Author Topic: health saving plans vs PPO plan???  (Read 13146 times)

junebug1965

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health saving plans vs PPO plan???
« on: September 03, 2013, 07:11:58 PM »

 hi all,
For the past 20 + years my husband and I have opted for traditional health plans thr my husbands company, currently we pay $300 a month for insurance (including drugs), I think its about $2500 deductible, with $20 copay.
no kids just me and husband.

Shotrly we will be renewing  our medical insurance I was thinking about HSA??????????..... problem is I do not really know what HSA is all about, I have done some research but was hoping to have some in put form you folks.
how does it work,
how much does it cost,
what are the advantages.
my husband said they would probably have  a  meeting in work about health care options, I have asked him to take lots of notes.
I will add that we are both in our late 40's with no health issues, the only time we do to the dr is for our yearly check up, so basically once a year for  screenings etc.

The only thing that worries me would be prescription drugs...husband takes 1 maintenance drug .
I have zero prescriptions.
would we have to pay 100% for them...with current plan we pay $55.00 for a 3 month supply
We are  just not too sure what to do, just keep the traditional plan, or switch to HSA???
a friend of mine did say HSA was taking a chance with your health care ???????? that made me worried.
thanks for any insight / information.


Fatman11

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Re: health saving plans vs PPO plan???
« Reply #1 on: September 03, 2013, 08:52:03 PM »
I have an Aetna PPO with an HSA as a single 32yo - the high deductible plan covers preventive care visits as part of the premium with a $1500 in network deductible.  My portion of the plan premium is around $45/2 weeks and a portion of this premium goes directly to the HSA (called an insurance premium pass-through) at a rate of $62.50/month, and the HSA has investment account options (although that money is not available to immediately spend on health-care). Overall, I like the plan with the HSA, just realize that the HSA is more of a side benefit of specific PPO plans. I would expect that the cost of care for a PPO vs PPO w HSA would be roughly the same (all things being equal, the deductible and any co-pay might be different).  Before deciding, make sure you are eligible for an HSA - there are some important disqualifiers you can find on the IRS website. Also, review and compare plan brochures carefully! I might be able to provide additional details if you have specific questions.

junebug1965

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Re: health saving plans vs PPO plan???
« Reply #2 on: September 03, 2013, 09:14:31 PM »
  hi fatman11,
thanks for your reply, I guess I have some reading and research to do, when my husband brings home the paper work.
if I undersatnd correctly is  all preventive  covered 100% as it is with a traditional PPO plan, and then we pay for any other medical cost as needed, this money comes from the HSA plan or from out of pocket???
also, what if (hopefully never) a surgery is required, does the HSA plan have a cap......2 years ago I had a female type surgery (wont go into detail)..anyways that would have cost about $15,000, we paid nothing since it was 100% covered (not the same insurance has we have now), what would happen in a situation like that???
thanks so much for your help on this ,

MeForNow

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Re: health saving plans vs PPO plan???
« Reply #3 on: September 03, 2013, 10:29:07 PM »
Hello Junebug,

This is my understanding of how HSA works, no guarentee I'm right!

An HSA is in addition to insurance,  It is not a replacement for insurance.

You decide how much money you want to put into the HSA plan. This money is taken out of your pay and is not taxed.  You can spend it for Health related costs, such as deductibles, copayments, and out-of-pocket expenses.  The advantage of the HSA is that you are not paying tax on the money.  That is the main advantage!

I hope this is some help.

POINTS of ER

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Re: health saving plans vs PPO plan???
« Reply #4 on: September 04, 2013, 04:01:50 AM »
An HSA is in addition to insurance,  It is not a replacement for insurance.

Like what MeForNow mentioned it's an addition to insurance, not a replacement. In order to qualify for a HSA you would need to have a High Deductible Health Plan usually a deductible more than $1500. The main benefits of HSA is the triple tax advantage that you'll get. The triple tax benefits are pre-tax contributions, tax-free growth on your contributions (your investments), and tax-free distributions only when used towards medical expenses. If you don't use up your funds towards medical and you keep it until retirement then it acts like a traditional 401k. Where you will have to pay taxes when you withdraw it.

  hi fatman11,
thanks for your reply, I guess I have some reading and research to do, when my husband brings home the paper work.
if I undersatnd correctly is  all preventive  covered 100% as it is with a traditional PPO plan, and then we pay for any other medical cost as needed, this money comes from the HSA plan or from out of pocket???
also, what if (hopefully never) a surgery is required, does the HSA plan have a cap......2 years ago I had a female type surgery (wont go into detail)..anyways that would have cost about $15,000, we paid nothing since it was 100% covered (not the same insurance has we have now), what would happen in a situation like that???
thanks so much for your help on this ,

Now for your example let's say you have High Deductible Health Plan of $2,500 deductible and 10% co-insurance. If you have a $15,000 medical bill, then you would simply be paying $$3750 ($2500 + 1250). Now this expense can be covered by your contributions in your HSA (tax-free) or you can pay out of your pocket and keep the receipt then withdraw these funds later (again tax free). This is a great benefit of HSA is that you can decide whenever you want to pay yourself back, tax-free. Just remember it has to be a qualified medical expense in order to qualify for a tax-free withdraw. Additionally, your husband's prescribed medication would be considered a qualified expense.

My opinion is go for the health plan eligible with a HSA. Since you're currently paying a high deductible of $2,500 + $20 copay you might as well take advantage of the HSA.

I hope this helps!
« Last Edit: September 04, 2013, 04:13:30 AM by JJtheTravelingFlea »

ace1224

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Re: health saving plans vs PPO plan???
« Reply #5 on: September 04, 2013, 06:10:42 AM »
i have a hdhp with an HSA.  it has a 1500 per person deductible with 100% coverage after that, it also covers preventative stuff 100% (vaccines, physicals, etc....)
i love it because my son blows the 1500 deductible in the first 3 months of the year, and the rest of the year all his speech therapy and occupational therapy is coverd 100%. 
i think HDHP are great if you rarely use it, or if you use it all the time. 

katheh

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Re: health saving plans vs PPO plan???
« Reply #6 on: September 04, 2013, 06:30:09 AM »
It really really depends on the plan & what the employer offers.

For example, my husband takes 2 high blood pressure maintenance meds, and our insurance covers them 100%, no deductible, no copay. It also covers BC pills and other meds considered "preventative" like Lipitor, etc. I happen to work for a hospital.

So really comb through the plan documents and read them. Also because I am a low annual earner (under $50k), my hospital puts $1600 per year into my HSA account for me. Our per-person deductible is $1500 and the family deductible cap is $3000 (of which my employer contributes more than 50% per year).

When I was contemplating working there or at other places, the place I'm at won on benefits.

jpo

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Re: health saving plans vs PPO plan???
« Reply #7 on: September 04, 2013, 07:01:14 AM »
The HDHP + HSA is a no-brainer for me. I pay no premiums and my company puts in $1500/year for me. My deductible is $2500, which after less than a year of saving will be in your HSA account if you max it out.

junebug1965

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Re: health saving plans vs PPO plan???
« Reply #8 on: September 04, 2013, 09:09:14 AM »
   thank you for all the information, this helps alot....looks like the HSA is the way to go, it is offered thr BCBS at my husbands company.
When all the information is avavaible we will read over everything together, but it certainlty does seem like a good thing,especially when we only go to the dr once a year (which I am very thankful for)
again,thanks for taking the time to answere my questions and concerns.

katheh

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Re: health saving plans vs PPO plan???
« Reply #9 on: September 04, 2013, 09:27:11 AM »
We also have BCBS. Make sure to check out their website for extra savings they offer. The biggest one we use is Davis Vision. It is a "discount" card through BCBS but is far and away better than our employer-sponsored vision program ($$) and is included with your health premiums. It saves us over $1000 a year in specs for my husband, me, and the 2 of our kids who need glasses. It is accepted at all the major Visionworks, Pearle, Lenscrafters, and also a variety of local privately-owned eye doctors.

yolfer

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Re: health saving plans vs PPO plan???
« Reply #10 on: September 04, 2013, 01:57:27 PM »
If I were figuring this out, I'd plug in numbers to a formula similar to this:

Current PPO plan: deductible + premium for a year = health spending (plus co-pays)

vs

HDHP/HSA plan: higher deductible + lower premium for a year - tax savings  = health spending (plus co-pays)


For example:

Current PPO plan: $1000 deductible + $3500 premium for a year = $4500 spent (plus co-pays)
HDHP/HSA plan: $2000 deductible + $3000 premium for a year - $1612 tax savings (25% of $6450 HSA contribution*)  = $3388 spent (plus co-pays)

* This assumes you contribute the max amount into your HSA and you're in the 25% tax bracket.

Plug in your own numbers and see what you get. Hope this helps!

Insanity

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Re: health saving plans vs PPO plan???
« Reply #11 on: September 04, 2013, 02:02:56 PM »
If I were figuring this out, I'd plug in numbers to a formula similar to this:

Current PPO plan: deductible + premium for a year = health spending (plus co-pays)

vs

HDHP/HSA plan: higher deductible + lower premium for a year - tax savings  = health spending (plus co-pays)


For example:

Current PPO plan: $1000 deductible + $3500 premium for a year = $4500 spent (plus co-pays)
HDHP/HSA plan: $2000 deductible + $3000 premium for a year - $1612 tax savings (25% of $6450 HSA contribution*)  = $3388 spent (plus co-pays)

* This assumes you contribute the max amount into your HSA and you're in the 25% tax bracket.

Plug in your own numbers and see what you get. Hope this helps!

Don't forget to factor any employer contributions to the HSA.

The way mine worked out,  both PPO and PPO+HSA were taken out pre-tax.  The PPO was less money, but the amount the employer contributed to the HSA more than made up the difference.