Open enrollment for health plans starts at my day job soon. Now that I have a child, I’m looking at the HSA (Health Savings Account) combined with a HDHP (high-deductible health plan) with a high deductible versus the PPO (traditional) health plan option again, and with a few changes that have been made in the HSA plan over the last few years, it looks quite appealing. I’m not seeing any real downsides, but though I’d ask for opinion from my friends on the good ‘ol interweb. ;)
Basics of HSA:
- HSA paycheck deductions will be ~$2000/yr less than PPO
- HSA has a single deductible for the family of $3000
- Preventative care is paid at 100% at all times.
- All other care is not paid until deductible is met; then is paid at 100% (including prescriptions.)
- Reading through the plan summary, post-deductible coverage appears identical to PPO
Basics of PPO:
- $300 individual / $600 deductible
- $1500 individual / $3000 family out-of-pocket maximum (not including prescription copays)
- $30 office copays
- 80% coinsurance after deductible for most other services, including lab
As far as expenses go on the HSA, I’ve added things up, and we will be paying around $225/mo for medication copays for the three of us. This means that our monthly expenses will be a little bit more than the premium savings just for medication. If we add any office visits (which we will — chiropractor, etc.), the monthly expenses go up much quicker. However, once we hit $3000 total, we’re done paying out of pocket. In the year in full, HSA can only possibly cost us $1000 more than PPO (if we never buy medications or see the doctor under the PPO, which isn’t the case).. and it will likely cost us much less, because of the $600 family deductible under the PPO and the copay cost for medications (one medication alone ends up being $400/yr, as there is no generic available.)
The only real downside I see to the HSA is that it may end up “frontloading” medical expenses — if an emergency room visit was required in January or February, for example, it’d be a $3000 expense out of pocket. However, we wouldn’t have to pay another penny for the rest of the year, as I understand it at least.
Have any of you made the switch to HSA, and if so, has it been a positive move for you? Are there any downsides that I am not seeing?
Appreciate your comments! HSA vs PPO isn’t an easy choice..
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IMHO the HSA will be a better bet in the long run, I would suggest a health savings account if your work offers one,that will then take the 3000 out of pocket, and take it out over all your paychecks for the year, but allowing you the full 3000 upfront. I spent a TON on money on medical each year, and hitting that out of pocket is a huge stress reduction for me at least. I hit my out of pocket by about May normally.
@amanda Thanks! That’s pretty much what I’ve been thinking… so I can actually have them drop 3k in the account right away and do payroll deductions for it throughout the year – that would be friggin COOL.
Thanks!
we switched to an HSA last year and have not had any problems. I am not sure what your plan says but typically most preventitive care is covered. Even if something bad happens right away most places will let you make payments of you can’t cover the cost up front. if you have other questions youknow how to find us.
@Jason ah, yeah, good point.. I always forget about the payment option.. thanks!
We decided to go with the HSA.. here’s hoping it was a good decision! ;)
Hey just to add my $.02 – I have a wife and son (now 19) on our HSA that we’ve been on since 2006 and it was working great as all 3 of us are in decent health – my employee put in $1800 per yr and we were spending mostly less than $1000/yr on medical – so we were saving around $800 or more per yr – that was until our son was snow boarding and came down wrong – just broke a bone in his left hand – 2 ERs, then surgery – followed by another since the first didn’t take and now therapy. Needless to say our $5200 max was drained nearly instantly. I switched back to PPO since the deductible is going from $5200/yr for family to $7000 and the Premium that comes out of my check is really no different from the PPO – so esp since I have an active 19 yr old – I’m going the safe route – PPO – until it us just wife and I , I think PPO is the best choice – it only takes 1 significant exp for PPO to be worth it – hope this is helpful
Indeed it is helpful, thanks!
I am saving nearly $2000/yr in premiums, and our deductible is only $3000, so hoping it will work in our favor. ;)
nc you come off as pompous. Your posts appear to be boastful of your current medical situation and ability to easily cover your deductible. I’m sure that your arrogance rubs those around you the wrong way, perhaps you should ask them about it if you don’t believe me.
Thanks for the opinion Roland.. I think. ;)