my policy contributes $1,800 to my HSA.
$1,000 Contribution for family.
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Chief_Engineer
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Re: HDHP versus PPO

Post by Chief_Engineer »

BV3273 wrote: Tue Sep 22, 2020 2:14 pm $1,000 Contribution for family.
That settles it. The HDHP is far superior than the other plans. I can attach a chart later comparing the OOP costs for different levels of annual medical expenses.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Chief_Engineer wrote: Tue Sep 22, 2020 4:06 pm
BV3273 wrote: Tue Sep 22, 2020 2:14 pm $1,000 Contribution for family.
That settles it. The HDHP is far superior than the other plans. I can attach a chart later comparing the OOP costs for different levels of annual medical expenses.
Thanks would like to see the chart.
Tdubs
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Re: HDHP versus PPO

Post by Tdubs »

Chief_Engineer wrote: Tue Sep 22, 2020 4:06 pm
BV3273 wrote: Tue Sep 22, 2020 2:14 pm $1,000 Contribution for family.
That settles it. The HDHP is far superior than the other plans. I can attach a chart later comparing the OOP costs for different levels of annual medical expenses.
Yes, this makes it an easy choice.
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Chief_Engineer
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Re: HDHP versus PPO

Post by Chief_Engineer »

BV3273 wrote: Tue Sep 22, 2020 6:41 pm Thanks would like to see the chart.
Here's the chart. I used the Aetna premium numbers. I assumed all costs were in-network. I ignored co-pays for simplicity. It's possible if you have a lot of doctor visits maybe the Gold/Platinum plans would look more attractive. But in my experience, the co-pay and coinsurance cost of an appointment tend to be very similar. I'd like to share the google sheet that I used to make the chart, but I can't figure out how to do it without exposing my Google account/gmail.

Image
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

Chief_Engineer wrote: Wed Sep 23, 2020 8:06 am
BV3273 wrote: Tue Sep 22, 2020 6:41 pm Thanks would like to see the chart.
Here's the chart. I used the Aetna premium numbers. I assumed all costs were in-network. I ignored co-pays for simplicity. It's possible if you have a lot of doctor visits maybe the Gold/Platinum plans would look more attractive. But in my experience, the co-pay and coinsurance cost of an appointment tend to be very similar. I'd like to share the google sheet that I used to make the chart, but I can't figure out how to do it without exposing my Google account/gmail.

Image
Thank you for this. I’m thinking due to the amount of times my kids go to the doctor perhaps gold would be more prudent.
AnEngineer
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Re: HDHP versus PPO

Post by AnEngineer »

BV3273 wrote: Wed Sep 23, 2020 8:27 am
Chief_Engineer wrote: Wed Sep 23, 2020 8:06 am
BV3273 wrote: Tue Sep 22, 2020 6:41 pm Thanks would like to see the chart.
Here's the chart. I used the Aetna premium numbers. I assumed all costs were in-network. I ignored co-pays for simplicity. It's possible if you have a lot of doctor visits maybe the Gold/Platinum plans would look more attractive. But in my experience, the co-pay and coinsurance cost of an appointment tend to be very similar. I'd like to share the google sheet that I used to make the chart, but I can't figure out how to do it without exposing my Google account/gmail.

Image
Thank you for this. I’m thinking due to the amount of times my kids go to the doctor perhaps gold would be more prudent.
I don't understand why. HDHP is strictly better according to that plot for all amounts of medical costs billed.
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BV3273
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Re: HDHP versus PPO

Post by BV3273 »

AnEngineer wrote: Wed Sep 23, 2020 10:27 am
BV3273 wrote: Wed Sep 23, 2020 8:27 am
Chief_Engineer wrote: Wed Sep 23, 2020 8:06 am
BV3273 wrote: Tue Sep 22, 2020 6:41 pm Thanks would like to see the chart.
Here's the chart. I used the Aetna premium numbers. I assumed all costs were in-network. I ignored co-pays for simplicity. It's possible if you have a lot of doctor visits maybe the Gold/Platinum plans would look more attractive. But in my experience, the co-pay and coinsurance cost of an appointment tend to be very similar. I'd like to share the google sheet that I used to make the chart, but I can't figure out how to do it without exposing my Google account/gmail.

Image
Thank you for this. I’m thinking due to the amount of times my kids go to the doctor perhaps gold would be more prudent.
I don't understand why. HDHP is strictly better according to that plot for all amounts of medical costs billed.
I have an underlying heart condition. Not sure if I will need surgery but I’d rather be covered just in case.
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Chief_Engineer
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Re: HDHP versus PPO

Post by Chief_Engineer »

BV3273 wrote: Wed Sep 23, 2020 11:35 am I have an underlying heart condition. Not sure if I will need surgery but I’d rather be covered just in case.
I just don't see a situation where that's the case. The HDHP and Gold plans have similar OoP maximums, but the Gold plan has much higher premiums especially once you include the $1k employer contribution to an HSA. Especially with a surgery, you're likely to hit pretty close to the OoP max in any of the plans. In which case the HDHP comes out about $2k ahead of either the Gold or Platinum plans.

I want to make it clear that the "Medical Expenses" in the chart x-axis is an annual number. Again, maybe it's possible for one of the traditional plans to pull ahead if you're seeing a specialist every week. Personally I've never been billed more than $200 for a doctor's appointment. Once you fill a deductible and the co-insurance kicks in that would become a $50 appointment vs the $40 co-pay on the traditional plans. And the HDHP has a huge premium and HSA advantage.
AnEngineer
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Re: HDHP versus PPO

Post by AnEngineer »

Chief_Engineer wrote: Wed Sep 23, 2020 12:34 pm
BV3273 wrote: Wed Sep 23, 2020 11:35 am I have an underlying heart condition. Not sure if I will need surgery but I’d rather be covered just in case.
I just don't see a situation where that's the case. The HDHP and Gold plans have similar OoP maximums, but the Gold plan has much higher premiums especially once you include the $1k employer contribution to an HSA. Especially with a surgery, you're likely to hit pretty close to the OoP max in any of the plans. In which case the HDHP comes out about $2k ahead of either the Gold or Platinum plans.

I want to make it clear that the "Medical Expenses" in the chart x-axis is an annual number. Again, maybe it's possible for one of the traditional plans to pull ahead if you're seeing a specialist every week. Personally I've never been billed more than $200 for a doctor's appointment. Once you fill a deductible and the co-insurance kicks in that would become a $50 appointment vs the $40 co-pay on the traditional plans. And the HDHP has a huge premium and HSA advantage.
Does your plot comprehend premium costs and the $1000 HSA contributiom?
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Re: HDHP versus PPO

Post by Tdubs »

Chief_Engineer wrote: Wed Sep 23, 2020 12:34 pm
BV3273 wrote: Wed Sep 23, 2020 11:35 am I have an underlying heart condition. Not sure if I will need surgery but I’d rather be covered just in case.
I just don't see a situation where that's the case. The HDHP and Gold plans have similar OoP maximums, but the Gold plan has much higher premiums especially once you include the $1k employer contribution to an HSA. Especially with a surgery, you're likely to hit pretty close to the OoP max in any of the plans. In which case the HDHP comes out about $2k ahead of either the Gold or Platinum plans.

I want to make it clear that the "Medical Expenses" in the chart x-axis is an annual number. Again, maybe it's possible for one of the traditional plans to pull ahead if you're seeing a specialist every week. Personally I've never been billed more than $200 for a doctor's appointment. Once you fill a deductible and the co-insurance kicks in that would become a $50 appointment vs the $40 co-pay on the traditional plans. And the HDHP has a huge premium and HSA advantage.
There is a common assumption that HDHPs are good only for the healthy. That is rarely the case. Healthy or sick, HDHPs with an HSA are almost always better for the simple reason that they have tax advantages unavailable to other plans.
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Re: HDHP versus PPO

Post by KlangFool »

BV3273 wrote: Mon Sep 21, 2020 9:03 pm Im looking at health plans for a potential new employer. I have always opted for the PPO option and not the HDHP that my current and past employers offer. I have 2 kids a 3 year old and a 5 year old. So besides the minor bumps, scrapes, and colds nothing out of the ordinary. What should I be taking into account?

BV3273,


There are health plans out there that are both HDHP and PPO. They are not exclusive to each other. So, you could have


A) HDHP and PPO


B) HDHP and HMO


C) non-HDHP and PPO


D) non-HDHP and HMO.


The devil is in the details. Do you have out-of-the-network benefits? And, what is the limit of that benefits.


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csmath
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Re: HDHP versus PPO

Post by csmath »

Tdubs wrote: Wed Sep 23, 2020 1:22 pm
Chief_Engineer wrote: Wed Sep 23, 2020 12:34 pm
BV3273 wrote: Wed Sep 23, 2020 11:35 am I have an underlying heart condition. Not sure if I will need surgery but I’d rather be covered just in case.
I just don't see a situation where that's the case. The HDHP and Gold plans have similar OoP maximums, but the Gold plan has much higher premiums especially once you include the $1k employer contribution to an HSA. Especially with a surgery, you're likely to hit pretty close to the OoP max in any of the plans. In which case the HDHP comes out about $2k ahead of either the Gold or Platinum plans.

I want to make it clear that the "Medical Expenses" in the chart x-axis is an annual number. Again, maybe it's possible for one of the traditional plans to pull ahead if you're seeing a specialist every week. Personally I've never been billed more than $200 for a doctor's appointment. Once you fill a deductible and the co-insurance kicks in that would become a $50 appointment vs the $40 co-pay on the traditional plans. And the HDHP has a huge premium and HSA advantage.
There is a common assumption that HDHPs are good only for the healthy. That is rarely the case. Healthy or sick, HDHPs with an HSA are almost always better for the simple reason that they have tax advantages unavailable to other plans.
^this.

This is one of the things I discovered when making the tool to compare the plans. The key is the MAGNITUDE at which one is better than the other. In my own personal case I discovered that one single "decent" year with low medical costs would save me enough money to pay for 5 of the absolute worst case scenarios. Your mileage may vary (YMMV) but that is what I found with my own plan. I tried discussing this with several coworkers and 95% of the time they replied with something like, "But I have kids" or "why would I want a high deductible and pay more"? It was helpless trying to explain it to most and honestly I didn't try with most because they just weren't interested in exploring the unknown.
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FiveK
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Re: HDHP versus PPO

Post by FiveK »

AnEngineer wrote: Wed Sep 23, 2020 1:21 pm Does your plot comprehend premium costs and the $1000 HSA contributiom?
Don't know about Chief_Engineer's details, but that chart is similar to one generated on the 'HDHP Analysis' tab of the personal finance toolbox Excel tool.

See below for an example, more or less based on OP's numbers. For any evaluation, one must guess at how much will be in vs. out of network, number of office visits that have a flat fee vs. co-pay percentage, etc.. The example might be helpful for understanding what goes where if one wishes to use that tool.

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Re: HDHP versus PPO

Post by AnEngineer »

FiveK wrote: Wed Sep 23, 2020 3:05 pm...
Thanks. You've got an error in the HSA (total contributions of $8100, over the limit). But the main story holds: that for these plans (and likely many) the HDHP is ALWAYS better than the Gold or Platinum plans, no matter what happens during the year.

The only reason I could see for justifying an employer continuing to offer the non-HDHP options in this case is for people who may have a large expensive surgery and January, the cost of which automatically gets spread over the year. However, given the pace of medical billing and frequent willingness to set up payment plans, this seems like a stretch. If the networks are the same, and out-of-network shows the same story, I think it's a disservice to the employees to offer these strictly worse plans. It allows them to spend more money because they didn't run all the numbers.
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FiveK
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Re: HDHP versus PPO

Post by FiveK »

AnEngineer wrote: Wed Sep 23, 2020 3:24 pm
FiveK wrote: Wed Sep 23, 2020 3:05 pm...more or less based on OP's numbers...
Thanks. You've got an error in the HSA (total contributions of $8100, over the limit).
Right you are! Unless one spouse is age 55+, but that's unlikely given the children's ages. ;)

There are probably other inconsistencies among entries regarding in-network vs. out-of-network, etc. That's what "more or less" covers.... :)
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Chief_Engineer
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Re: HDHP versus PPO

Post by Chief_Engineer »

AnEngineer wrote: Wed Sep 23, 2020 1:21 pm Does your plot comprehend premium costs and the $1000 HSA contributiom?
Yes. The out of pocket cost at $0 medical expenses is the annual premium minus any employer contribution.
FiveK wrote: Wed Sep 23, 2020 3:05 pm Don't know about Chief_Engineer's details, but that chart is similar to one generated on the 'HDHP Analysis' tab of the personal finance toolbox Excel tool.

See below for an example, more or less based on OP's numbers. For any evaluation, one must guess at how much will be in vs. out of network, number of office visits that have a flat fee vs. co-pay percentage, etc.. The example might be helpful for understanding what goes where if one wishes to use that tool.
Thanks for posting this. It makes me more confident in my calculations. I was always suspicious because in every case I've evaluated the HDHP was always better, so I always assumed there must be something I was missing.

My calculation doesn't include any tax benefits.

I am curious why the tool you used calculates a flat cost for the Gold plan up until $5k of medical expenses. I might be misunderstanding something.
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FiveK
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Re: HDHP versus PPO

Post by FiveK »

Chief_Engineer wrote: Wed Sep 23, 2020 5:57 pm I am curious why the tool you used calculates a flat cost for the Gold plan up until $5k of medical expenses. I might be misunderstanding something.
I think it is the use of the FSA. IIRC (didn't save that file), use of the FSA increases the cost on the low end (because it is "use it or lose it") while decreasing cost on the high end (due to tax savings).
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