Author Topic: Baby on the way... Should I switch to HSA-compatible health insurance?  (Read 419 times)

pianokyle

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Hi all, I'm fairly new to mustachianism and am loving it so far.  But I have a lot to learn and would love some help!

I'm self-employed and have a baby with a due date only two weeks away (mid-September 2017).  I purchase my health insurance through the marketplace and am on a high-dectible health insurance plan, but it's not HSA-compatible.  When the baby comes I will have an opportunity to switch insurances... if I want.

Should I switch to a plan that is HSA-compatible now or just wait until the beginning of next year?

(I hear that my deductible will reset, is that something I should be concerned about with a new baby?  Also, is it beneficial to switch with only a few months left in the year?)  Thanks in advance!

bender

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #1 on: August 29, 2017, 02:52:18 PM »
HSA plans are all high deductible, right?  A lot of people move to a lower deductible plan when they have children.  The first couple of years of care can be expensive.

pianokyle

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #2 on: August 30, 2017, 08:50:57 AM »
HSA plans are all high deductible, right?  A lot of people move to a lower deductible plan when they have children.  The first couple of years of care can be expensive.

Thanks, Bender!  I hadn't thought about that...

slappy

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #3 on: August 30, 2017, 08:56:34 AM »
I have an HSA with a baby.  With my plan, which is through work, once I hit my out of pocket max, they cover everything else at 100% (in network). As you will soon find out, the delivery alone will be more than the out of pocket max. So everything else is covered at 100%. I actually posted about this here at some point because it seems too goo be to be true, but I've had the plan for three years and two babies and it is working. It could be because my plan is through an employer through. Marketplace plans may not cover as much. I guess it all depends on the plan, but I've been happy with the HSA.

bender

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #4 on: August 30, 2017, 11:03:18 AM »
Hi Slappy - interesting strategy.  What is your out of pocket max?  Is that less than the total premiums for a traditional (low deductible) plan?

slappy

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #5 on: August 30, 2017, 11:24:46 AM »
Hi Slappy - interesting strategy.  What is your out of pocket max?  Is that less than the total premiums for a traditional (low deductible) plan?

If I remember correctly, they were comparable when you took into account the copays and additional costs of the low deductible plan. My OOP max is $4k. At the time, my husband had a weekly therapy session at $20 co pay per visit.  So I did the math based on that. I guess it really depends on what the plan covers post-OOP max and what your other expenses are. We broke even just on the therapy visits.  Also, my employer kicks in $1000 for the HSA, so that skews it even more in my favor. I pay $152 bi weekly for the plan itself.
« Last Edit: August 30, 2017, 11:26:54 AM by slappy »

slappy

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #6 on: August 30, 2017, 11:28:06 AM »
I remember thinking that my plan in particular is great for people who either never get sick or have very high medical bills. If they never get sick, the high deductible doesn't matter. If they have high bills, then everything over $4k is covered anyway. It still seems too good to be true, actually.

bender

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #7 on: August 30, 2017, 12:45:35 PM »
OK the 4k out of pocket maximum is a really great plan.  I didn't think that would be eligible for HSA. 

Plans on the exchange in my state have $14k out of pocket maximums.  That's why I was confused! 

Is it possible you're confusing 'deductible' with 'out of pocket maximum'?
« Last Edit: August 30, 2017, 12:53:32 PM by bender »

slappy

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #8 on: August 30, 2017, 01:27:49 PM »
I believe my deductible is $3k, and the minimum deductible for a family plan to qualify as HDHP is $2600.

iowajes

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #9 on: August 30, 2017, 02:06:44 PM »
$4k out of pocket max is amazing on a high deductible plan. That's not even what I'd consider high for the deductible much less OOP.

StarBright

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #10 on: August 30, 2017, 02:19:15 PM »
$4k out of pocket max is amazing on a high deductible plan. That's not even what I'd consider high for the deductible much less OOP.

+1 to the above! Our HD plan (through employer) is a 6k deductible with a 13k out of pocket max (this gets a little higher each year).

OP - obviously I don't know what your plan options are but take a serious look at the out of pocket max number (different than your deductible) before making any decisions. We hit the out of pocket max the years we had our children and the year after the births as well. Four years total of out of pocket max. It totally depleted our savings by the third year.

Unless you are bringing in a ton of income and are specifically looking at ways to lower your tax liability, I would also think of switching to a low deductible plan. Kids are crazy expensive when they are babies- even healthy ones. If you do want to stay with a high deductible then you may as well switch to HSA (but do watch the Out of Pocket max).

and congrats on your impending little one!

A440

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Re: Baby on the way... Should I switch to HSA-compatible health insurance?
« Reply #11 on: August 31, 2017, 06:02:14 PM »
I think most of the time, you will do better with an HSA plan.  When I was trying to choose a plan in the past, I ran the numbers for having no medical expenses at all vs a moderate amount vs meeting the out of pocket.  Make sure you add in the cost of the premiums and any tax savings you will get for contributing to the HSA and the employer contributions.  The higher your income, the more you benefit from HSA contributions that you make.