Help me decide - PPO and Flexible Spending Arrangement vs. HDHP and Health Savings Account

[glacierbob]

[Moved into a new thread from: PPO vs HSA --admin LadyGeek]

Hi, I am trying to decide between the traditional PPO and FSA vs the HDHP PPO w HSA

I am in the 32 % tax bracket. I have a wife and 3 young kids. One has asthma and ADHD. No other health issues at the moment.

PPO
Premium is $252 biweekly
$2,000 family deductible
$14,000 out of pocket maximum
Preventative care is free and
otherwise$20 and $40 copay for PCP and specialty physician visits.
Hospitalization is $600 copay, outpatient surgery is $225 copay.
ER is $250 copay
scripts are similar to HSA plan

HDHP HSA plan
Premium is $138 biweekly
$4,000 family deductible
$14,000 out of pocket maximum
Preventative care is free and
otherwise 20 % and 35% copay for PCP and specialty physician visits.
Hospitalization is 20 % copay, ER is 20 % copay.
ER is 20 % copay
scripts are similar to HSA plan
Employer adds $1200 to your family HSA plan

I foresee 8 PCP visits beyond preventative care and maybe one outpatient surgery and one ER visit and 3 specialty physician visits.

I am a bit perplexed. Would contribute the max to the HSA for savings.tax purposes.

[grabiner]

Hi, I am trying to decide between the traditional PPO and FSA vs the HDHP PPO w HSA

I am in the 32 % tax bracket. I have a wife and 3 young kids. One has asthma and ADHD. No other health issues at the moment.

PPO
Premium is $252 biweekly
$2,000 family deductible
$14,000 out of pocket maximum
Preventative care is free and
otherwise$20 and $40 copay for PCP and specialty physician visits.
Hospitalization is $600 copay, outpatient surgery is $225 copay.
ER is $250 copay
scripts are similar to HSA plan

HDHP HSA plan
Premium is $138 biweekly
$4,000 family deductible
$14,000 out of pocket maximum
Preventative care is free and
otherwise 20 % and 35% copay for PCP and specialty physician visits.
Hospitalization is 20 % copay, ER is 20 % copay.
ER is 20 % copay
scripts are similar to HSA plan
Employer adds $1200 to your family HSA plan

I foresee 8 PCP visits beyond preventative care and maybe one outpatient surgery and one ER visit and 3 specialty physician visits.

I am a bit perplexed. Would contribute the max to the HSA for savings.tax purposes.

I am assuming you pay the premium by payroll deduction, so that the cost to you is reduced by 33.45% (32% federal tax and 1.45% Medicare tax). So the conventional plan costs $6552 for premiums, which is $4361 out of pocket. The HDHP costs $3588 for premiums, which is $2388 out of pocket. You also get $1200 of free money in the HSA, and you can contribute another $7100 on your own, for a $2272 tax saving (compared to, say, contributing the same amount to a Roth IRA). Thus the day-one cost of the HDHP is -$1316, so it starts out $5677 ahead of the conventional plan. Since that is more than the deductible, you will come out ahead even if you use the whole deductible under the HDHP and would have paid nothing under the conventional plan. Beyond the deductible, the coverage is fairly close; the conventional plan might come out ahead if you had a long hospital stay (which could be $20K before insurance and would cost $600 under the conventional plan and $4000 under the HDHP).

[glacierbob]

Yes because the copays for PPOs dont count toward the deductible correct?