I don’t know if it still works this way, but last I was aware/understood, funding an HSA by payroll deduction is “better” than contributing separately on your own because the contribution via payroll deduction doesn’t get taxed for Medicare or Social Security. (The income tax treatment is the same regardless of method of contribution). So if what I said here is still true/correct, then I think @TrisPrior should do the more convoluted thing and fund the HSA from her paycheck and “transfer” the funds from her medical savings bucket to whatever other bucket she wants to put it in. I’m extremely sleep deprived so I hope I understood the exchange that preceded my comment here.
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We had the meeting yesterday and I am no more clear on what to do. Did find out the HSA is a PPO so that’s good, that means my therapist will take it.
But, like… under the PPO, doctor’s visits are $25 for primary, $40 for specialist (including gyno). Under HSA, it’s full price until deductible and then 10% of whatever the bill is. And, like… I can’t know in advance what the bill will be, and thus what 10% of it is.
I feel more secure knowing: go to the doctor, pay $25 or $40. (plus whatever tests, etc. are run, obvs.) The HSA feels like a big unknown to me.
But I guess all health insurance is a big unknown because we have no transparency in pricing and no one ever tells you in advance what the bill’s going to be, there’s always something extra in there.
Thoughts?
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I tend to put a lot of weight on out of pocket max, basically “what is the absolute worst this could be”.
Then I figure it’s gambling, and gambling never turns out well. No matter what I choose, there is a good chance I’ll think “damn, should have gone the other way”.
Like you, I feel more secure with the PPO pricing, even if it doesn’t actually turn out better. PPO also means I’m slightly less likely to get a giant bill all at once. (Like the $2k+ bill I just got for a cystoscopy under my new high deductible insurance.)
My company doesn’t give us any money for an HSA though, so there is no benefit there.
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Add up the total premiums for the year for both and then see how much less the HDHP (the one with the HSA) is. For us, there was literally no way we could spend as much on the HDHP as on the other because the difference in premiums was so extreme.
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I went back and looked up past visits and used those, since on the explanation of benefits, you can see what was billed. So you mentioned your therapist charges $150/session - you’ll pay $150 and then you’ll pay $15/session once you hit your deductible, although it may be less than that if the insurance has a contracted rate that’s cheaper.
Like others have mentioned, I ran the numbers on 3 scenarios - using no health care, using enough to hit/go past the deductible but not hit the OOP max, and hitting the OOP max. In my case, they all work out cheaper with the HSA plan, with the same network as the non-PPO plan. The employer contribution and the cheaper premiums go a long way. There’s certainly more uncertainty and it’s sometimes a shock (to me and to the pharmacist) when I’m paying $200 for a prescription, but I just have to remind myself that the numbers work out.
In my case, if I use enough healthcare to hit the deductible, then I’ve finally paid what I would have just in premiums with the lower deductible plan, before using any healthcare. It feels much more uncertain on a month to month basis, but for my plan it is the best deal and I can make up the difference. And now, I switched to the HSA plan maybe 6 years ago and we have a TON stashed in our HSA, so we have that cushion there now. Most years I come out WAY ahead, and some years just a little ahead, of where I would have been with the low deductible plan. It works that way for both my husband who uses very little care and for me and my son who use a lot of care. I think we’ll likely hit our OOP right at the end of this year.
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this weekend or possibly today I need to sit down and do a lot of math re various scenarios.
I feel like I am totally taking over this thread but is anyone willing to double check whatever conclusions I end up drawing from the math?
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Do you really, though?
I mean, it is good to be aware of what the likely best and worst case scenarios would be under both plans. But to spend lots of time running “but what if XYZ AABBCC…” scenarios is not really going to give you more useful information than that.
Given your situation and the fact that you likely will be moving states mid-year I think this is as good a time as any to switch to the HSA option and see how it goes. If it ends up looking not cost effective maybe you can switch back to the PPO option once you establish your new residence.
Oh, I wasn’t talking about running scenarios ABCXYZQ or anything. I was thinking:
scenario A, I have only preventive care and existing prescriptions
Scenario B, I hit the out of pocket limit.
Maybe scenario 3, somewhere in between? Like, maybe I meet the HSA deductible but need no further care so nothing is actually covered? I don’t know if that is needed.
ANY math is a lot of math, to me. 
Also, I realize this is ridiculous but I am super suspicious of out of pocket limits. Like, seriously, that is ALL I will pay? Where is the gotcha or fine print? Surely the insurance will still find a way to screw me? Even though I know people who hit the OOP limit and then essentially got free surgeries.
Hey, I already ran these scenarios for you. The HDHP makes much more sense for you in all cases. You actually come out ahead.
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Oh, and, i should probably check with HR are whether moving states is a qualifying event to change plans? I am assuming not though since all plans use the same network? Worth checking though.
Hello, I have had an HDHP with a >$7,000 or greater deductible every year and a $8,000+ OOP maximum each year for the past 7 years.
I can attest to the fact that since I hit my OOP max every year in February or March thanks to the wonders of my drug price being ridiculous, I get everything else covered the rest of the year: no drug co-pays, no office visit co-pays, no therapy co-pays, no lab co-pays, and no cost for my surgeries or medical procedures.
(This is actually why I go for a high deductible plan, because the sooner I hit that OOP max with co-pay assistance, the cheaper things are for me).
The big issue when it comes to surgeries or big networks is in-network/out-of network after OOP max. That is something you deal with when the bills start coming, and you argue if you have to.
I got $26,000 of wrist surgery in July 2019 and I spent $0 out of pocket because I already hit my OOP max. Despite having no out-of-network coverage.
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It is by law.
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It really does work this way…I’ve hit my OOP max the past…5 years and have had countless free MRIs, free blood tests, injections, visits etc. I’ve also had a free $150K surgery. Unless you are getting out of network care, there really isn’t a “gotcha” that I’ve ever experienced.
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Good to know!
Though, since all plans use the exact same network and no plans have any out of network coverage, it seems like the main issue would be, does our destination have enough in network doctors? It seems so, but I know from experience that “accepting new patients” is inaccurate probably 75 percent of the time on cigna’s website. At least here. Maybe there it is better.
Anecdotes like this really help!
I know this is a total mental block on my part. I see “high deductible” and just freeze.
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Yea, sounds like you can’t really plan ahead for that, so you just deal with it when it comes. Which as a fellow planner-ahead, I get.
I will say, I tend to be a worrier and I have anxiety about healthcare/costs, etc. Health insurance is something I decided wasn’t worth “optimizing” for me. I pay for the PPO even though the premium is more because it is worth it to me for the peace of mind. I really like the predictability of “oh this PT visit is going to cost $45, and this Dr visit is $25”. It’s easier for me to plan my finances, even if the HDHP works out as a slightly better option in the end…although with my particular company the cost is almost equal for maxing out either HDHP or PPO, so I just stick with what I like which is low/predictable copays.
Do you have access to an FSA with the PPO? I contribute my predicted medical expenses to an FSA every year so at least I’m not missing out on the tax break, although you have to spend most of the money each year ( I believe you can roll over $500)…I never have any problem spending all of it haha, but I use a lot of healthcare in general.
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Moving zip codes is a qualifying life event by law.
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I’m planning to switch back to the HDHP/HSA plan this year even though it is noticeably more costly with a “normal” year for my needs. I have discovered in 2020 and 2021 that I suuuuuck at using an FSA properly.
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We do have an FSA - I need to read more about it because I THINK they said it was only for dental and vision expenses, nothing else? Though that might’ve been if you have the HSA. I sort of glazed over that one; any time I’ve put money in an FSA I’ve had to scramble to use up the money, and I think now it’s harder to spend it than it was? So that’s not a thing I’ve pursued in years.
I feel the same way about you re fixed expense of doctor visits rather than a percent of whatever the hell they see fit to charge me. I wouldn’t be considering this if it wasn’t such a huge difference in premiums - the PPO being $226/month more expensive than the HSA is a lot of money to me.