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..
Update: I’ve been on the HDHP+HSA for a few years – see the comment thread for additional notes. The short of it is that it’s worked out great for me, but consider your options carefully!